Taxmen Give and Take

The U.S. income tax system last week entered the era of indexing. The Treasury Department announced that in view of inflation during the past twelve months, deductions, exemptions and tax brackets will be adjusted upward by 4.1% next year. Tax indexing was part of the Reagan Administration's 1981 tax-reduction act. Similar inflation adjustments will now be made annually. The following changes await taxpayers in 1985:

> The $1,000-per-person exemption will be increased to $1,040.

> The same proportional increase will apply to standard deductions. Those for single taxpayers will rise from $2,300 to $2,390. For joint returns, the deduction will go from...

Want the full story?

Subscribe Now

Subscribe
Subscribe

Get TIME the way you want it

  • One Week Digital Pass — $4.99
  • Monthly Pay-As-You-Go DIGITAL ACCESS$2.99
  • One Year ALL ACCESSJust $30!   Best Deal!
    Print Magazine + Digital Edition + Subscriber-only Content on TIME.com

Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!