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The federal tax code is a complex, changing set of rules — but one of the most important annual changes are the yearly adjustments to income-tax brackets.
How much is a person’s taxable income actually getting taxed? That’s what is shown by the seven income tax brackets, and the seven escalating tax rates.
The seven tax rates are 10%, 12%, 22%, 24%, 32%, 35% and 37%. Due to tax laws passed in 20217, these are the rates that apply through 2025.
Meanwhile, the IRS adjusts income brackets every year.
When it comes to taxes, you might hear about falling into a particular bracket. But the reality is many people are falling into multiple brackets. As a person’s income increases, more segments of their income are taxed at increasingly higher rates.
What are the brackets for 2022?
The income-tax brackets vary depending on filing status. For tax year 2022, here are the brackets for single filers.
| Single | Taxable income | The tax is: |
| 10% | $0 to $10,275 | 10% of the taxable income |
| 12% | $10,276 to $41,775 | $1,027.50 plus 12% above $10,275 |
| 22% | $41,776 to $89,075 | $4,807.50 plus 22% above $41,775 |
| 24% | $89,076 to $170,050 | $15,213.50 plus 24% above $89,075 |
| 32% | $170,051 to $215,950 | $34,647.50 plus 32% above $170,050 |
| 35% | $215,951 to $539,900 | $49,335.50 plus 35% above $215,950 |
| 37% | $539,901 and above | $162,718 plus 37% above $539,900 |
For married couples filing jointly, here’s the 2022 income tax brackets:
| Married filing jointly | Taxable income | The tax is: |
| 10% | $0 to $20,550 | 10% of the taxable income |
| 12% | $20,551 to $83,550 | $2,055 plus 12% above $20,550 |
| 22% | $83,551 to $178,150 | $9,615 plus 22% above $83,550 |
| 24% | $178,151 to $340,100 | $30,427 plus 24% above $178,150 |
| 32% | $340,101 to $431,900 | $69,295 plus 32% above $340,100 |
| 35% | $431,901 to $647,850 | $98,671 plus 35% above $431,900 |
| 37% | $647,851 and above | $174,253.50 plus 37% above $647,850 |
For heads of household, here are the 2022 income tax brackets:
| Head of household | Taxable income | The tax is: |
| 10% | $0 to $14,650 | 10% of the taxable income |
| 12% | $14,651 to $55,900 | $1,465 plus 12% above $14,650 |
| 22% | $55,901 to $89,050 | $6,415 plus 22% above $55,900 |
| 24% | $89,051 to $170,050 | $13,708 plus 24% above $89,050 |
| 32% | $170,051 to $215,950 | $33,148 plus 32% above $170,050 |
| 35% | $215,951 to $539,900 | $47,836 plus 35% above $215,950 |
| 37% | $539,901 and above | $161,218.50 plus 37% above $539,900 |
What are the brackets for 2023?
Due to annual adjustments, there are increases in store for the 2023 brackets — a roughly 7% increase year-over-year. Here’s the information for single filers:
| Single | Taxable income | The tax is: |
| 10% | $0 to $11,000 | 10% of the taxable income |
| 12% | $11,001 to $44,725 | $1,100 plus 12% above $11,000 |
| 22% | $44,726 to $95,375 | $5,147 plus 22% above $44,725 |
| 24% | $95,376 to $182,100 | $16,290 plus 24% above $95,375 |
| 32% | $182,101 to $231,250 | $37,104 plus 32% above $182,100 |
| 35% | $231,251 to $578,125 | $52,832 plus 35% above $231,250 |
| 37% | $578,126 and above | $174,238.25 plus 37% above $578,125 |
For married couples filing jointly, here’s the brackets for tax year 2023:
| Married filing jointly | Taxable income | The tax is: |
| 10% | $0 to $22,000 | 10% of the taxable income |
| 12% | $22,001 to $89,450 | $2,200 plus 12% above $22,000 |
| 22% | $89,451 to $190,750 | $10,294 plus 22% above $89,450 |
| 24% | $190,751 to $364,200 | $32,580 plus 24% above $190,750 |
| 32% | $364,201 to $462,500 | $74,208 plus 32% above $364,200 |
| 35% | $462,501 to $693,750 | $105,664 plus 35% above $462,500 |
| 37% | $693,751 and above | $186,601.50 plus 37% above $693,750 |
For people filing as head of household, here’s the brackets for tax year 2023:
| Head of household | Taxable income | The tax is: |
| 10% | $0 to $15,700 | 10% of the taxable income |
| 12% | $15,701 to $59,850 | $1,570 plus 12% above $15,700 |
| 22% | $59,851 to $95,350 | $6,868 plus 22% above $59,850 |
| 24% | $95,351 to $182,100 | $14,678 plus 24% above $95,350 |
| 32% | $182,101 to $231,250 | $35,498 plus 32% above $182,100 |
| 35% | $231,251 to $578,100 | $51,226 plus 35% above $231,250 |
| 37% | $578,101 and above | $172,623.50 plus 37% above $578,100 |
Why do brackets change?
It’s done to ease the tax bite of inflation and avoid what’s called “bracket creep.” Without upward adjustments, higher wages to cope with higher prices would hit more costly tax rates sooner.
Yearly bracket adjustments started in the 1980s, but were on sharp display in the adjustments to the 2023 income-tax brackets as hot inflation burned through Americans’ wallets. From 2022 to 2023, the income tax brackets increased by roughly 7%.
Other tax-code provisions are updated annually to account for inflation, including the commonly used standard deduction.
Do the brackets show my final tax bill?
No. Along with the tax brackets, the income also goes through a wringer of deductions and credits before arriving at the final tax bill.
The beginning point is adjusted gross income. That’s total income — from wages, dividends, capital gains, business income and other sources — after adjustments. Some income adjustments include unreimbursed educator expenses, student-loan interest, alimony and contributions to retirement accounts, the IRS notes.
Then comes the standard deduction or itemized deduction, and that amount gets applied to the income tax brackets, as the Tax Foundation explains. From there, credits like the child tax credit are applied and that brings the amount to the final tax liability.
This post was originally published on Market Watch
