October 31, 2013
Hot off the presses, the IRS just issued a notice of its annual inflation adjustments for the 2014 tax year.
According to the release, the inflation adjustment is 1.6%.
So now, for example, couples earning more than $457,600 will fall in the 39.6% marginal tax bracket, as opposed to $450,000 last year.
A single individual earning under $9,075 will fall in the 10% bracket, as opposed to $8,925 last year.
The increase always applies to individuals who expatriate; an individual will now be obliged to pay the exit tax upon renunciation if his/her average annual net income tax for the last five years exceeded $157,000 per year. This is also up slightly from last year.
The real question is, though, especially for anyone who has pumped gas, gone to a grocery store, paid university tuition and insurance premiums, etc., does the rate of inflation really feel like 1.6%?