The rest is taxed at lower rates as described above. (We can all dream, right?) If you're single, only your 2023 income over $578,125 is taxed at the top rate (37%). (That's $6,600 less than if a flat 24% rate was applied to the entire $100,000.) When you add it all up based on this example, your estimated total 2023 tax is only about $17,400. 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. 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.Īfter 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. 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 rest of your income is taxed at the 10%, 12%, and 22% rates. That's because using marginal tax rates, only a portion of your income is taxed at the 24% rate. Your tax will actually be less than that amount. 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? Suppose you are single, and end up with $100,000 of taxable income in 2023.

Here are a couple of examples of how federal income tax brackets work. Or if your income doesn't grow at the rate of inflation from one year to the next. 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. 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.' For 2023, the width of the 22% singles bracket grew. (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.)Īn example of this is the 22% bracket for single taxpayers. This shows up when we look at the 'width' of the 2023 brackets and see that they got comparatively wider than before. 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. Married Couples Filing Separately and Head-of-Household Filers: 2022 Income Tax Brackets Tax Rate

Federal tax brackets