2022-2023 tax brackets
How federal income tax rates work
It’s that time again: tax season. The IRS sets seven tax brackets (10%, 12%, 22%, 24%, 32%, 35% and 37%) that determine the percentage of your income that goes toward taxes. Only taxable income is counted, which is your annual gross income minus any deductions.
See what the current tax rates are for the year and how they will affect your paycheck.
Key insights
- Tax brackets are not fixed and can change over time due to inflation and changes in tax laws.
- Deductions and exemptions are available to reduce taxable income and potentially lower an individual's tax bracket.
- Tax brackets are marginal, which means that each bracket only applies to the portion of income within that range.
Federal tax brackets for 2022
For 2022, the lowest tax bracket starts at a taxable income of:
- $10,275 and under for single filers
- $20,550 and under for married filers
The highest tax bracket starts at a taxable income of:
- $539,900 for singles and heads of households
- $647,850 for those who are married
For taxes due in April 2023 (or in October 2023 with an extension), see the federal tax bracket table below.
| Single individuals | Married couples filing jointly | Heads of households | |
|---|---|---|---|
| 10% | $0 - $10,275 | $0 - $20,550 | $0 - $14,650 |
| 12% | $10,275 - $41,775 | $20,550 - $83,550 | $14,650 - $55,900 |
| 22% | $41,775 - $89,075 | $83,550 - $178,150 | $55,900 - $89,050 |
| 24% | $89,075 - $170,050 | $178,150 - $340,100 | $89,050 - $170,050 |
| 32% | $170,050 - $215,950 | $340,100 - $431,900 | $170,050 - $215,950 |
| 35% | $215,950 - $539,900 | $431,900 - $647,850 | $215,950 - $539,900 |
| 37% | $539,900+ | $647,850+ | $539,900+ |
» MORE: How to file your taxes for free
Federal tax brackets for 2023
The IRS has published the tax brackets for 2023 (for filing in 2024). All ranges have increased slightly across all filing statuses.
| Single individuals | Married couples filing jointly | Heads of households | |
|---|---|---|---|
| 10% | $0 - $11,000 | $0 - $22,000 | $0 - $15,700 |
| 12% | $11,000 - $44,725 | $22,000 - $89,450 | $15,700 - $59,850 |
| 22% | $44,725 - $95,375 | $89,450 - $190,750 | $59,850 - $95,350 |
| 24% | $95,375 - $182,100 | $190,750 - $364,200 | $95,350 - $182,100 |
| 32% | $182,100 - $231,250 | $364,200 - $462,500 | $182,100 - $231,250 |
| 35% | $231,250 - $578,125 | $462,500 - $693,750 | $231,250 - $578,100 |
| 37% | $578,125+ | $693,750+ | $578,100+ |
How do tax brackets work
The U.S. has seven tax brackets, or income ranges, to determine individual income tax rates. Each tax bracket has a different rate, ranging from 10% to 37%, that applies to taxable income. Lower income brackets have lower tax rates, and higher income brackets have higher tax rates. In other words, as taxable income increases, the rate increases.
“If the taxable income falls between two tax brackets, as income tax is progressive, only the part of taxable income in excess of the lower bracket will be taxed at the higher bracket,” said Dr. Lei Han, CPA, associate professor of accounting at Niagara University.
If you want to lower your taxable income to avoid hitting the higher tax bracket, Han advised to up your contributions to pre-taxed accounts, such as your 401(k), individual retirement account (IRA) and health savings account (HSA).
Income requirements for each tax bracket vary based on the taxpayer’s filing status. Most tax brackets for married taxpayers are twice the amount of those for single individuals.
» MORE: How to file back taxes
FAQ
How do you know which tax bracket you are in?
To know what tax bracket you’re in, you have to know how much your yearly taxable income is. Taxable income is your gross annual income minus any allowable tax deductions. Your bracket is determined by that amount.
What is alternative minimum tax?
Alternative minimum tax (AMT) is another method of calculating taxable income that helps ensure wealthy taxpayers pay at least a minimum amount of taxes. In the AMT calculation, certain itemized deductions and adjustments used in the standard way of calculating taxable income are not allowed, including state and local taxes, medical expenses, mortgage interest on home equity debt and accelerated depreciation. Taxpayers pay whichever calculation method — standard or AMT — results in the higher tax due.
What is marginal tax?
A marginal tax rate is the rate taxpayers pay on taxable income. Marginal tax rates in the U.S. vary by income, and the IRS currently uses seven different income ranges, or federal tax brackets, to determine that rate.
Each of the seven U.S. tax brackets has a different marginal tax rate, ranging from 10% to 37%. As income increases, taxpayers only pay a higher marginal tax rate for each dollar that passes the income range threshold for the next tax bracket. Unless a taxpayer’s income is within the range for the lowest tax bracket, they pay multiple marginal tax rates on their income.
Is Medicare and Social Security included in the federal tax rate?
No, the taxes you pay for Medicare and Social Security are not included as part of your taxable income and are therefore not subject to the federal income tax rate.
Bottom line
If you make more money, you pay a higher percentage of your income in taxes (unlike a flat tax system where everyone’s income is taxed at the same rate). If your taxable income falls in more than one tax bracket, only the portion of your income within the bracket is taxed at that rate.
Tax brackets change from year to year depending on changes in income, filing status, inflation and new tax laws.
Article sources
- IRS, " IRS provides tax inflation adjustments for tax year 2023 ." Accessed Feb. 16, 2023.
- IRS, " IRS provides tax inflation adjustments for tax year 2022 ." Accessed Feb. 16, 2023.
- Tax Foundation, “ 2023 Tax Brackets .” Accessed Feb. 16, 2023.
- Tax Foundation, “ 2022 Tax Brackets .” Accessed Feb. 16, 2023.
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