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The Internal Revenue Service released its inflation adjustments for 2023 federal income tax rates and brackets this week.
The IRS automatically adjusts tax rates each year to reflect inflation. Usually these adjustments are small. But following the fastest price growth in four decades, Americans can expect noticeably higher tax brackets and a larger standard deduction next tax year.
The breakpoint for each tax bracket will be about 7% higher across the board in 2023.
The IRS hasn’t yet released 2023 limits for 401(k) accounts and individual retirement accounts (IRAs), but those numbers are expected next month.
2023 Tax Brackets
There are seven tax brackets that range from 10% to 37%.
You’ll use the 2022 brackets to determine your tax bill that will be due on or before April 18, 2023. You’ll use the 2023 brackets when you file your taxes in 2024.
Tax brackets are also used to determine your ordinary income rate.
Unmarried Individuals
| Tax Bracket | 2022 Taxable Income (use when you file in 2023) | 2023 Taxable Income (use when you file in 2024) |
|---|---|---|
| 10% | Up to $10,275 | Up to $11,000 |
| 12% | $10,275 to $41,775 | $11,000 to $44,725 |
| twenty two% | $41,775 to $89,075 | $44,725 to $95,375 |
| twenty four% | $89,075 to $170,050 | $95,375 to $182,100 |
| 32% | $170,050 to $215,950 | $182,100 to $231,250 |
| 35% | $215,950 to $539,900 | $231,250 to $578,125 |
| 37% | Over $539,900 | Over $578,125 |
Married Individuals Filing Jointly or Surviving Spouses
| Tax Bracket | 2022 Taxable Income (use when you file in 2023) | 2023 Taxable Income (use when you file in 2024) |
|---|---|---|
| 10% | Up to $20,550 | Up to $22,000 |
| 12% | $20,550 to $83,550 | $22,000 to $89,450 |
| twenty two% | $83,550 to $178,150 | $89,450 to $190,750 |
| twenty four% | $178,150 to $340,100 | $190,750 to $364,200 |
| 32% | $340,100 to $431,900 | $364,200 to $462,500 |
| 35% | $431,900 to $647,850 | $462,500 to $693,750 |
| 37% | Over $647,850 | Over $693,750 |
Head of Household
| Tax Bracket | 2022 Taxable Income (use when you file in 2023) | 2023 Taxable Income (use… |
|---|
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