Inflation may be taking more out of workers’ pay but it also has a silver lining with the taxman, as the IRS announced Tuesday that it is hiking the standard deduction by $400 and raising the maximum payment for key tax credits next year.

Income tax rates will remain the same, but the levels at which they kick in are being adjusted up.

The top 37% rate will kick in at $626,350 for single taxpayers, up $17,000 from this year. At the low end, the 10% rate applies to incomes of $11,925 or less, up $325 compared to this year.

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Those were part of more than 60 adjustments to taxes announced by the IRS. The changes are built into law and are meant to ensure that inflation creep doesn’t slam taxpayers too badly.

They cover tax year 2025, which means they apply to returns due in early 2026.

The standard deduction is the main item, with the vast majority of taxpayers claiming it rather than itemizing their deductions.

The deduction was $13,850 for single filers in 2023 and $14,600 this year. Next year it will rise to $15,000. Couples filing jointly would see double those rates.

The alternative minimum tax exemption amount increases to $88,100 for unmarried filers and begins to phase out at $626,350.

The maximum Earned Income Tax Credit will rise to $8,046, up more than $200 compared to this year.

The transportation fringe benefit monthly limit will rise $10, to $325.

And the estate tax exclusion will reach nearly $14 million, up nearly $400,000.

The increases aren’t as big as the last couple of years. That’s a reflection of the moderation of the rate of inflation from the worst months earlier in the Biden administration.

That’s also reflected in Social Security’s cost-of-living adjustment, which will be smaller next year than the last three years.

While this year’s tax changes are modest, bigger changes are on the horizon.

Unless Congress acts, many of the tax brackets set by then-President Trump’s 2017 tax overhaul will expire at the end of next year.

The standard deduction would revert to a much lower amount, the seven tax brackets would snap back and the estate tax exclusion would fall.

It will amount to a $400 billion-a-year tax increase, according to the Cato Institute.

Both Republicans and Democrats seem eager to extend the tax breaks that apply to those on the lower rungs. Democrats, though, have said they would let the breaks expire for those in the upper incomes.

The difficulty is that all of the tax breaks will expire without action, leaving the two parties in a game of chicken with average Americans’ tax bills — and the size of the federal deficit.