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Even though we’re still in the 2022 tax year, and you filed your 2021 tax returns back in April, you’re probably thinking to yourself, “Gosh! I wonder what the tax brackets are for the 2023 tax year?”
We’ve got you covered — and there’s actually some good news, thanks to inflation. The Internal Revenue Service (IRS) adjusts tax brackets for inflation each year, and because inflation is so high, it’s possible you could fall to a lower bracket for the income you earn in 2023. Your standard deduction — the amount you can use as a deduction without itemizing — will also be higher.
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If you start now, you can make plans to reduce your 2023 tax bill. Knowing the tax brackets for 2023 can help you implement smart tax strategies, like adjusting your income tax withholding, so you don’t get caught with a big tax bill next year.
How the brackets work
In the U.S. tax system, income tax rates are graduated, so you pay different rates on different amounts of taxable income. There are seven of these tax brackets in all. The more you make, the more you pay.
Importantly, your highest tax bracket doesn’t reflect how much you pay in federal income taxes. If you’re a single filer in the 22 percent tax bracket for 2023, you won’t pay 22 percent on all your taxable income. You will pay 10 percent on taxable income up to $11,000, 12 percent on the amount from $11,000 to $44,725, and 22 percent above that (up to $95,375).