Bloomberg Tax today released its 2023 Projected U.S. Tax Rates, which forecasts that inflation adjusted amounts in the tax code will increase by roughly 7.1% from 2022, more than double last year's increase of 3%. Bloomberg Tax also projects that several key deductions for taxpayers will see notable year-over-year increases, with the foreign earned income exclusion increasing to $120,000 from $112,000 and the annual exclusion for gifts increasing to $17,000 from $16,000, thereby allowing taxpayers to increase their gifts without tax implications.

Issued annually, Bloomberg Tax's Projected U.S. Tax Rates Report provides early, accurate notice of the potential tax savings that could be realized due to increases in deduction limitations, upward adjustments to tax brackets, and increases to numerous other key thresholds. The full report is available at http://onb-tax.com/xuQh50KHZ18.

"We predict that inflation-adjusted amounts in the tax code will increase significantly in 2023 compared to prior years due to the economic environment," said Heather Rothman, Vice President, Analysis & Content, Bloomberg Tax. "Taxpayers and advisors can use our projections to begin their 2023 tax planning before the IRS publishes the official 2023 inflation-adjusted amounts later this year."

The report also accounts for changes made under the recently enacted Inflation Reduction Act, including the increase in the §179D deduction for energy efficient commercial building property if new wage and apprenticeship requirements are met, which may entice a more sophisticated type of worker for companies using this tax incentive.