The IRS has announced changes in income tax brackets due to inflation. 

The IRS has announced changes in income tax brackets due to inflation. The new cutoffs may benefit some Americans who might find themselves now placed in lower tax brackets than in previous years.

Today Explained: IRS Announces Tax Bracket Changes

Welcome back to news wrap, It's time for today, explained where we break down some of the biggest stories in the news, how we got here, where we go next inflation might finally have a positive impact on your wallet. The Internal Revenue Service or I. R. S. Just announced higher federal income tax brackets for 2023 to account for decades. High inflation. That means Americans whose wages have not kept pace with these rising prices will land in lower brackets and ultimately owe less money when they file taxes. Each threshold will jump about 7% in an attempt to stop bracket creeps, which happens when inflation pushes taxpayers into higher tax brackets without an increase in real income. Here's a breakdown of the updated ranges. For example, the top income tax rate of 37% will apply next year to individuals earning roughly $578,000 a year. That's up from about $539,000 this year, creating a difference of nearly $40,000 worth of individual income that's eligible to be taxed at a lower rate of 35%. The standard tax deduction, which most filers claim will also increase by $900 to a little under $14,000 for single people and by $1800 to just under $28,000 for married couples. That's the amount taxpayers can subtract from their income before they owe taxes on the rest. This is the latest effort by the government to give Americans a financial boost as they grapple with the rising cost of living. The Social Security Administration recently announced an 8.7% increase in benefits for 2023. That's the biggest hike since 1981. While many recipients are looking forward to the higher payments, they say it's still not enough to account for inflation and more help could be on the way. The I. R. S. Has yet to release a 2023 limits for 401k. And individual retirement accounts, many experts predict those will also increase. Let's