Inflation Drives Big Changes in IRS Tax Levels for 2023

Record-high inflation translated to some big hikes in the Internal Revenue Service’s dozens of new inflation adjustments affecting individual income tax brackets, deductions and credits for 2023. The IRS will allow Americans to shield more of their income from taxes in 2023, raising income thresholds for all tax brackets. The top tax rate of 37% will apply to individuals with income exceeding $578,125 and married couples filing jointly with income more than $693,750. Both of those amounts are up 7% from 2022 to track with increases in the consumer price index. The estate tax threshold increases to $12.92 million for 2023; double for spouse.