IRS: Inflation could mean lower tax rates for some Americans next year

Irs: Inflation Could Mean Lower Tax Rates For Some Americans Next Year

A man shops at a supermarket on Wednesday, July 27, 2022, in New York. On Thursday, Oct. 13, 2022, the U.S. government is set to announce what’s virtually certain to be the largest increase in Social Security benefits in 40 years. The boost is meant to allow beneficiaries to keep up with inflation, and plenty of controversy surrounds the move. (Andres Kudacki, AP)

WASHINGTON (WLNE) — The Internal Revenue Service announced Tuesday that some Americans could see their tax bills reduced next year.

This comes after surging prices for gas, food and rent catapulted U.S. inflation to a new four-decade peak in June.

According to a release Wednesday, the IRS extended “certain energy related tax breaks and indexed for inflation the energy efficient commercial buildings deduction beginning with tax year 2023.”

Last month, chained Consumer Price Index was up about a quarter of a percentage point less, compared with the previous year, than standard C.P.I.

For tax year 2023, the top income tax rate remains 37% for individual earning $578,125 or $693,750 for married couples filing jointly.

Middle-class workers and lower-income earners will also see benefits:

  • 35% for individual incomes over $231,250 and $462,500 for couples
  • 32% for individual incomes over $182,100 and $364,200 for couples
  • 24% for individual incomes over $95,375 and $190,750 for couples
  • 22% for individual incomes over $44,725 and $89,450 for couples
  • 12% for individual incomes over $11,000 and $22,000 for couples

The lowest rate is 10% for incomes of individuals with incomes of $11,000 or less and $22,000 for married couples.

The shifts will not affect the tax rates of Americans whose salaries have kept up with inflation.

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