Understanding Tax Brackets and Rates for 2023
What Are Tax Brackets?
In the U.S., the federal income tax system is progressive, meaning that as your income
increases, you pay a higher rate on the portion of income within each tax bracket. The IRS
divides income into ranges, and each range is taxed at a specific rate.
2023 Tax Brackets
For individuals and married couples filing jointly, here are the tax rates for 2023:
● Single Filers:
○ 10%: Up to $11,000
○ 12%: $11,001 to $44,725
○ 22%: $44,726 to $95,375
○ 24%: $95,376 to $182,100
○ 32%: $182,101 to $231,250
○ 35%: $231,251 to $578,100
○ 37%: Over $578,100
● Married Filing Jointly:
○ 10%: Up to $22,000
○ 12%: $22,001 to $89,450
○ 22%: $89,451 to $190,750
○ 24%: $190,751 to $364,200
○ 32%: $364,201 to $462,500
○ 35%: $462,501 to $693,750
○ 37%: Over $693,750
How Tax Brackets Work
● Progressive Tax System: Tax rates only apply to income within each bracket. For
example, if you are a single filer earning $50,000:
○ The first $11,000 is taxed at 10%.
○ The next $33,725 is taxed at 12%.
○ The remaining $5,275 is taxed at 22%.
Your effective tax rate (what you actually pay as a percentage of total income) will be lower
than your marginal tax rate (the rate that applies to your last dollar of income).
