Find Out Where You Fall In The Newly Unveiled Federal Tax Brackets

As inflation takes its toll on your wallet, the IRS is offering some breathing room. Tenor

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There might not be too many bright spots when it comes to the ravaging economic impact of inflation, but here’s one: higher federal tax brackets.

A recently announced adjustment increases all thresholds, meaning taxpayers can earn about 7% more without moving into the next bracket. That’s not quite on par with the current inflation rate, but many Americans will see it as a step in the right direction.

Check out where your household falls

As in previous brackets, there are different income caps for individual taxpayers and married couples filing jointly. Use the following guide to determine how much of your paycheck will go to Uncle Sam next year:

  • 10% marginal rate — $10,275 or less for individuals; $20,550 or less for married couples
  • 12% — $10,276 to $41,775 for individuals; $20,551 to $83,550 for married couples
  • 22% — $41,776 to $89,075 for individuals; $83,551 to $178,150 for married couples
  • 24% — $89,076 to $170,050 for individuals; $178,151 to $340,100 for married couples
  • 32% — $170,051 to $215,950 for individuals; $340,101 to $431,900 for married couples
  • 35% — $215,951 to $539,900 for individuals; $431,901 to $647,850 for married couples
  • 37% — $539,901 or more for individuals; $647,851 for married couples

How the new brackets help taxpayers

We’re all spending more on purchases from gas to groceries, so allowing taxpayers to keep more of the money we earn is one way that the federal government can help combat rising consumer prices.

As tax planning professional Tim Steffen explained: “Inflation adjustments to tax brackets mean that it will be harder for taxpayers to hit those higher brackets, and therefore will have more income taxed at lower rates next year.”

Chris Agee
Chris Agee October 20th, 2022
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