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Our Guide To Understanding The IRS Inflation-Adjusted Tax Brackets

It’s hard to ignore the undesirable effects of inflation. Your favorite fast food burger doesn’t taste nearly as good when it’s two dollars more than you’re used to, and it’s hard to justify paying more for a bag of chips that contains fewer munchies than before. Inflation can also affect your financing on a new car! But with rising inflation also comes adjusted tax brackets, and your trusted financial advisors at Maggi Tax are here to help you navigate these changes.

In this useful guide, we’ll help you better understand the IRS inflation-adjusted tax brackets and what it means for you:

An Overview of The 2023 Tax Brackets

For personal income tax, the inflation-adjusted changes are as follows:

Tax Percentage Individual Income Married Income Dollar Increase
10% Below $11,000 Below $22,000
12% $11,000 $22,000 $725 / $1,450
22% $44,725 $89,450 $2,950 / $5,900
24% $95,375 $190,750 $6,300 / $12,600
32% $182,100 $364,200 $12,050 / $24,100
35% $231,250 $462,500 $15,300 / $30,600
37% Above $578,125 Above $693,750 $38,225 / $45,900

By raising the income for each bracket, individuals will have a better chance of being taxed at a lower percentage which means less that they will need to pay and more that they could receive. While the difference may not feel so astronomical, every little bit helps during a time of rising inflation.

Navigating Tax Bracket Trends – Why 2023 Is Different

Inflation-adjusted tax brackets aren’t all that new. The topic of income and prices rides on trends: up-and-down patterns that move according to our fluid economy. However, the 2023 tax year happens to stand out as one of the highest adjustments since the ‘80s when tax brackets saw a rise of 2-4%. This time, the difference between 2022 and 2023 is roughly 6.5%.

Tax brackets aren’t the only thing that the IRS tends to change every now and then. Learn more > What Are The IRS Limits For 2023?

What This Means For You As A Taxpayer

As a model citizen and responsible taxpayer, you can benefit from inflation-adjusted tax brackets. Rather than seeing a complete loss in savings from the rising cost of various expenses, these changes can help level the playing field so that the losses don’t hit as hard. Taxes will account for less of your overall income, meaning that you would be paying less. You won’t necessarily make a profit, but it’s better than paying more than you would before the adjustments.

How To Prepare For Next Tax Season

To set yourself up for success come next tax season, it’s a good idea to get a head start by visiting your financial advisor to see what you can do in the meantime. There may be a way to adjust your income or investments to work in your favor for a greater tax return or to prepare certain information or documentation to make the tax filing process easier. For tax strategies and preparation services near you, you can count on Maggi Tax!

Looking For A Reliable Financial Advisor Near You? Call Maggi Tax!

It’s never too late to educate yourself on effective tax strategies! Contact Maggi Tax today at (727) 799-1701 for a complimentary consultation to get started on managing your taxes like a pro. We’ll go in-depth to help you find the best plan of action for you to help you maximize your taxes.

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