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In comparison to the 2022 tax brackets, the income thresholds for 2023 have increased generously. The amounts have increased by more than 7% compared with the 3% increase in 2022.
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Federal Income Taxes [Photo: Debt.org]
According to Cruz-Martinez, the head of tax at Betterment financial advisory company, Eric Bronnenkant, says that the purpose of adjusting the tax brackets is to reduce the impact of inflation. This means that taxpayers whose salaries cannot keep up with the inflation can still avoid the tax bracket creep. The Tax Foundation says that tax bracket creep happens when inflation forces a taxpayer into a higher income tax bracket. This incident will reduce a taxpayer’s tax deductions, credits, and exemptions.
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Changes to Federal Tax Brackets in 2023
According to Mengle, there are seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. One’s tax bracket will be determined by their taxable income and status of filing. The tax brackets also show what tax rate will have to be paid on each portion of income.
| Taxable Rate | Bracket for Single Taxpayers | Bracket for Joint Taxpayers |
| 10% | $11,000 or less | $22,000 or less |
| 12% | $11,001 to $44,725 | $22,001 to $89,450 |
| 22% | $44,726 to $95,375 | $89,451 to $190,750 |
| 24% | $95,376 to $182,100 | $190,751 to $364,200 |
| 32% | $182,101 to $231,250 | $364,201 to $462,500 |
| 35% | $231,251 to $578,125 | $462,501 to $693,750 |
| 37% | $578,126 or more | $693,751 or more |
READ ALSO: Free Electronic Filing For State Income Taxes Offered In Oregon
