IRS Makes Highest Deductible Hike On Record Thanks To Inflation

The Internal Revenue Service (IRS) increased the individual tax deductible for 2023 at the highest rate in more than 35 years due to inflation.

Individual tax deductibles increased by $900 to $13,850, up $1,800 to $27,700 for married couples filing jointly, a roughly 7% increase compared to tax year 2022, the IRS announced Tuesday. This increase is the largest hike since 1985, when tax brackets were first tied to inflation, The Washington Post reported.

In general, tax brackets also rose by roughly 7%, with the minimum income for the top rate of 37% skyrocketing from $539,900 to $578,125, according to the IRS. The lowest bracket of 10% now applies to all individuals earning $11,000 or less, up from $10,275 in tax year 2022.

Inflation, as measured by the Consumer Price Index (CPI), has remained at or above 8% on an annual basis since March 2022, according to archived data from the Bureau of Labor Statistics.