2023 Tax Brackets and Federal Income Tax Rates: What to Know

With federal tax brackets and rates, the tax rates themselves aren't changing. The same seven tax rates in effect for the 2022 tax year – 10%, 12%, 22%, 24%, 32%, 35%, and 37% – still apply for 2023. However, the income tax brackets for each year are different (i.e., new beginning and ending dollar amounts are established for each bracket). 

That's because tax brackets are adjusted each year to account for inflation. As a result, you could end up in different tax brackets from year to year. That also means that you could pay a different tax rate on some of your income from 2023 than you did last year.

Tax brackets based on filing status

Tax bracket ranges also differ depending on your filing status. For example, for 2023, the 22% tax bracket range for singles is from $44,726 to $95,375, while the same rate applies to head-of-household filers with taxable income from $59,851 to $95,350. Last year, for single filers, the 22% tax bracket started at $41,776 and ended at $89,075. However, for head-of-household filers, last year's bracket went from $55,901 to $89,050.

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So, filing status is something to keep in mind when you are filing a return or planning to reduce a future tax bill.

2023 tax brackets and rates

Here are the 2023 federal income tax brackets and rates for the four most common filing statuses.

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2022 income tax brackets and rates

If you haven't yet filed your 2022 tax return or just want to compare for 2023 tax planning, here are the former tax brackets and rates based on your filing status:

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2023 tax brackets and inflation

Since inflation has been high over the past year or so, the impact of inflation adjustment on tax brackets was greater this year than what most of us are used to. 

This shows up when we look at the "width" of the 2023 brackets and see that they got comparatively wider than before. (Width is the amount of income taxed at the applicable rate – or in other words, the difference between the bracket's lowest dollar amount, and its highest dollar amount.)

An example of this is the 22% bracket for single taxpayers.  For 2023, the width of the 22% singles bracket grew. The 2023 bracket covers $50,649 of taxable income ($95,375 – $44,726 = $50,649), which is $3,350 wider than for 2022. 

For last year, the 22% bracket for singles went from $41,776 to $89,075 and covered $47,299 of taxable income ($89,075 – $41,776 = $47,299). So, for the 2022 tax year, the 22% bracket for single filers got $1,450 wider (i.e., $47,299 – $45,849 = $1,450).

But that's okay. Wider tax brackets are a good thing because they help to prevent "bracket creep." According to the Tax Foundation, "Bracket creep occurs when people are pushed into higher income tax brackets or have reduced value from credits and deductions due to inflation, instead of any increase in real income."

So, when a tax bracket gets wider, there's less of a chance that you will end up in a higher tax bracket if your income stays the same. Or if your income doesn't grow at the rate of inflation from one year to the next.

How income tax brackets work

Here are a couple of examples of how federal income tax brackets work. Suppose you are single, and end up with $100,000 of taxable income in 2023. Since $100,000 is in the 24% bracket for single filers, will your 2023 tax bill simply be a flat 24% of $100,000, i.e., $24,000? 

The answer is No. Your tax will actually be less than that amount. That's because using marginal tax rates, only a portion of your income is taxed at the 24% rate. The rest of your income is taxed at the 10%, 12%, and 22% rates.

Here's how it works. Again, assuming you're single with $100,000 taxable income in 2023, the first $11,000 of your income is taxed at the 10% rate for $1,100 of tax. The next $33,724 of income (the amount from $11,001 to $44,725) is taxed at the 12% rate for an approximate $4,047 of additional tax. 

After that, the next $50,649 of your income (from $44,726 to $95,375) is taxed at the 22% rate for an approximate $11,143 of tax. That leaves only $4,627 of your taxable income (the amount over $95,373) that is taxed at the 24% rate, which comes to an approximate $1,110 of additional tax. 

When you add it all up based on this example, your estimated total 2023 tax is only about $17,400. (That's $6,600 less than if a flat 24% rate was applied to the entire $100,000.)

Now, suppose you're a millionaire. (We can all dream, right?) If you're single, only your 2023 income over $578,125 is taxed at the top rate (37%). The rest is taxed at lower rates as described above. 

So, for example, the tax on $1 million for a single person in 2023 is an estimated $328,163. That's a lot of money, but it's still almost $42,000 less than if the 37% rate were applied as a flat rate on the entire $1 million (which would result in a $370,000 tax bill).