Inflation is changing America's 2023 tax brackets: How it affects you

2022 has witnessed the highest consumer price increase since the 1980s. As a result, America's tax brackets are changing.

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Noting that tax brackets move alongside the inflation rate, the amount of tax you pay on your income gradually shifts in normal times.

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However, if your wages haven't risen enough, you are expected to fall into a lower tax bracket in 2023.

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The standard deduction for married couples filing jointly for the 2023 tax year has risen to $27,700, up $1,800 from the prior year.

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For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850, up $900.

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For heads of households, the standard deduction will be $20,800, up $1,400.

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The earned income tax credit, benefitting lower-income workers, has risen by around 7%, from $6,935 (2022 tax year) to $7,430 in 2023.

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The alternative minimum tax exemption amount for next year will be $81,200 for individuals and $126,500 for married couples filing jointly.

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