Tax season is just around the corner, and it's never too early to start thinking about your taxes. Whether you're self-employed or work for a company, it's important to know your tax bracket and how much you'll owe come tax time. Here are the federal income tax brackets for tax years 2022 and 2023, plus tips on how you can estimate your taxes based on your top income.
In an effort to adjust for inflation, the IRS announced new tax brackets for the 2023 tax year. The top tax rate remains at 37%, but the income thresholds for each bracket have increased slightly. For tax year 2022, the income thresholds and tax rates remain the same as they were for 2021.
There are seven tax brackets for most ordinary income for the 2022 tax year: 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent. The income ranges for each bracket are as follows:
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The 10% bracket applies to taxable income up to $10,275 for single filers, $20,550 for married filing jointly, and $13,050 for head of household.
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The 12% bracket applies to taxable income up to $41,775 for single filers, $83,550 for married filing jointly, and $55,900 for head of household.
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The 22% bracket applies to taxable income up to $91,450 for single filers, $183,000 for married filing jointly, and $119,950 for head of household.
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The 24% bracket applies to taxable income up to $190,200 for single filers, $379,150 for married filing jointly, and $216,700 for head of household.
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The 32% bracket applies to taxable income up to $423,350 for single filers, $452,950 for married filing jointly, and $423,350 for head of household.
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The 35% bracket applies to taxable income up to $10,000,000 for all filing statuses.
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The 37% bracket applies to taxable income over $10,000,000 for all filing statuses.
You may not be looking forward to tax season, but filing your taxes doesn't have to be difficult. Here's everything you need to know to get started:
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Find out your tax bracket: Knowing your tax bracket can help keep as many dollars as possible in the lower brackets by reducing your taxable income.
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Gather your documents: You'll need all of your income statements, such as W-2s and 1099s, as well as receipts and other proof of deductions.
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Choose your filing status: You can file as single, married filing jointly, married filing separately, head of household, or qualifying widow(er) with dependent child.
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Use tax software or a tax professional: You can use tax software to file your taxes online, or you can hire a tax professional to help you file your taxes.
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File your taxes on time: The deadline to file your taxes is April 15th, but you can file for an extension if you need more time.
When filing your taxes for 2020, use these tax brackets to figure out how much you owe. These are the federal income tax rates and standard deductions for the 2020 tax year:
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10%: $0 to $9,875 for single filers, $0 to $19,750 for married filing jointly
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12%: $9,875 to $40,125 for single filers, $19,750 to $80,250 for married filing jointly
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22%: $40,125 to $85,525 for single filers, $80,250 to $171,050 for married filing jointly
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24%: $85,525 to $163,300 for single filers, $171,050 to $326,600 for married filing jointly
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32%: $163,300 to $207,350 for single filers, $326,600 to $414,700 for married filing jointly
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35%: $207,350 to $518,400 for single filers, $414,700 to $622,050 for married filing jointly
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37%: Over $518,400 for single filers, over $622,050 for married filing jointly
Knowing your tax bracket is just the first step in preparing for tax season. You'll also need to gather your documents, choose your filing status, and file your taxes on time. Whether you use tax software or a tax professional, make sure you're prepared to file your taxes accurately and on time.
