Last week’s release ofinflation data for Septembertriggered several cost-of-living adjustments, or COLA, for 2023.
These included thebiggest increase in Social Security benefits in 42 years.
So what does that mean for you?
The changes to the tax code would then give you a bigger payday starting January 2023.
Read on to learn all of the inflation-related tax changes for 2023.
What are the new tax brackets for 2023?
Tax bracket thresholds are going up about 7% for 2023.
(The IRS also maintains separate tax brackets forestates and trusts.)
See the new 2023 tax brackets and income thresholds for tax filers below.
Standard deductionsfor most taxpayers will increase 6.9% in 2023.
At a further income threshold, the EITC phases out completely.
The maximum incomes for EITC qualification in 2023 all increased by rates between 7% and 7.1%.
What other inflation adjusted tax changes are happening in 2023?
Some of the most notable changes are:
Will the child tax credit be higher in 2023?
Thechild tax creditis one of the credits in the income tax code that isn’t connected to inflation.
However, an amendment to include an expanded child tax credit in theInflation Reduction Actfailed in a1-97 Senate vote.
