Will the tax brackets change in 2023 compared to the previous year?
Tax brackets for the 2023 tax year have gone through major adjustments due to recent record levels of inflation. What changes should taxpayers expect?
Tax brackets are a fundamental part of the progressive federal income tax system of the US, where the tax rate increases as a taxpayer’s income rises. Tax brackets are used to segment income levels and apply different tax rates to each segment.
The progressive tax system is designed to impose higher tax rates on individuals and households with higher incomes while providing tax relief to those with lower incomes. If an individual’s taxable income falls within a particular range, they pay the tax rate corresponding to that range.
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Last year’s inflation shifts tax brackets
These brackets are usually adjusted each year for inflation, and in typical times, the income tax you need to pay fluctuates gradually. However, the record-setting levels of inflation last year have caused tax brackets to move up and compensate for high prices.
The Internal Revenue Service has announced that the upper limits for tax brackets for 2023 have been increased by 7% compared to the brackets for last year’s income tax returns. The higher bracket limits could mean that you will not pay more taxes for this year. It will even be possible that you will fall into a lower bracket for the current tax year and pay less taxes. The tax brackets and federal income tax rates for this year (to be filed in 2024) are listed below, which you can compare to the numbers in 2022, according to Forbes Advisor.
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2023 tax brackets for single filers
| Taxable income | Tax due |
|---|---|
| Not over $11,000 | 10% of taxable income |
| Over $11,000 but not over $44,725 | $1,100 plus 12% of the excess over $11,000 |
| Over $44,725 but not over $95,375 | $5,147 plus 22% of the excess over $44,725 |
| Over $95,375 but not over $182,100 | $16,290 plus 24% of the excess over $95,375 |
| Over $182,100 but not over $231,250 | $37,104 plus 32% of the excess over $182,100 |
| Over $231,250 but not over $578,125 | $52,832 plus 35% of the excess over $231,250 |
| Over $578,125 | $174,238.25 plus 37% of the excess over $578,125 |
2023 tax brackets for married people filing separately
| Taxable income | Tax due |
|---|---|
| Not over $11,000 | 10% of taxable income |
| Over $11,000 but not over $44,725 | $1,100 plus 12% of the excess over $11,000 |
| Over $44,725 but not over $95,375 | $5,147 plus 22% of the excess over $44,725 |
| Over $95,375 but not over $182,100 | $16,290 plus 24% of the excess over $95,375 |
| Over $182,100 but not over $231,250 | $37,104 plus 32% of the excess over $182,100 |
| Over $231,250 but not over $346,875 | $52,832 plus 35% of the excess over $231,250 |
| Over $346,875 | $93,300.75 plus 37% of the excess over $346,875 |
You can compare the changes for the 2023 tax year with last year’s brackets.
2022 tax brackets for single filers
| Taxable income | Tax due |
|---|---|
| Not over $10,275 | 10% of the taxable income |
| Over $10,275 but not over $41,775 | $1,027.50 plus 12% of the excess over $10,275 |
| Over $41,775 but not over $89,075 | $4,807.50 plus 22% of the excess over $41,775 |
| Over $89,075 but not over $170,050 | $15,213.50 plus 24% of the excess over $89,075 |
| Over $170,050 but not over $215,950 | $34,647.50 plus 32% of the the excess over $170,050 |
| Over $215,950 but not over $539,900 | $49,335.50 plus 35% of the excess over $215,950 |
| Over $539,900 | $162,718 plus 37% of the excess over $539,900 |
2022 tax brackets for married people filing separately
| Taxable income | Tax due |
|---|---|
| Not over $10,275 | 10% of the taxable income |
| Over $10,275 but not over $41,775 | $1,027.50 plus 12% of the excess over $10,275 |
| Over $41,775 but not over $89,075 | $4,807.50 plus 22% of the excess over $41,775 |
| Over $89,075 but not over $170,050 | $15,213.50 plus 24% of the excess over $89,075 |
| Over $170,050 but not over $215,950 | $34,647.50 plus 32% of the the excess over $170,050 |
| Over $215,950 but not over $323,925 | $49,335.50 plus 35% of the excess over $215,950 |
| Over $323,925 | $86,127 plus 37% of the excess over $323,925 |