The Daily Money: Taxes for having taxes? How inflation might impact tax season

Inflation is sometimes referred to as a hidden tax because we don't typically see it on receipts. It's also a hidden tax on your tax return. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

The Daily Money ALL THE MONEY NEWS YOU NEED TO KNOW   Sunday, March 13 Good morning! I'm Elisabeth Buchwald and it's time for another edition of "what should I know about my taxes," AKA The Daily Money ft. Sundays.   A lot of what I'm about to tell you may not sit well with you. Before we begin, take a moment to recognize that you made it to Sunday. Spring weather is on its way (at least for those of us who live in the Southern part of the Northeast). Pour yourself your favorite drink (no judgment, it's 5 o'clock somewhere) and find somewhere comfortable to sit.  Now that I made you expect worse things than what I'm probably about to tell you, this shouldn't be too bad.  Inflation sucks. There, I said it. I'm sure we can all think of examples of things that are costing more. That's why inflation is often referred to as a hidden tax, because we don't typically see it on receipts, but boy is it there.  Inflation is also a hidden tax within your tax return.  For instance, 2021 was a huge year for raises. Employers increased wages to keep up with the price increases, partially because of labor shortages but also because inflation is at the highest level in 40 years. Simply put, because our incomes determine what tax rate we're subject to, that raise you got might put you in a bind.   The good news at least is that at the federal level, tax brackets are adjusted for inflation every year. But if you live in Alabama, Connecticut, Delaware, Georgia, Hawaii, Kansas, Louisiana, Maryland, Mississippi, New Jersey, New Mexico, New York, Oklahoma, Virginia, West Virginia or Washington, D.C., the state income tax brackets you fall under aren't adjusted for inflation.  That means if your raise bumped you into a higher tax bracket but you can't actually afford more with it, you're getting taxed as though you can.   There are many other ways inflation makes tax season even more painful (think Social Security income, life insurance premiums). You can read more about all of that in my forthcoming story.  Your weekend tax break Springtime isn't just for taxes. It's also for cleaning and apparently people are enjoying cleaning their homes using the FlyLady method. And yes, it is another one of those TikTok trends gone viral. Anyway, that does it for now. Until next Sunday, Daily Money subscribers. Thanks for reading.   Can you negotiate your tax bill? Yes. Here's how. The IRS will almost always allow you to get on an installment plan. And in select situations, they might let you pay less than you owe. These 13 states tax residents' Social Security benefits Seniors will owe a lot more in Social Security taxes in 2022 Settling debts this year? Your settlement could be taxable. Tax extensions, explained: More time to file, not extra time to pay 4 tax mistakes you can't afford to make 5 things you may not realize are tax-deductible The 3 smartest ways to use your tax refund What to know before filing your tax return When to expect your tax refund if you took child tax credit money   FOLLOW US Problem viewing email? View in browser Unsubscribe • Manage Newsletters • Terms of Service • Privacy Policy/Your California Privacy Rights • Privacy Notice • Do Not Sell My Info/Cookie Policy • Feedback © 2022 USA TODAY, a division of Gannett Satellite Information Network, LLC. 7950 Jones Branch Drive, McLean, VA 22102