2023 Tax Brackets and Other Tax Changes
Updated: Oct 25, 2022
The IRS has announced its inflation adjustments for your 2023 taxes.
The Internal Revenue Service (IRS) updates tax rates, allowances, and thresholds every year. These figures are applicable to the tax law provisions that are adjusted annually for inflation. The top tax rate will continue to be 37% for returns filed by individual taxpayers for 2022 tax years, but the standard deduction, tax bracket ranges, other deductions, and phase-outs will increase.
KEY TAKEAWAYS
The IRS updates tax rates, allowances, and thresholds every year by adjusting them for inflation.
You can claim a standard deduction to reduce your taxable income as well as an additional deduction if you are over 65 and/or blind.
Tax brackets range between 10% and 37%.
There are a number of different individual tax credits, including the earned income credit and qualified adoption expenses.
Retirement contributions have limits and can help you reduce your taxable income.
Standard Deduction
The standard deduction is a specific figure that taxpayers can use to reduce their taxable income when they file their annual tax returns.
2022 Standard Deductions
The deduction set by the IRS for 2022 is:
$12,950 for single filers
$12,950 for married couples filing separately
$19,400 for heads of households
$25,900 for married couples filing jointly
$25,900 for surviving spouses
The additional standard deduction amount for an individual who is aged or blind is set at $1,400. That amount increases to $1,750 for individuals who are unmarried and if they aren't surviving spouses. The standard deduction for claiming a dependent is $1,150 or $400 plus the individual’s earned income (as long as it's not over $12,950)—whichever is greater.4
2023 Standard Deductions
The deduction set by the IRS for 2022 is:
$13,850 for single filers ($900.00 increase from 2022)
$13,850 for married couples filing separately ($900.00 increase from 2022)
$20,800 for heads of households ($1400.00 increase from 2022)
$27,700 for married couples filing jointly ($1800 increase from 2022)
Marginal Rates: For tax year 2023, the top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for married couples filing jointly).
The other rates are:
35% for incomes over $231,250 ($462,500 for married couples filing jointly);
32% for incomes over $182,100 ($364,200 for married couples filing jointly);
24% for incomes over $95,375 ($190,750 for married couples filing jointly);
22% for incomes over $44,725 ($89,450 for married couples filing jointly);
12% for incomes over $11,000 ($22,000 for married couples filing jointly).
The lowest rate is 10% for incomes of single individuals with incomes of $11,000 or less ($22,000 for married couples filing jointly).