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Selasa, 27 Desember 2022

Inflation has made everything more expensive. Here are the changes coming in 2023 to help your money go further

A shopper waits to check out at a grocery store in San Francisco in May 2022.

As inflation wears on American consumers, a host of government and financial rules are changing to help fight rising prices that have reduced your spending power.

In many cases, the changes are intended to help people pay lower taxes and save more, too.

The 12-month inflation rate landed at 7.1% in November. That was down slightly from the 7.7% seen in October, but still near a four-decade high.

Starting in 2023, everything from Social Security benefits to state and local minimum wages are set to adjust — in most cases at rates not seen in a generation.

Some analysts and business leaders say they believe inflation has already peaked and that, even as prices rise, it will not be as severe as it was in the summer of 2022.

“Inflation continues to be a stubborn force globally, though we’ve started to see some moderating impacts in certain areas of our businesses compared to earlier in the year,” Abbott Laboratories CEO Robert Ford said Oct. 19, CNBC reported.

But that higher inflation has already been baked into many tax and wage figures that will change in 2023.

Social Security benefits

Social Security beneficiaries will see the largest annual cost-of-living adjustment (COLA) in a generation, with benefits increasing 8.7% beginning in January. Alongside an unusual, one-time decrease in the annual Medicare premium, fixed-income recipients may enjoy 100% of the COLA increase for 2023.

Income tax brackets

The IRS tax brackets corresponding to your marginal tax rates are also shifting upward — by 7% — thanks to inflation. In an October announcement, the IRS also said it would increase the standard deduction. That amount for married couples filing jointly for the 2023 tax year will rise to $27,700 — up $1,800 from the prior year. 

For single taxpayers and married individuals filing separately, the standard deduction is rising to $13,850, up $900; and for heads of households, the standard deduction will be $20,800, an increase of $1,400.



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