Prepare for New Indexing in 2006

The indexing of personal tax brackets lowers tax bills by including more of people’s incomes in lower brackets – in the 15-percent rather than the 25-percent bracket, for example.

As a result across-the-board inflation adjustments to the brackets provide more relief for taxpayers in the upper brackets.

One example of the effect of indexing is a married couple filing jointly with total taxable income of $100,000. They will pay $215 less in income taxes in 2006 than they will on the same income for 2005.