This morning, the Bureau of Labor Statistics released its August 2011 estimate for the Consumer Price Index (CPI), which allows us to determine what next year’s tax brackets will look like. The IRS uses CPI numbers to adjust tax bracketsA tax bracket is the range of incomes taxed at given rates, which typically differ depending on filing status. In a progressive individual or corporate income tax system, rates rise as income increases. There are seven federal individual income tax brackets; the federal corporate income tax system is flat. (and other parameters) for inflation; each year’s brackets are based on the CPI-U from September to August of the previous year. The August 2011 number is therefore the final piece of data needed to determine the tax brackets for 2012.
| Key Tax Parameter Amounts for 2012 | ||
| Tax Parameter | 2011 Amount | 2012 Amount |
| Standard Deduction | ||
| For singles | $5,800 | $5,950 |
| For married filing jointly | $11,600 | $11,900 |
| For heads of households | $8,500 | $8,700 |
| For married filing separately | $5,800 | $5,950 |
| Personal Exemption | $3,700 | $3,800 |
| Tax Bracket Thresholds for Single Filers | ||
| 10% rate | $0 | $0 |
| 15% rate | $8,500 | $8,700 |
| 25% rate | $34,500 | $35,350 |
| 28% rate | $83,600 | $85,650 |
| 33% rate | $174,400 | $178,650 |
| 35% rate | $379,150 | $388,350 |
| Tax Bracket Thresholds for Heads of Households | ||
| 10% rate | $0 | $0 |
| 15% rate | $12,150 | $12,400 |
| 25% rate | $46,250 | $47,350 |
| 28% rate | $119,400 | $122,300 |
| 33% rate | $193,350 | $198,050 |
| 35% rate | $379,150 | $388,350 |
| Tax Bracket Thresholds for Married Filing Jointly | ||
| 10% rate | $0 | $0 |
| 15% rate | $17,000 | $17,400 |
| 25% rate | $69,000 | $70,700 |
| 28% rate | $139,350 | $142,700 |
| 33% rate | $212,300 | $217,450 |
| 35% rate | $379,150 | $388,350 |
| Tax Bracket Thresholds for Married Filing Separately | ||
| 10% rate | $0 | $0 |
| 15% rate | $8,500 | $8,700 |
| 25% rate | $34,500 | $35,350 |
| 28% rate | $69,675 | $71,350 |
| 33% rate | $106,150 | $108,725 |
| 35% rate | $189,575 | $194,175 |
| Source: Tax Foundation calculations using BLS CPI-U Data |
For more information and detail, read our latest report, “Tax Foundation Projects 2012 Tax Parameters Following Release of August CPI Data.”
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