IRS Announces New Tax Brackets ~ What You Need To Know

January 11, 2023

The IRS recently announced an increase in the income thresholds for all brackets for the income tax year 2023 (returns filed in 2024). Amidst rising inflation, both the federal income tax rates and the standard deduction will increase in 2023. 

In 2023, the standard deduction for joint filers will rise to $27,700 from the current $25,900. Previously, single filers could only claim $12,950; now, they may claim $13,850. 

For those with low to moderate incomes, the earned income tax credit has been increased, allowing them to deduct up to $7,430. And workers may put $3,050 into their health flexible spending account.

Countless other elements, including the alternative minimum tax, a parallel system for higher earnings, and the inheritance tax exemption for affluent families, had their numbers inflated by the IRS as well.

Here’s a brief overview of the marginal tax brackets for married filing jointly and single filers for the year 2023. 

For married filing jointly – 

Taxable Income  Taxes Owed 
$22,000 or less 10% of the taxable income
$22,001 – $89,450 $2,200 + 12% of the amount beyond $22,000
$89,451 – $190,750 $10,294 + 22% of the amount beyond $89,450
$190,751 – $364,200 $32,580 + 24% of the amount beyond $190,750
$364,201 –  $462,500 $74,208 + 32% of the amount beyond $364,200
$462,501 – $693,750 $105,664 + 35% of the amount beyond $462,500
$693,751 or more $186,601.50 + 37% of the amount beyond $693,750

For single filers –

Taxable Income  Taxes Owed 
$11,000 or less 10% of the taxable income
$11,001 – $44,725 $1,100 + 12% of the amount beyond $11,000
$44,726 – $95,375 $5,147 + 22% of the amount beyond $44,725
$95,376 – $182,100 $16,290 + 24% of the amount beyond $95,375
$182,101 – $231,250 $37,104 + 32% of the amount beyond $182,100
$231,251 – $578,125 $52,832 + 35% of the amount beyond $231,250
$578,126 or more $174,238.25 + 37% of the amount beyond $578,125