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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 |
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No excuses not to save for retirement
The IRS increased the amount you can put in your 401(k) for 2023 by a record 9.8% because of inflation. That means you can squirrel away an extra $2,000 next year, if you’re throwing in the maximum amount. It’s the biggest jump ever in terms of both percentage and dollar amount, according to the WSJ. The agency also boosted limits for IRAs, if that’s your thing, as well as a smattering of other types of accounts.
Norman
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