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Inflation can affect almost every aspect of our finances. Big jumps in tax brackets can save you money, especially if you’re working and your raises, like most workers, don’t keep pace with inflation. Plus, the $2,000 increase in 401(k) limits means you can put more money away for retirement. On the other hand, the huge increase in the maximum earnings taxable by Social Security means that higher earners will pay more in FICA taxes. If you’re a homeowner, you’ll want to review your insurance because there’s a good chance you’re underinsured.

By now, you’re probably familiar with the more obvious ways inflation affects your finances. Your money doesn’t go as far as, say, the grocery store. Credit cards and other variable-rate debt are rising in price as the Federal Reserve raises short-term interest rates to fight inflation. Interest rates are also rising, albeit more slowly, on savings accounts.

But inflation helps or hurts other ways that have received less attention. Here are some key changes to watch for in 2023.


The IRS raised the standard deduction, which more than 90% of taxpayers take, by $1,800 for married couples filing jointly and $900 for single filers. The standard deduction amounts in 2023 will be $27,700 for married couples and $13,850 for single filers.

In addition, the IRS adjusted federal tax brackets upward by about 7%. The larger deduction, higher brackets and other changes mean most taxpayers will pay less in 2023, especially if their incomes haven’t kept pace with inflation.


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