With a new year comes new goals, hopes, and aspirations. Much less exciting, however, the new year comes with new tax changes, and as the holidays fade into the rearview mirror, reality has begun to set in.
First, the IRS has boosted the income thresholds for each bracket, applying to the tax year 2023 for returns filed in 2024. These brackets show how much you’ll owe for federal income taxes on each portion of your “taxable income,” calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
Marginal tax brackets for the tax year 2023, single individuals
|
Tax rate |
Taxable income bracket |
Tax owed |
|
10% |
$0 to $11,000. |
10% of taxable income. |
|
12% |
$11,001 to $44,725. |
$1,100 plus 12% of the amount over $11,000. |
|
22% |
$44,726 to $95,375. |
$5,147 plus 22% of the amount over $44,725. |
|
24% |
$95,376 to $182,100. |
$16,290 plus 24% of the amount over $95,375. |
|
32% |
$182,101 to $231,250. |
$37,104 plus 32% of the amount over $182,100. |
|
35% |
$231,251 to $578,125. |
$52,832 plus 35% of the amount over $231,250. |
|
37% |
$578,126 or more. |
$174,238.25 plus 37% of the amount over $578,125. |
Marginal tax brackets for married, filing jointly
|
Tax rate |
Taxable income bracket |
Taxes owed |
|
10% |
$0 to $22,000. |
10% of taxable income. |
|
12% |
$22,001 to $89,450. |
$2,200 plus 12% of the amount over $22,000. |
|
22% |
$89,451 to $190,750. |
$10,294 plus 22% of the amount over $89,450. |
|
24% |
$190,751 to $364,200. |
$32,580 plus 24% of the amount over $190,750. |
|
32% |
$364,201 to $462,500. |
$74,208 plus 32% of the amount over $364,200. |
|
35% |
$462,501 to $693,750. |
$105,664 plus 35% of the amount over $462,500. |
|
37% |
$693,751 or more. |
$186,601.50 + 37% of the amount over $693,750. |
The standard deduction will also increase to $27,700 for married couples filing jointly, up from $25,900 in 2022. Single filers may claim $13,850, an increase from $12,950 in 2022.
Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice. Any views expressed herein are those of the author(s) and not necessarily those of Multnomah Group or Multnomah Group’s clients.