2025 IRS plans a 2.8% tax bracket adjustment to combat bracket creep due to low inflation.

The IRS plans to adjust tax brackets for 2025, with a predicted increase of 2.8%, the smallest adjustment in three years. This change aims to prevent "bracket creep," where individuals face higher taxes due to inflation despite no real income increase. The adjustment follows a decline in inflation, which hit a three-year low in August. Individual tax rates will remain unchanged, but cutoff points will rise.

September 25, 2024
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