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Key Takeaways
- New income thresholds are in effect for 2023 and 2024 tax brackets.
- Your effective tax rate is the total amount of tax you pay divided by your taxable income.
- Deductions lower your taxable income, while credits decrease your taxes dollar for dollar.
Note: The deadline to file your 2023 tax return was Monday, April 15, 2024.
Understanding your tax bracket and rate is essential regardless of your income level. Both play a major part in determining your final tax bill.
The IRS has announced its 2024 inflation adjustments. And while U.S. income tax rates will remain the same during the next two tax years, the tax brackets—the buckets of income that are taxed at progressively higher rates—will change.
To help you figure out how much you can expect to pay, here are the tax brackets for both the 2023 and 2024 tax years. You will also find guidelines for calculating your income tax based on the top bracket that applies to you.
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2023 Tax Brackets (Taxes Due in April 2024)
The 2023 tax year—meaning the return you’ll file in 2024—will have the same seven federal income tax brackets as the last few seasons: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your filing status and taxable income, including wages, will determine the bracket you’re in.
| Tax Rate | Single | Married filing separately | Head of household | Married filing jointly |
|---|---|---|---|---|
10% | Not over $11,000 | Not over $11,000 | Not over $15,700 | Not over $22,000 |
12% | Over $11,000 but not over $44,725 | Over $11,000 but not over $44,725 | Over $15,700 but not over $59,850 | Over $22,000 but not over $89,450 |
22% | Over $44,725 but not over $95,375 | Over $44,725 but not over $95,375 | Over $59,850 but not over $95,350 | Over $89,450 but not over $190,750 |
24% | Over $95,375 but not over $182,100 | Over $95,375 but not over $182,100 | Over $95,350 but not over $182,100 | Over $190,750 but not over $364,200 |
32% | Over $182,100 but not over $231,250 | Over $182,100 but not over $231,250 | Over $182,100 but not over $231,250 | Over $364,200 but not over $462,500 |
35% | Over $231,250 but not over $578,125 | Over $231,250 but not over $346,875 | Over $231,250 but not over $578,100 | Over $462,500 but not over $693,750 |
37% | Over $578,125 | Over $346,875 | Over $578,100 | Over $693,750 |
2023 Tax Brackets: Single Filer
2023 Tax Brackets: Married Filing Separately
2023 Tax Brackets: Married Filing Jointly
2023 Tax Brackets: Head of Household
2024 Tax Brackets (Taxes Due in April 2025)
The 2024 tax year, and the return due in 2025, will continue with these seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your filing status and taxable income, including wages, will dictate the bracket you’re in.
| Tax Rate | Single | Married filing separately | Head of household | Married filing jointly |
|---|---|---|---|---|
10% | Not over $11,600 | Not over $11,600 | Not over $16,550 | Not over $23,200 |
12% | Over $11,600 but not over $47,150 | Over $11,600 but not over $47,150 | Over $16,550 but not over $63,100 | Over $23,200 but not over $94,300 |
22% | Over $47,150 but not over $100,525 | Over $47,150 but not over $100,525 | Over $63,100 but not over $100,500 | Over $94,300 but not over $201,050 |
24% | Over $100,525 but not over $191,950 | Over $100,525 but not over $191,950 | Over $100,500 but not over $191,950 | Over $201,050 but not over $383,900 |
32% | Over $191,950 but not over $243,725 | Over $191,950 but not over $243,725 | Over $191,950 but not over $243,700 | Over $383,900 but not over $487,450 |
35% | Over $243,725 but not over $609,350 | Over $243,725 but not over $365,600 | Over $243,700 but not over $609,350 | Over $487,450 but not over $731,200 |
37% | Over $609,350 | Over $365,600 | Over $609,350 | Over $731,200 |
2024 Tax Brackets: Single Filer
2024 Tax Brackets: Married Filing Separately
2024 Tax Brackets: Married Filing Jointly
2024 Tax Brackets: Head of Household
Related: Income Tax Calculator
What Are Tax Brackets?
Tax brackets were created by the IRS to implement America’s “progressive” tax system, which taxes higher levels of income at the progressively higher rates we mentioned earlier. The brackets help determine how much money you need to pay the IRS annually.
The amount you pay in taxes is dependent on your income. If your taxable income increases, the taxes you pay will increase.
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How Do Tax Brackets Work?
Figuring out your tax obligation isn’t as easy as comparing your salary to the brackets shown above.Let’s say you’re single and your 2024 taxable income is $75,000; your marginal—or top—tax rate is 22%. But some of your income will be taxed in lower tax brackets: 10% and 12%.
As your income moves up the ladder, slices of it are taxed at increasing rates:
- The first $11,600 is taxed at 10%: $1,160
- The next $35,550 ($47,150 minus $11,600) is taxed at 12%: $4,266
- The last $27,850 ($75,000 minus $47,150) is taxed at 22%: $6,127
The total tax amount for your $75,000 income is the sum of $1,160 + $4,266 + $6,127 = $11,553 (ignoring any itemized or standard deduction applied to your taxes).
How To Calculate Your Federal Income Tax Bracket
You can calculate your taxes by dividing your income into the portions that will be taxed in each applicable bracket. Every bracket has its own tax rate. The bracket you’re in depends on your filing status: single, married filing jointly, married filing separately or head of household.
What Is a Marginal Tax Rate?
The tax bracket your top dollar of income reaches is your marginal tax bracket. This bracket is your highest tax rate, which applies to the top portion of your income. Use our federal income tax bracket calculator below to find your marginal tax percentage.
What Is an Effective Tax Rate?
While your marginal tax rate refers to your highest tax bracket, your effective tax rate is the average amount of taxes you’ll pay overall. To find your effective tax rate, you’ll need to divide the total dollar amount of tax you pay by your taxable income.
For example, let’s say you’re single, and for 2024 your taxable income is $27,050. You’ve done the calculation and expect you’ll need to pay taxes of $3,014. While your marginal tax rate is 12%, your effective tax rate is 11.1% ($3,014 divided by $27,050).
How To Get Into a Lower Tax Bracket
You can lower your income so that you top out at another tax bracket by using tax deductions, such as the write-offs for charitable donations, property taxes and mortgage interest. Deductions help cut your taxes by reducing your taxable income.
Tax credits, such as the earned income tax credit or child tax credit, can lower your effective tax rate. Credits provide a dollar-for-dollar reduction in the amount of taxes you owe.
Depending on your financial situation, you can use both tax deductions and credits to decrease the amount you pay Uncle Sam each year.
While having a higher income is good, it comes with a hefty tax bill. It may be worth meeting with a tax professional to create strategies that will reduce your taxable income and ultimately move you into a lower tax bracket.
– Kemberley Washington, CPA
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How Income Tax Brackets and Rates Have Evolved Over the Years
The IRS adjusts the tax bracket and rates each year to keep up with the current tax law. In 2013, the top tax rate was 39.6% for higher-income earners, but today, the top rate is only 37%.
Not only have rates been adjusted historically, but the income tax brackets have changed also. For example, in 2019, a married couple filing jointly with a household income of $600,000 would have been taxed at a top tax rate of 37%. However, in 2024 the same couple with the same income would only be taxed at a top tax rate of 35%.
Income tax brackets and rates continue to evolve. It was first introduced in 1913 and has been as high as 94%. Today’s top tax rate of 37% took effect in 2018.
Each bracketed rate applies to a portion of a person’s income.
