The Internal Revenue Service revealed that it would adjust federal income tax brackets and deductions in light of rising price levels in the United States.
On Wednesday, the Department of Labor announced that year-over-year inflation for consumer prices reached 6.2% in October — the highest increase in thirty years. Prices for fuel, used vehicles, and food saw significant increases.
Also on Wednesday, the IRS raised income tax rate thresholds for tax year 2022 to prevent “bracket creep” — defined by the Tax Foundation as inflation pushing taxpayers into higher income tax brackets or reducing the value of credits, deductions, and exemptions, resulting in higher taxes without higher income.
Fox Business reports that most of the tax rates rose by 3% — the largest increase in four years.