HIGH INFLATION CAUSES MOST SIGNIFICANT TAX CODE INCREASES IN NEARLY 40 YEARS

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ARLINGTON, Va., September 13, 2022 /PRNewswire/ — Bloomberg Tax today released its projected U.S. tax rates for 2023, which projects inflation-adjusted amounts in the tax code will increase by approximately 7.1% from 2022, more than double last year’s 3% increase. Bloomberg Tax also predicts that several key deductions for taxpayers will see notable year-over-year increases, with the exclusion of foreign-earned income rising to $120,000 of $112,000 and the annual exclusion for gifts of up to $17,000 of $16,000thus allowing taxpayers to increase their donations without tax consequences.

Published annually, Bloomberg Tax’s Projected U.S. Tax Rates report provides early and accurate notice of the potential tax savings that could be realized due to increased deduction limits, upward adjustments to tax brackets and increases to many other key thresholds. The full report is available at http://onb-tax.com/xuQh50KHZ18.

“We expect the inflation-adjusted amounts in the tax code to increase significantly in 2023 compared to previous years due to the economic environment,” said Heather Rothmann, vice president, analytics and content, Bloomberg Tax. “Taxpayers and advisors can use our projections to begin their 2023 tax planning before the IRS releases the official 2023 inflation-adjusted amounts later this year.”

The report also accounts for changes made under the recently enacted Cut Inflation Act, including increasing the §179D deduction for energy-efficient commercial building properties if new wage requirements and apprenticeships are met, which may attract a more sophisticated type of worker for companies using this tax incentive.

Other key adjustments, with comparisons of 2022 amounts and 2023 projections, include:

Personal income tax brackets

Married filing jointly and surviving spouses

2022 tax rate bracket income brackets

Income ranges of tax rate brackets forecast for 2023

10% – $0 to $20,550

10% – $0 to $22,000

12% – $20,550 to $83,550

12% – $22,000 to $89,450

22% – $83,550 to $178,150

22% – $89,450 to $190,750

24% – $178,150 to $340,100

24% – $190,750 to $364,200

32% – $340,100 to $431,900

32% – $364,200 to $462,500

35% – $431,900 to $647,850

35% – $462,500 to $693,750

37% – $647,850 or more

37% – $693,750 or more

Unmarried persons (other than surviving spouses and heads of household)

2022 tax rate bracket income brackets

Income ranges of tax rate brackets forecast for 2023

10% – $0 to $10,275

10% – $0 to $11,000

12% – $10,275 to $41,775

12% – $11,000 to $44,725

22% – $41,775 to $89,075

22% – $44,725 to $95,375

24% – $89,075 to $170,050

24% – $95,375 to $182,100

32% – $170,050 to $215,950

32% – $182,100 to $231,250

35% – $215,950 to $539,900

35% – $231,250 to $578,125

37% – $539,900 or more

37% – $578,125 or more

Standard deduction

Filing status

2022

Standard deduction

Projection 2023

Standard deduction

Married filing jointly/surviving spouses

$25,900

$27,700

heads of families

$19,400

$20,800

All other taxpayers

$12,950

$13,850

Alternative Minimum Tax (AMT)

Filing status

2022

AMT exemption amount

Projection 2023

AMT exemption amount

Married filing jointly/surviving spouses

$118,100

$126,500

Unmarried individuals

(other than surviving spouses)

$75,900

$81,300

Groom filing separately

$59,050

$63,250

Estates and trusts

$26,500

$28,400

The 2023 Projected US Tax Rates report is based on changes to the chained consumer price index for all urban consumers, which were released today by the US Bureau of Labor Statistics.

About Bloomberg Tax & Accounting
Bloomberg Tax & Accounting provides practitioner-focused research and technology solutions that deliver timely strategic insights to enable smarter decisions. From our unparalleled tax management portfolios to technology designed to streamline the most complex planning and compliance scenarios, we provide essential insights and analysis, actionable insights, and software that helps tax and accounting professionals around the world to mitigate risk and maximize business results. For more information, visitBloomberg tax.

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