The tax brackets for Americans will shift upward for tax year 2023, following a series of rule adjustments to account for inflation.
The IRS announced rule adjustments in 2022 for more than 60 tax provisions for tax year 2023, including changes to the standard tax deduction and the designation of tax brackets.
Inflation, which reached a nearly 40-year high of 8.2 percent at the time of the announcement, fueled the particularly drastic changes for this tax season.
Tax brackets specify the tax rate one pays on each portion of their taxable income. As one’s income increases, so does the tax rate.
The 2023 tax year will have seven federal income tax brackets, the same as the past few seasons, according to the IRS, but they will look different.
Here are the tax brackets for single filers for 2023 taxes:
The 12 percent tax bracket, the most common of all tax returns, will now apply to incomes between $11,000 and $44,725. This is a shift of just more than 7 percent, while the previous year saw a shift of 3.2 percent.
The 10 percent tax bracket will apply to incomes between $0 and $11,000.
The 22 percent tax bracket will apply to incomes between $44,726 and $95,375.
The 24 percent tax bracket will apply to those with incomes between $95,375 to $182,100.
The 32 percent tax bracket will be for those with incomes between $182,101 to $231,150.
The 35 percent tax bracket is for incomes between $231,251 and $578,125.
The 37 percent tax bracket applies to incomes between $578,126 and more.
The standard deduction, which lessens the amount on which one is taxed, will increase $1,800 for married couples filing jointly to $27,700. For single taxpayers and married individuals filing separately, the standard deduction rose $900 to $13,850. For heads of households, the standard deduction will rise up $1,400 for tax year 2023 to $20,800.