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The Federal Income Tax Rates and Brackets for 2023 Are Shown Below

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On Tuesday, the IRS announced the marginal tax rates and brackets for 2023, taking inflation into account. Since less tax will be taken out of paychecks, many workers will have more money left over at the end of the year.

The agency also told the public what the standard deduction would be for the coming year. It will go up by $900 for single taxpayers, to $13,850, and by $1,800 for married couples, to $27,700.

In 2023, heads of household will be able to deduct a standard amount of $20,800. That’s an increase of $1,400. These are the marginal tax rates for the year 2023, based on your tax situation.

Single Filers

– 10%: income of $11,000 or less

– 12%: income between $11,001 and $44,725

– 22%: income between $44,726 and $95,375

– 24%: income between $95,376 and $182,100

– 32%: income between $182,101 and $231,250

– 35% income between $231,251 and $578,125

– 37%: income greater than $578,125

The Federal Income Tax Rates and Brackets for 2023 Are Shown Below

Married Filing Jointly

– 10%: income of $22,000 or less

– 12%: income between $22,001 and $89,450

– 22%: income between $89,451 and $190,750

– 24%: income between $190,751 and $364,200

– 32%: income between $364,201 and $462,500

– 35% income between $462,501 and $693,750

– 37%: income greater than $693,750

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Also, in 2023, parents with three or more eligible children can get the full $7,430 Earned Income Tax Credit. The most you can put into a health care flexible spending account is also going up, from $2,850 to $3,050.

Also, rich Americans will be able to get rid of a lot more assets from the estate tax after 2023. From just over $12 million in 2022, people will be able to give their children and grandchildren up to $12.92 million tax-free. Two people who are married can give twice as much. And the annual exclusion for gifts goes up to $17,000.

The IRS changes dozens of important tax rules every year based on a formula set by Congress. Due to the recent rise in inflation rates, the changes for 2023 are bigger than in years past. This means that, if nothing else changes, employees will start getting more money in their pockets in January.

The agency has not yet said how much you can put into a 401(k) plan or how much money you need to have in a retirement account in 2023. In response to rising prices, the Social Security Administration announced last week that the cost-of-living adjustment would be the highest it has been in decades.

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