The reported inflation rate for the year 2022 was 6.5%, and many tax brackets were increased due to inflation. Well, not really, and this is another way inflation will take a bite from you.
For example, when looking at the 2022 tax brackets for a single person and comparing those brackets to 2021, you will see that the brackets increased. However, the brackets only increased by 3.1% vs. the inflation rate of 6.5%. This has the same effect as raising taxes and may even push you into a higher tax bracket.
Unfortunately, the brackets in the State of New Jersey have not been raised in many, many years. There is no law in NJ that requires tax brackets to be indexed with inflation.
Depending upon your income, this can amount to several hundred dollars to thousands of dollars of extra taxes that you must pay.
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