Higher federal income tax brackets and standard deductions are now in effect. These measures give Americans a chance to increase their take-home pay in 2023 and shield more of their income from the Internal Revenue Service.
The increase in tax brackets is intended to avoid a phenomenon known as “bracket creep,” which happens when taxpayers are pushed into higher-income brackets even though their purchasing power is essentially unchanged due to steeper prices for most goods.
The IRS makes these adjustments annually, but in times of painfully high inflation, the increases are more significant and impactful for taxpayers. Inflation hovered around a four-decade high for much of 2022, peaking at 9.1% in June and falling slightly to 7.1% in November – still about three times the pre-pandemic average. This year, the tax brackets are shifting higher by about 7%.
New Tax Brackets for Single Individuals
- 10%: Taxable income up to $11,000 or less
- 12%: Taxable income over $11,000
- 22%: Taxable income over $44,725
- 24%: Taxable income over $95,375
- 32%: Taxable income over $182,100
- 35%: Taxable income over $231,250
- 37%: Taxable income over $578,125
New Tax Brackets for Joint Filers
- 10%: Taxable income up to $22,000
- 12%: Taxable income over $22,000
- 22%: Taxable income over $89,450
- 24%: Taxable income over $190,750
- 32%: Taxable income over $364,200
- 35%: Taxable income over $462,500
- 37%: Taxable income over $693,750
If you have question or concerns regarding the new IRS Tax Brackets, please contact the qualified attorneys at Rock Fusco & Connelly.