Americans’ tax refunds — and, for that matter, tax bills — this filing season are based on seven tax brackets, which determine where their top tax rate falls.
Tax brackets determine how much you will pay on each portion of your taxable income for the year. They’re not set in stone: Every year, the IRS adjusts the thresholds for its brackets based on an inflation index. These adjustments ensure that Americans do not have to pay higher tax rates simply because their wages have grown along with rising prices.
The IRS also makes inflation adjustments to the standard deduction, which is a fixed amount of income on which you don’t have to pay federal taxes. Most taxpayers take the standard deduction, although there is a fairly small group of people who itemize.
Here’s what you need to know for this year and next.
Tax brackets for 2023
It’s important to remember that because the United States has a graduated fee structure, the maximum fee is not the percentage you pay for all of your income. You pay the maximum rate only for the amount of taxable income you earn above the bracket threshold.
For 2023, the lowest tax rate, 10%, applies to the first $11,000 of taxable income if you are a single filer. At the upper end of the range, individual filers must apply the top rate of 37% for taxable income above $578,125 in 2023.
The standard deduction is $13,850 for single filers and $27,700 for married couples filing jointly.
|
tax rate |
individual custodians |
joint presentation of the spouses |
|---|---|---|
|
10% |
From $0 to $11,000 |
From $0 to $22,000 |
|
12% |
From $11,000 to $44,725 |
From $22,000 to $89,450 |
|
22% |
From $44,725 to $95,375 |
From $89,450 to $190,750 |
|
24% |
From $95,375 to $182,100 |
From $190,750 to $364,200 |
|
32% |
From $182,100 to $231,250 |
From $364,200 to $462,500 |
|
35% |
From $231,250 to $578,125 |
From $462,500 to $693,750 |
|
37% |
$578,125 and up |
$693,750 and up |
Tax brackets for 2024
Earlier this year, you may have noticed that your salary increased slightly due to the IRS’s inflation adjustments for 2024 (those are the taxes you’ll file next spring). Although the tax rates are identical for 2023 and 2024, the IRS increased the income thresholds that determine your income bracket by approximately 5.4% for 2024.
The IRS also increased the standard deduction for 2024 to $14,600 for single filers and $29,200 for married couples filing jointly.
Basically: If your income doesn’t change between 2023 and 2024 — and assuming everything else stays the same — your 2024 tax bill should be lower because of the changes, or your refund should be larger. It is also possible that you will move to a lower range if you were just above a limit.
|
tax rate |
individual custodians |
joint declaration of the spouses |
|---|---|---|
|
10% |
From $0 to $11,600 |
From $0 to $23,200 |
|
12% |
From $11,600 to $47,150 |
From $23,200 to $94,300 |
|
22% |
From $47,150 to $100,525 |
From $94,300 to $201,050 |
|
24% |
From $100,525 to $191,950 |
From $201,050 to $383,900 |
|
32% |
From $191,950 to $243,725 |
From $383,900 to $487,450 |
|
35% |
From $243,725 to $609,350 |
From $487,450 to $731,200 |
|
37% |
$609,350 and up |
$731,200 and up |
More details on tax bracket adjustments are available on the IRS website.
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