NASHVILLE, Tenn. (WTVF) — Tennesseans know high inflation is causing all kinds of costs to soar. So how about some good news tied to the uptick?
The IRS announced it's making adjustments in response to that inflation, which could save you hundreds of dollars.
First things first: these are changes that the IRS makes every year tied to inflation, not related to any political move in Washington. Experts said Americans just don't usually notice them in years when inflation isn't so high.
The IRS announced a tax bracket shift, meaning starting next year depending on what you make, some of your money may be taxed at a lower rate — meaning you keep more of it.
The IRS is also making another big change: raising the standard deduction — money you can earn without being taxed.
For the average married couple filing together in Nashville, that alone would mean paying $396 less in taxes next year.
Experts said you will likely notice the extra money in your paycheck.
"It's becoming more expensive to go to the grocery store, people are facing rent increases, all these expenses are going up," said professor Andy Borchers with Lipscomb University. "So this is a breath of fresh air in an otherwise pretty gloomy picture in terms of the economy overall."
The IRS also increased the amount of money an employee can contribute to a Flexible Spending Account — that's money you can set aside for medical expenses that doesn't get taxed.
That increase is 200 dollars more a year.
