IRS says it's boosting tax brackets due to faster inflation
CBSN
The IRS said the income thresholds for federal tax brackets will be higher in 2022, reflecting the faster pace of inflation. That means a married couple will need to earn almost $20,000 more next year to enter the top tax bracket, with the tax rate set to remain at 37%.
The tax agency typically adjusts tax brackets each year to account for rising consumer prices, but this year's increases are greater than usual. What's not changing are the basic income tax rates that were set by Congress under the 2017 Tax Cuts and Jobs Act, which set the lowest threshold at 10% and the highest at 37%.
The IRS said it is adjusting other thresholds to reflect inflation, such as the standard deduction for married couples, which will rise 3.2% to $25,900 next year. Even so, that increase won't match the pace of inflation, which has accelerated this year due to supply-chain snarls, labor shortages and other issues.
