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There are seven federal tax brackets for the 2022 and 2023 tax years: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your bracket depends on your taxable income and filing status.
2022 federal income tax brackets
(for taxes due in April 2023)
2023 federal income tax brackets
(for taxes due in April 2024)
Expand the filing status that applies to you.
How tax brackets work
The United States has a progressive tax system, meaning people with higher taxable incomes pay higher federal income tax rates.
Being "in" a tax bracket doesn't mean you pay that federal income tax rate on everything you make. The progressive tax system means that people with higher taxable incomes are subject to higher federal income tax rates, and people with lower taxable incomes are subject to lower federal income tax rates.
The government decides how much tax you owe by dividing your taxable income into chunks — also known as tax brackets — and each chunk gets taxed at the corresponding tax rate. The beauty of this is that no matter which bracket you’re in, you won’t pay that tax rate on your entire income.
The percentage of your taxable income that you pay in taxes is called your effective tax rate. To determine effective tax rate, divide your total tax owed (line 16) on Form 1040 by your total taxable income (line 15).
Income thresholds for tax brackets are updated annually. Several provisions in the tax code, including the income thresholds that inform the federal tax brackets, are adjusted annually to reflect the rate of inflation. This indexing aims to prevent taxpayers from experiencing "bracket creep," or the process of being pushed into a higher tax bracket because of inflation.
Example #1: Let’s say you’re a single filer with $32,000 in taxable income. That puts you in the 12% tax bracket in 2022. But do you pay 12% on all $32,000? No. Actually, you pay only 10% on the first $10,275; you pay 12% on the rest. (Look at the tax brackets above to see the breakout.)
Example #2: If you had $50,000 of taxable income, you’d pay 10% on that first $10,275 and 12% on the chunk of income between $10,276 and $41,775. And then you’d pay 22% on the rest because some of your $50,000 of taxable income falls into the 22% tax bracket. The total bill would be about $6,600 — about 13% of your taxable income, even though you're in the 22% bracket. That 13% is your effective tax rate.
That's the deal only for federal income taxes. Your state might have different brackets, a flat income tax or no income tax at all.
» Learn more: See state income tax brackets here
What is a marginal tax rate?
The term "marginal tax rate" refers to the tax rate paid on your last dollar of taxable income. This typically equates to your highest tax bracket.
For example, if you're a single filer with $35,000 of taxable income, you would be in the 12% tax bracket. If your taxable income went up by $1, you would pay 12% on that extra dollar too.
If you had $46,000 of taxable income, however, most of it would still fall within the 12% bracket, but the last few hundred dollars would land in the 22% tax bracket. Your marginal tax rate would then be 22%.
How to get into a lower tax bracket and pay a lower federal income tax rate
Two common ways of reducing your tax bill are credits and deductions.
Tax credits can reduce your tax bill on a dollar-for-dollar basis; they don't affect what bracket you're in.
Tax deductions, on the other hand, reduce how much of your income is subject to taxes. Generally, deductions lower your taxable income by the percentage of your highest federal income tax bracket. So if you fall into the 22% tax bracket, a $1,000 deduction could save you $220.
In other words: Take all the tax deductions you can claim — they can reduce your taxable income and could kick you to a lower bracket, which means you pay a lower tax rate.
More tax stories
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Past years' tax brackets
Curious how federal income tax brackets and rates have changed over the years? Take a look back.