Will You Be in a New Tax Bracket Next Year?

A 1040 form used by U.S. taxpayers to file an annual income tax return in a file photo. Joe Raedle/Getty Images

No one likes paying taxes, but they are part of life. Getting your annual taxes as low as you can is something everyone wants, but this next tax year may mean paying more taxes for some. The Internal Revenue Service (IRS) will make a tax bracket-adjustment soon—and it probably will put some people into a higher tax bracket.

According to MarketWatch, annual inflation is calculated based on the (chained) Consumer Price Index. It is recalculated each year, and the changes are usually announced in either October or November.

Cost-of-Living Adjustments

Every year, the IRS makes a cost-of-living adjustment (COLA) based on inflation. The adjustment is mandatory for the IRS because it is built into the tax code to ensure a correlation between taxes and inflation.