“The Internal Revenue Service revealed that it would adjust federal income tax brackets and deductions in light of rising price levels in the United States,” reports the Daily Wire. “On Wednesday, the Department of Labor announced that year-over-year inflation for consumer prices reached 6.2% in October — the highest increase in thirty years. Prices for fuel, used vehicles, and food saw significant increases.”
The same day, “the IRS raised income tax rate thresholds for tax year 2022 to prevent ‘bracket creep.'” That is, “inflation pushing taxpayers into higher income tax brackets or reducing the value of credits, deductions, and exemptions, resulting in higher taxes without higher income.”
Fox Business reports that most of the tax brackets rose by 3% — the largest increase in four years. This increase is smaller than the inflation rate in recent months. As Market Watch notes, “The pace of inflation over the past year marched to 6.2% in October from 5.4% in the prior month. That’s more than triple the Federal Reserve’s 2% target and is the highest rate since November 1990.”
For individual filers, the brackets are as follows:
- 10% — Taxable Income up to $10,275
- 12% — Income between $10,275 and $41,775
- 22% — Income between $41,775 to $89,075
- 24% — Income between $89,075 to $170,050
- 32% — Income between $170,050 to $215,950
- 35% — Income between $215,950 to $539,900
- 37% — Income over $539,900
For joint filers, the brackets are as follows:
- 10% — Taxable Income up to $20,550
- 12% — Income between $20,550 to $83,550
- 22% — Income between $83,550 to $178,150
- 24% — Income between $178,150 to $340,100
- 32% — Income between $340,100 to $431,900
- 35% — Income between $431,900 to $647,850
- 37% — Income over $647,850
For individuals, the standard deduction rose by $400 — from $12,550 to $12,950. For married couples, the standard deduction rose by $800 — from $25,100 to $25,900.
