So, even if you drop into a lower tax bracket and take home a slightly bigger paycheck next year, it's likely inflation is already eating into the amount you pay for housing, gas, food or other essentials. In either scenario, it's important to understand that since inflation is still lingering, you're likely feeling the sting of high prices in different ways. But you may remain in the same bracket or move up to a higher one. It's possible you'll still fall into a lower tax bracket, based on the new changes. If you make more in 2024 than you did in 2023, the amount your pay has increased will determine where you fall. That means you'll be on the hook for less federal tax next year and will have less money withdrawn from your paycheck. But if your income remains at $45,000 in 2024, you'll drop down to the 12% bracket. When the IRS raises federal income tax brackets, you might fall into a lower tax bracket than you did the year before - particularly if your income has stayed the same.įor example, if you made $45,000 in 2023, you would have fallen into the 22% tax bracket for that tax year. Why tax code changes could affect your payday

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