2023 Income Tax Rates and Brackets

Additionally, the agency released the standard deduction for next year. It is increasing by $900 to $13,850 for single taxpayers, and by $1,800 for married couples, to $27,700. For heads of household, the 2023 standard deduction will be $20,800. That’s an increase of $1,400.

Here are the marginal rates for for tax year 2023, depending on your tax status.

Single filers

• 10%: income of $11,000 or less
• 12%: income between $11,000 to $44,725
• 22%: income between $44,725 to $95,375
• 24%: income between $95,375 to $182,100
• 32%: income between $182,100 to $231,250
• 35% income between $231,250 to $578,125
• 37%: income greater than $578,125

Married filing jointly

• 10%: income of $22,000 or less
• 12%: income between $22,000 to $89,450
• 22%: income between $89,450 to $190,750
• 24%: income between $190,750 to $364,200
• 32%: income between $364,200 to $462,500
• 35% income between $462,500 to $693,750
• 37%: income greater than $693,750

Additionally, the maximum Earned Income Tax Credit for 2023 is $7,430 for qualifying taxpayers who have three or more qualifying children. The maximum contribution to a healthcare flexible spending account is also increasing, from $2,850 to $3,050.

Wealthy Americans will also be able to shield significantly more assets from the estate tax in 2023. Individuals will be able to transfer up to $12.92 million tax-free to their descendants, up from $12.06 million in 2022. A married couple can pass on double that. And the annual exclusion for gifts increases to $17,000 for calendar year 2023.

Each year the IRS adjusts dozens of important tax provisions based on a formula set by Congress. Given soaring inflation rates over the past year, the adjustments for 2023 are more significant than in past years.

Assuming all else stays the same, this means that workers will see higher take-home pay starting in January.

The agency has yet to announce the maximum contribution amounts to 401(k) plans or the income thresholds for retirement accounts for 2023. Last week, the Social Security Administration announced a decades-high cost-of-living-adjustment, also due to inflation.