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

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Sep 13, 2022, 11:50 ET

ARLINGTON, Va., Sept. 13, 2022 /PRNewswire/ -- Bloomberg Tax today released its 2023 Projected U.S. Tax Rates, which forecasts that inflation adjusted amounts in the tax code will increase by roughly 7.1% from 2022, more than double last year's increase of 3%. Bloomberg Tax also projects that several key deductions for taxpayers will see notable year-over-year increases, with the foreign earned income exclusion increasing to $120,000 from $112,000 and the annual exclusion for gifts increasing to $17,000 from $16,000, thereby allowing taxpayers to increase their gifts without tax implications.

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

"We predict that inflation-adjusted amounts in the tax code will increase significantly in 2023 compared to prior years due to the economic environment," said Heather Rothman, Vice President, Analysis & Content, Bloomberg Tax. "Taxpayers and advisors can use our projections to begin their 2023 tax planning before the IRS publishes the official 2023 inflation-adjusted amounts later this year."

The report also accounts for changes made under the recently enacted Inflation Reduction Act, including the increase in the §179D deduction for energy efficient commercial building property if new wage and apprenticeship requirements are met, which may entice a more sophisticated type of worker for companies using this tax incentive.

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

Individual Income Tax Rate Brackets

Married Filing Jointly and Surviving Spouses
2022 Tax Rate Bracket Income Ranges	Projected 2023 Tax Rate Bracket Income Ranges
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 Individuals (other than Surviving Spouses and Heads of Households)
2022 Tax Rate Bracket Income Ranges	Projected 2023 Tax Rate Bracket Income Ranges
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	Projected 2023 Standard Deduction
Married Filing Jointly/Surviving Spouses	$25,900	$27,700
Heads of Household	$19,400	$20,800
All Other Taxpayers	$12,950	$13,850

Alternative Minimum Tax (AMT)

Filing Status	2022 AMT Exemption Amount	Projected 2023 AMT Exemption Amount
Married Filing Jointly/Surviving Spouses	$118,100	$126,500
Unmarried Individuals (other than Surviving Spouses)	$75,900	$81,300
Married Filing Separately	$59,050	$63,250
Estates and Trusts	$26,500	$28,400

The 2023 Projected U.S. Tax Rates report is based on changes to the Chained Consumer Price Index for All Urban Consumers, which were published today by the U.S. Bureau of Labor Statistics.

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SOURCE Bloomberg Tax & Accounting