Braking Down The Noise

Inflation Causes IRS to Raise Tax Brackets, Standard Deduction by 7%

Agency implements adjustments to key tax code parameters for 2023, following formulas set by Congress

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WASHINGTON—The Internal Revenue Service adjusted key tax code parameters for 2023 to reflect higher inflation, raising the standard deduction and the income thresholds where tax rates take effect.

The 37% top marginal tax rate will apply to individual income above $578,125 and married couples’ income above $693,750 next year, as those thresholds go up 7% from 2022 under inflation adjustments announced by the agency on Tuesday.

 

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