Good news for those thinking about tax season already. The IRS says its moving up tax brackets because of inflation.
Over the last 12 months ‘real wages’ or the value of the money workers take home decreased by more than 3.4%.
Why? Because of inflation.
Earlier this week the IRS said the standard deduction will increase to $27,700 for married couples. For single earners the standard deduction will rise to $13,850.
As for tax brackets – here’s a look at how those will change:
- 12% — married couples with incomes more than $22,000 and individuals who earned more than $11,000.
- 24% — married couples with incomes more than $89,450 and individuals with incomes more than $44,725.
- 32% — married couples with incomes more than $364,200 and individuals with incomes more than $182,100.
- 35% — married couples with incomes more than $462,500 and individuals making more than $231,250.
- 37% — married couples with incomes more than $693,750 and individuals making more than $578,125.
The earned income tax credit will increase 7%, too.
The goal of the changes is to help those who have not seen their wages increase enough over the last year to accommodate for inflation.
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