The US tax system is progressive, meaning that the more you earn the more you pay. For the years 2021-2023 there are seven different brackets for each year (2020 was the same structure as well). Which bracket you are in depends on your taxable income; however, your bracket does not equal your tax rate.
Tax brackets work so that you pay part of your income at each level bracket as you move-up in income. In other words, someone in the 32% marginal rate bracket will pay 10% on part of their income, 12% on another part, then 22% on another band of income, 24% on the next tranche and finally, 32% on everything else. In other words, moving into a higher tax bracket does NOT mean you pay higher taxes on all your income.
Below are comparative tables for the taxable years 2021 – 2023. This way you can not only see the tax brackets that apply 2023 taxable income, but the trend changes over time.
Updates to 2023 Tax Rates and Brackets
Over the 3-year period shown below, there are seven brackets with progressive rates ranging from 10% up to 37% and they are the same overall years.
Federal income tax rate brackets are indexed for inflation. The brackets are adjusted using the chained Consumer Price Index (CPI). There were no structural changes to the tax brackets in any of the periods, so the only impact are increases year-over-year due to the inflation indexing.
The inflation adjustment factor for 2023 was 7% for example, raising income thresholds applied to the tax brackets across the board.
Tax Rates and Brackets
Below are the 2021-2023 tables for personal income tax rates. Note, that the 2023 figures below are the amounts applicable to the income earned during 2023 and paid in 2024 when you file your taxes.
Tax Brackets & Rates
| Single Taxpayers | |||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | |||
| 10% | 0 – $9,950 | 10% | 0 – $10,275 | 10% | 0 – $11,000 |
| 12% | $9,951 – $40,525 | 12% | $10,276 – $41,775 | 12% | $11,001 – $44,725 |
| 22% | $40,526 – $86,375 | 22% | $41,776 – $89,075 | 22% | $44,726 – $95,375 |
| 24% | $86,376 – $164,925 | 24% | $89,076 – $170,050 | 24% | $95,376 – $182,100 |
| 32% | $164,926 – $209,425 | 32% | $170,051 – $215,950 | 32% | $182,101 – $231,250 |
| 35% | $209,426 – $523,600 | 35% | $215,951 – $539,900 | 35% | $231,251 – $578,125 |
| 37% | $523,601and Over | 37% | $539,901 and Over | 37% | $578,126 and Over |
| Married Filing Jointly and Surviving Spouses | |||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | |||
| 10% | 0 – $19,900 | 10% | 0 – $20,550 | 10% | 0 – $22,000 |
| 12% | $19,901 – $81,050 | 12% | $20,551 – $83,550 | 12% | $22,001 – $89,450 |
| 22% | $81,051 – $172,750 | 22% | $83,551 – $178,150 | 22% | $89,451 – $190,750 |
| 24% | $172,751 – $329,850 | 24% | $178,151 – $340,100 | 24% | $190,751 – $364,200 |
| 32% | $329,851 – $418,850 | 32% | $340,101 – $431,900 | 32% | $364,201 – $462,500 |
| 35% | $418,851 – $628,300 | 35% | $431,901 – $647,850 | 35% | $462,501 – $693,750 |
| 37% | $628,301and Over | 37% | $647,851 and Over | 37% | $693,751 and Over |
| Married Filing Separately | |||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | |||
| 10% | 0 – $9,950 | 10% | 0 – $10,275 | 10% | 0 – $11,000 |
| 12% | $9,951 – $40,525 | 12% | $10,276 – $41,775 | 12% | $11,001 – $44,725 |
| 22% | $40,526 – $86,375 | 22% | $41,776 – $89,075 | 22% | $44,726 – $95,375 |
| 24% | $86,376 – $164,925 | 24% | $89,076 – $170,050 | 24% | $95,376 – $182,100 |
| 32% | $164,926 – $209,425 | 32% | $170,051 – $215,950 | 32% | $182,101 – $231,250 |
| 35% | $209,426 – $314,150 | 35% | $215,951 – $323,925 | 35% | $231,251 – $346,875 |
| 37% | $314,151and Over | 37% | $323,926 and Over | 37% | $346,876 and Over |
| Heads of Housholds | |||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | |||
| 10% | 0 – $14,200 | 10% | 0 – $14,650 | 10% | 0 – $15,700 |
| 12% | $14,201 – $54,200 | 12% | $14,651 – $55,900 | 12% | $15,701 – $59,850 |
| 22% | $54,201 – $86,350 | 22% | $55,901 – $89,050 | 22% | $59,851 – $95,350 |
| 24% | $86,351 – $164,900 | 24% | $89,051 – $170,050 | 24% | $95,351 – $182,100 |
| 32% | $164,901 – $209,400 | 32% | $170,051 – $215,950 | 32% | $182,101 – $231,250 |
| 35% | $209,401 – $523,600 | 35% | $215,951 – $539,900 | 35% | $231,251 – $578,100 |
| 37% | $523,601and Over | 37% | $539,901 and Over | 37% | $578,101 and Over |
Conclusion
While the tax brackets are the same in 2023 as the prior year, the income thresholds increased 7% following hot inflation in the CPI. You can lower your marginal rate or at least reduce the amount of taxable income subject to it by optimizing itemized deductions.
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