Tax brackets are the income ranges taxpayers fall into, outlining what you can expect to pay in taxes on your taxable income each year.
The higher your taxable income, the progressively higher your federal income tax rate will be. There are also different tax brackets depending on your filing status.
Understanding your tax bracket can help you figure out what you could owe and plan ahead for tax season.
How do tax brackets work?
The United State’s progressive tax system means that the higher your taxable income, the more you will pay in taxes. As you move up the tax bracket, the tax rate also increases.1 In other words, the less you make, the lower your federal income tax rate will be, and vice versa.
Note: your total taxable income isn’t all taxed at your income tax bracket rate. You’ll only pay the specified tax rate for income within that bracket.
More specifically, your taxable income is divided into tax brackets, and each chunk of it is taxed at the appropriate tax rate.
The good news about this system is that your entire income won’t fall into one tax bracket, and you won’t pay more in taxes on all of your income simply because you fall into a higher bracket.
The overall percentage you’ll pay is your effective tax rate. You can calculate this percentage by dividing the tax you owe by your taxable income.
What are the 2023-2024 income tax brackets?
Each year, the Internal Revenue Service (IRS) updates income thresholds that make up the federal tax brackets.
These are the 2023 federal income tax brackets² for taxes due in April 2024, based on your filing status:
Filing Single or Married Filing Separately
You’d fall under this filing status if you’re legally separated from your spouse or unmarried by the end of the calendar year. You can also choose to file separately if you’re married but want to be solely responsible for your tax return.
| Income | Marginal Tax Rate |
|---|---|
| Up to $11,000 | 10% |
| $11,001 to $44,725 | 12% |
| $44,726 to $95,375 | 22% |
| $95,376 to $182,100 | 24% |
| $182,101 to $231,250 | 32% |
| $231,251 to $578,125 | 35% |
| $578,126 or more | 37% |
Married Filing Jointly
This status is for married couples and want to report their combined income and qualifying deductions together.
| Income | Marginal Tax Rate |
|---|---|
| Up to $22,000 | 10% |
| $22,001 to $89,450 | 12% |
| $89,451 to $190,750 | 22% |
| $190,751 to $364,200 | 24% |
| $364,201 to $462,500 | 32% |
| $462,501 to $693,750 | 35% |
| $693,751 or more | 37% |
Head of Household
The head of household filing status is for someone who is unmarried by the end of year and cares for a dependent who lives with you more than half the year. You also paid more than half the costs to maintain the home for the tax year.
| Income | Marginal Tax Rate |
|---|---|
| Up to $15,700 | 10% |
| $15,701 to $59,850 | 12% |
| $59,851 to $95,350 | 22% |
| $95,351 to $182,100 | 24% |
| $182,101 to $231,250 | 32% |
| $231,251 to $578,100 | 35% |
| $578,101 or more | 37% |
Remember, the above information is only for federal income tax brackets.
Your state’s tax brackets calculate your state taxes. Your state may have different brackets, a flat rate for all income levels, or no state taxes at all.
Why do tax brackets change each year?
Tax brackets are adjusted annually to account for inflation. That means the income thresholds may go higher each subsequent tax year. The point is to help taxpayers from being pushed into a higher tax bracket unnecessarily.
How to get into a lower tax bracket
You can use both tax deductions or write-offs and tax credits to help you fall into a lower tax bracket. Doing so may reduce your tax bill.
Depending on how you file your taxes, you may qualify for tax deductions for charitable donations, teacher educational expenses, and contributions to your health savings account (HSA). You may qualify for tax credits like the Child Tax Credit and residential energy credits.
How to calculate your tax bracket
To calculate your tax, you’ll divide your taxable income into chunks that fall within the appropriate tax brackets. Then you’ll use the tax rate for each to calculate what you owe.
For example, let’s say you’re filing your taxes as a single person and your taxable income in 2022 is $45,000. Your marginal tax bracket – the tax bucket for the highest part of your income – is 22%. There are two tax buckets below this amount, meaning part of your income will be taxed in the lower tax brackets at 10% and 12%.
Here’s how much tax you would pay in each bracket:
- $11,000 if your income will be taxed at 10%, which equals $1,100.00
- Your next $33,725 will be taxed at 12%, equalling $4,047
- The final amount (just $75) will be taxed at 22% which equals to $16.50
Add the total amount from each tax bracket, and you’ll end up owing $5,163.50 in taxes. This number doesn’t factor in changes from standardized or itemized deductions or any tax credits you might apply.
FAQs
How do I know what tax bracket I am in?
Head to this IRS link or read the tables above to match your taxable income with your tax bracket.
What are 2023 income tax brackets?
The 2022 income tax brackets depend on your filing status:
| Tax Rate | Income (Single) | Income (Married Filing Jointly) | Income (Head of Household) |
|---|---|---|---|
| 10% | Up to $$11,000 | Up to $22,000 | Up to $15,700 |
| 12% | $11,001 to $44,725 | $22,001 to $89,450 | $15,701 to $59,850 |
| 22% | $44,726 to $95,375 | $89,451 to $190,750 | $59,851 to $95,350 |
| 24% | $95,376 to $182,100 | $190,751 to $364,200 | $95,351 to $182,100 |
| 32% | $182,101 to $231,250 | $364,201 to $462,500 | $182,101 to $231,250 |
| 35% | $231,251 to $578,125 | $462,501 to $693,750 | $231,251 to $578,100 |
| 37% | $578,126 or more | $693,751 or more | $578,101 or more |
Tax brackets may be different for state taxes.
How much do I pay in taxes if I make 75k a year?
If you file taxes as a single person and make $75,000 a year, you’ll pay $11,763.50 in federal income taxes. Looking at the 2023 income tax brackets, your marginal tax rate (your highest tax bracket) is 22%. Your total amount could be higher if you live in a state with state income taxes.
Understand tax brackets to take control of your tax bill
You may end up paying more in taxes with a higher income. However, the tax bracket system means you’ll pay the same as everyone else on the lower end of your income spectrum.
Plus, you can take advantage of possible deductions or write-offs to help lower your taxable income and reduce the amount you’ll owe in taxes.
You can also see what tax credits you qualify for — you may be able to receive a tax refund after applying credits and deductions. Paying less in taxes can help free up cash to use towards other financial goals, like saving for your next car or taking your family on a well-deserved vacation.
Once you’ve filed your taxes, find out how long it will take to receive your tax refund.