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By Staff Reporters
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The IRS just released inflation-adjusted marginal rates and brackets for 2023 on Tuesday, and many workers will see higher take-home pay in the new year as less tax is withheld from their paychecks.
Additionally, the agency released the standard deduction for next year. It is increasing by $900 to $13,850 for single taxpayers, and by $1,800 for married couples, to $27,700. For heads of household, the 2023 standard deduction will be $20,800. That’s an increase of $1,400.
Here are the marginal rates for for tax year 2023, depending on your tax status.
Single filers
- 10%: income of $11,000 or less
- 12%: income between $11,000 to $44,725
- 22%: income between $44,725 to $95,375
- 24%: income between $95,375 to $182,100
- 32%: income between $182,100 to $231,250
- 35% income between $231,250 to $578,125
- 37%: income greater than $578,125
Married filing jointly
- 10%: income of $22,000 or less
- 12%: income between $22,000 to $89,450
- 22%: income between $89,450 to $190,750
- 24%: income between $190,750 to $364,200
- 32%: income between $364,200 to $462,500
- 35% income between $462,500 to $693,750
- 37%: income greater than $693,750
Additionally, the maximum Earned Income Tax Credit for 2023 is $7,430 for those who have three or more qualifying children. The maximum contribution to a healthcare flexible spending account is also increasing, from $2,850 to $3,050.
Wealthy Americans will also be able to exclude significantly more assets from the estate tax in 2023. Individuals will be able to transfer up to $12.92 million tax-free to their descendants, up from just over $12 million in 2022. A married couple can pass on double that. And the annual exclusion for gifts increases to $17,000.
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Filed under: "Ask-an-Advisor", Accounting, Financial Planning, Taxation | Tagged: IRS, New Taxation Rates and Brackets, tax, tax brackets, tax rates, taxes | 1 Comment »
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