What Are the Tax Brackets for 2023? (2024)

You can start filing your 2023 tax returns Jan. 29, 2024 and have untiltax day 2024—April 15, in most states—to submit them to the Internal Revenue Service. To ensure you’re prepared, there are a handful of numbers you’ll want to get familiar with, includingyour2023 income tax brackets.

The U.S. taxes income at progressively higher rates as you earn more. Those tax rates—ranging from 10% to 37%—haven’t changed since 2017. What changes annually, in response to inflation, is the amount of income that gets taxed at each rate.

The upshot: Many households could see a smaller tax bill when they file in 2024. Taxpayers don’t have to take any special steps to take advantage of the new tax brackets, which will apply automatically when you do your taxes. And there are other inflation-related updates you can also take advantage of, such as increases to standard deductions (more on that below).

What are the tax brackets for 2023?

Each year, the Internal Revenue Service adjusts income tax brackets, according to a formula set by Congress. For taxes on 2023 income, high inflation prompted the IRS to raise thresholds 7% for income tax brackets, an unusually large percentage. (The IRS has also released tax bracket changes for 2024, which you’ll use to file in 2025.)

As a result, for tax year 2023, an unmarried filer with taxable income of $95,000 will have a top rate of 22%, down from 24% for the same amount of income in 2022. That shakes out to tax savings of $429.

• The first $11,000 of income will be taxed at 10%
• The next $33,725 will be taxed at 12%
• The last $50,275 will be taxed at 22%.

That works out to a tax bill of $16,207 for 2023, compared with $16,636 for 2022.

Here’s where the income thresholds fall for the taxes you’ll file in 2024 if you are single:

And if you are married and file a joint return:

What is the standard deduction for 2023?

All tax filers can choose to take the standard deduction or itemize deductions. This reduces the amount of their income that’s taxable for the year. The bulk of filers claim the standard deduction, in part because it’s easier—it doesn’t require tallying up select expenses such as charitable donations, major medical bills and state and local taxes.

Like the income tax brackets, the standard deduction gets an annual adjustment for inflation. Standard deductions for all filing statuses also got a 7% boost from 2022 to 2023, the biggest automatic inflation adjustment in history.

The increase to the standard deduction could mean you no longer need to itemize deductions when you file your taxes, potentially saving you hours of paperwork.

Here’s the standard deduction amount for each filing status:

What are the AMT thresholds for 2023?

If you are a high earner you may owe tax regardless of the deductions and other benefits you claim. That is because of the alternative minimum tax, which is designed to create a base tax rate for all earners. Both the AMT exemption and the income level at which that exemption begins to phase out were adjusted for 2023.

Here’s where the AMT thresholds fall for the coming year. If you are single:

And if you are married and file a joint return:

What is the maximum earned-income tax credit for 2023?

The IRS also raised the maximum taxpayers can claim through the earned-income tax credit to $7,430 from $6,935.

This tax credit, commonly known as the EITC, is designed to provide extra help to low- and middle-income working parents. It is also possible to qualify for the EITC without children.

Other tax changes

• The monthly limit for the qualified transportation and parking benefits increases to $300 from $280.
• The maximum you can contribute to a healthcare flexible-spending account rises to $3,050 from $2,850, and the rollover maximum increases to $610 from $570. Check out our guide for tips on how to spend your FSA.
• The annual gift tax exclusion rises to $17,000 from $16,000
• The estate tax exclusion climbs to $12.92 million from $12.06 million.
• Taxes are due Monday, April 15, 2024, except in Maine and Massachusetts, where taxpayers have until April 17. If you file an extension, youstill need to pay buthave until Oct. 15, 2024to file your return.

Got a money question? Let Buy Side find the answer. Email [emailprotected].

Include your full name and location, and we may publish your response.