Will New Tax Brackets for the 2023 Calendar Year Help You?
The IRS updates tax rates annually based on inflation—and with this year’s monthly inflation numbers struggling to dip below seven percent, income tax thresholds are changing fairly dramatically compared to past years. The new IRS Tax Brackets 2023 reflect the substantial changes to prices we have seen in 2022. Luckily, though, these changes will help relieve some of the burden caused by inflation by preventing people from jumping tax brackets based on income increases. Taxpayers who receive income increases that do not keep up with inflation will likely be able to remain in their tax brackets and will not lose out on potential credits, deductions, and exemptions they received in previous years.
The new IRS Tax Brackets 2023 reflect a seven percent increase from the previous year’s rates—roughly the same pace as inflation and double last year’s increase. As always, your tax bracket is determined by your taxable income and filing status. The IRS adjusted the standard deductions for tax year 2023 to $27,700 for Married Filing Joint Filers, $13,850 for Single and Married Filing Separate Filers, and $20,850 for Head of Household Filers. Traditional Tax Brackets are still maintained at 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The new IRS Tax Brackets 2023 are summarized below:
| Marginal Tax Rate | Married | Single | Head of Household | Married Filing Separate |
| 10% | $22,000 and under | $11,000 and under | $15,700 and under | $11,000 and under |
| 12% | $22,001-$89,450 | $11,001-$44,725 | $15,701-$59,850 | $11,001-$44,725 |
| 22% | $89,451-$190,750 | $44,726-$95,375 | $59,851-$95,350 | $44,726-$95375 |
| 24% | $190,751-$364,200 | $95,376-$182,100 | $95,351-$182,100 | $95,376-$182,100 |
| 32% | $364,201-$462,500 | $182,101-$231,250 | $182,101-$231,250 | $182,101-$231,250 |
| 35% | $462,501-$693,750 | $231,251-$578,125 | $231,251-$578,100 | $231,251-$346,875 |
| 37% | Over $693,750 | Over $578,125 | Over $578,100 | Over $346,875 |
New IRS Tax Brackets 2023
These tax rates are progressive marginal rates; each income threshold is taxed at its designate rate, then any excess money is taxed at the next highest rate until all income is accounted for. As such, if you have $100,000 in taxable income as a single taxpayer, you are not taxed at 24% on that entire amount. Instead, for the tax year 2023, the first $11,000 of income will be taxed at the 10% rate, the next dollars up to $44,725 will be taxed at 12%, the next dollars up to $95,375 will be taxed at 22% rate, and the last dollars over $95,375 will be taxed at the rate of 24% until the entire liability is satisfied
Again, the new IRS Tax Brackets 2023 will go into effect for your 2023 tax year. They do not affect any tax liabilities for the 2022 tax year, which need to be satisfied by April 18, 2023 and are subject to previous 2022 rates. An extension until May 15, 2023 has been granted for some California taxpayers in counties affected by recent flooding. RJS Law provides Estate Planning and Tax Planning services which can help individuals and businesses navigate the complexities of both the Internal Revenue Code and local tax laws. Contact us at 619-595-1655 or click here to arrange a free consultation
Written by Joseph Cole, Esq., LL.M. and Zachary K. McDaniel
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