What is My Tax Bracket for the 2023 Tax Year?

Inflation is everywhere. Most of our focus is on the negative: higher car prices, higher home prices, higher food prices, etc. But, there were a few indirect benefits. For example, if you collect social security, your benefits increased by 8.7% in January. Further, tax brackets were increased, meaning your effective tax rate may actually come down next year. These changes will impact the taxes you file in 2024 for the 2023 tax year, but, it's never too early to look ahead and start to plan. 

The seven 2023 tax rates themselves didn't change (they are the same as those in effect for the 2022 tax year); however, the tax bracket ranges were modified based on inflation. Because of this, it's possible you could be in a different tax bracket for 2023 than the last time you reported your taxes, even if your income has not changed.¹

Reminder: Tax Brackets Are Marginal

The IRS divides income into different tax rates. Each subsequent portion of your income will have an increased tax rate. For example, if you are a single filer who made $44,725 in 2023, your first $11,000 will be taxed at 10 percent. The next portion of your income will be taxed at an increased rate; from $11,001 to $44,725, your tax rate will be 12 percent. 

As your income increases, you’ll fall into higher tax brackets and will have a higher tax rate for each portion of your income. 

Why Would My Tax Bracket Be Different? 

The IRS regularly adjusts tax brackets to take inflation into consideration. This is because, with inflation, people will face higher prices, meaning the purchasing power of their dollar is decreased. Knowing this, the IRS adjusts brackets in order to avoid bracket creep, a circumstance that occurs when inflation pushes your income into a higher tax bracket, or credits and deductions are reduced. In this scenario, an individual may not actually have increased purchasing power or greater disposable income, even with an increase in wages and salaries.

2023 Tax Brackets 

Without further ado, here are the 2023 tax brackets according to your filing status and income from the IRS.¹

10% Tax Rate

• Single Individuals: from $0 to $11,000
• Married Individuals Filing Jointly: from $0 to $22,000
• Heads of Households: from $0 to $15,700
• Married Individuals Filing Separately: from $0 to $11,000

12% Tax Rate

• Single Individuals: from $11,001 to $44,725
• Married Individuals Filing Jointly: from $22,001 to $89,450   
• Heads of Households: from $15,701 to $59,850
• Married Individuals Filing Separately: from $11,001 to $44,725

22% Tax Rate

• Single Individuals: from $44,726 to $95,375
• Married Individuals Filing Jointly: from $89,451 to $190,750       
• Heads of Households: from $59,851 to $95,350
• Married Individuals Filing Separately: from $44,726 to $95,375

24% Tax Rate

• Single Individuals: from $95,376 to $182,100        
• Married Individuals Filing Jointly: from $190,751 to $364,200
• Heads of Households: from $95,351 to $182,100
• Married Individuals Filing Separately: from $95,376 to $182,100

32% Tax Rate

• Single Individuals: from $182,101 to $231,250  
• Married Individuals Filing Jointly: from $364,201 to $462,500        
• Heads of Households: from $182,101 to $231,250
• Married Individuals Filing Separately: from $182,101 to $231,250

35% Tax Rate

• Single Individuals: $231,251 to $578,125
• Married Individuals Filing Jointly: from $462,501 to $693,750
• Heads of Households: from $231,251 to $578,100
• Married Individuals Filing Separately: from $231,251 to $346,875

37% Tax Rate

• Single Individuals: over $578,125    
• Married Individuals Filing Jointly: over $693,750
• Heads of Households: over $578,100
• Married Individuals Filing Separately: over $346,875

In addition to the tax bracket adjustments, the IRS also raised standard deductions, further reducing your future tax bill, at the margin. The 2023 standard deduction will rise to $13,850 for single filers. Married couples will be allowed to take a combined standard deduction of $27,000.The benefits to marriage remain myriad.