What are the 2023 Tax Brackets?
The Internal Revenue Service made inflationary adjustments on Oct. 18, and part of these adjustments included higher tax brackets for 2023, as well as an increase to the standard deduction by about 7 percent, the largest increase since the tax system was first indexed to inflation in 1985.
To keep pace with changes in the current economy, the automatic adjustments are intended to help American taxpayers with their paychecks by shielding them from higher taxes. This means a majority of working taxpayers can expect to see less tax withheld from their paychecks beginning in January 2023.
2023 Standard Deduction Update
The standard deduction will increase to $13,850 for single filers and to $27,700 for married couples filing jointly. Regarding marginal rates, the top tax rate stays at 37 percent for single filers whose income is greater than $578,125, or $693,750 for married couples filing jointly. Other rates include the following:
- 35 percent for incomes over $231,250 ($462,500 for married couples filing jointly)
- 32 percent for incomes over $182,100 ($364,200 for married couples filing jointly)
- 24 percent for incomes over $95,375 ($190,750 for married couples filing jointly)
- 22 percent for incomes over $44,725 ($89,450 for married couples filing jointly)
- 12 percent for incomes over $11,000 ($22,000 for married couples filing jointly)[1]
To learn more about how the adjusted tax brackets impact your tax situation, contact your Windham Brannon advisor, or reach out to Gary Gruner.
[1] IRS provides tax inflation adjustments for tax year 2023. IRS.gov. Oct. 18, 2022.
