As part of its tax overhaul, the Trump administration changed the tax rates for some Americans. It tied tax brackets to the chained consumer price index, which rises at a slower rate. In September, the chained index was up a quarter of a percentage point less than the standard index. Some people may benefit from this change.
If you’re concerned about the future of tax rates, you’re not alone. The IRS is facing an unprecedented backlog and reduced budget. This is affecting millions of people. Even worse, many refund checks have been delayed for months. And the IRS’s problems aren’t limited to tax rates. It’s also dealing with a huge backlog and a backlog of tax returns.
Luckily, the IRS is making inflation adjustments that will benefit some taxpayers in 2023. The new inflation adjustments affect more than 60 tax provisions and tax rate schedules. These adjustments are meant to prevent “bracket creep” caused by inflation, which forces workers into higher tax brackets.
This means lower tax rates for some people in 2023. While it is not enough to get everyone into a lower tax bracket, it is good news for those who can take advantage of them. The new standards increase the standard deduction for married couples and single taxpayers, and the tax credit for higher-income earners is also increased. Additionally, there will be changes to the estate tax and earned-income tax credits.