Written by Riley Adams, CPA • Reviewed by a TurboTax CPAUpdated for Tax Year 2023 • December 19, 2023 6:51 AM
OVERVIEW
The federal income tax system is progressive, which means that tax rates go up the greater taxable income you have. The term "tax bracket" refers to the income ranges with differing tax rates applied to each range. When figuring out what tax bracket you’re in, you look at the highest tax rate applied to the top portion of your taxable income for your filing status.
Key Takeaways
- The progressive tax system in the U.S. means lower income levels pay lower tax rates than higher incomes.
- As you earn more money, your income may fall into higher tax brackets, causing different chunks of your taxable income to be taxed at different rates
- Your effective tax rate looks at the overall taxes paid on your income, providing a better sense of your federal income tax bill as a percentage of your taxable income.
What is a tax bracket?
A tax bracket is a range of taxable income that is subject to a specific tax percentage. The brackets used to calculate your income tax depend on your filing status. In 2023 there are seven tax brackets with each one having a different tax rate ranging from 10% to 37%. For example, the brackets below show the first tax bracket if you are filing as single is from $0 to $11,000 with a tax rate of 10%.
TurboTax Tip:
Ordinary income is taxed at seven different rates: 10, 12, 22, 24, 32, 35 and 37 percent. These are marginal rates, meaning that each rate applies only to a specific slice of income, rather than to your total income.
What are the 2023 federal income tax brackets?
Single filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $11,000 | 10% of the amount over $0 |
| $11,000 | $44,725 | $1,100 plus 12% of the amount over $11,000 |
| $44,725 | $95,375 | $5,147 plus 22% of the amount over $44,725 |
| $95,375 | $182,100 | $16,290 plus 24% of the amount over $85,375 |
| $182,100 | $231,250 | $37,104 plus 32% of the amount over $182,100 |
| $231,250 | $578,125 | $52,832 plus 35% of the amount over $231,250 |
| $578,125 | no limit | $174,238 plus 37% of the amount over $578,125 |
Married Filing Jointly or Qualifying Widow (Widower) filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $22,000 | 10% of the amount over $0 |
| $22,000 | $89,450 | $2,200 plus 12% of the amount over $22,000 |
| $89,450 | $190,750 | $10,294 plus 22% of the amount over $89,450 |
| $190,750 | $364,200 | $32,580 plus 24% of the amount over $190,750 |
| $364,200 | $462,500 | $74,208 plus 32% of the amount over $364,200 |
| $462,500 | $693,750 | $105,664 plus 35% of the amount over $462,500 |
| $693,750 | no limit | $186,601 plus 37 % of the amount over $693,750 |
Married Filing Separately filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $11,000 | 10% of the amount over $0 |
| $11,000 | $44,725 | $1,100 plus 12% of the amount over $11,000 |
| $44,725 | $95,375 | $5,147 plus 22% of the amount over $44,725 |
| $95,375 | $182,100 | $16,290 plus 24% of the amount over $95,375 |
| $182,100 | $231,250 | $37,104 plus 32% of the amount over $182,100 |
| $231,250 | $346,875 | $52,832 plus 35% of the amount over $231,250 |
| $346,875 | no limit | $93,300 plus 37% of the amount over $346,875 |
Head of Household filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $15,700 | 10% of the amount over $0 |
| $15,700 | $59,850 | $1,570 plus 12% of the amount over $15,700 |
| $59,850 | $95,350 | $6,868 plus 22% of the amount over $59,850 |
| $95,350 | $182,100 | $14,678 plus 24% of the amount over $95,350 |
| $182,100 | $231,250 | $35,498 plus 32% of the amount over $182,100 |
| $231,360 | $578,100 | $51,226 plus 35% of the amount over $231,360 |
| $578,100 | no limit | $172,624 plus 37% of the amount over $578,100 |
What are the 2024 federal income tax brackets?
Single filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $11,600 | 10% of the amount over $0 |
| $11,600 | $47,150 | $1,160 plus 12% of the amount over $11,600 |
| $47,150 | $100,525 | $5,426 plus 22% of the amount over $47,150 |
| $100,525 | $191,950 | $17,169 plus 24% of the amount over $100,525 |
| $191,950 | $243,725 | $39,111 plus 32% of the amount over $191,950 |
| $243,725 | $609,350 | $55,679 plus 35% of the amount over $243,725 |
| $609,350 | no limit | $183,647 plus 37% of the amount over $609,350 |
Married Filing Jointly or Qualifying Widow (Widower) filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $23,200 | 10% of the amount over $0 |
| $23,200 | $94,300 | $2,320 plus 12% of the amount over $23,200 |
| $94,300 | $201,050 | $10,852 plus 22% of the amount over $94,300 |
| $201,050 | $383,900 | $34,337 plus 24% of the amount over $201,050 |
| $383,900 | $487,450 | $78,221 plus 32% of the amount over $383,900 |
| $487,450 | $731,200 | $111,357 plus 35% of the amount over $487,450 |
| $731,200 | no limit | $196,670 plus 37 % of the amount over $731,200 |
Married Filing Separately filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $11,600 | 10% of the amount over $0 |
| $11,600 | $47,150 | $1,160 plus 12% of the amount over $11,600 |
| $47,150 | $100,525 | $5,426 plus 22% of the amount over $47,150 |
| $100,525 | $191,950 | $17,169 plus 24% of the amount over $100,525 |
| $191,950 | $243,725 | $37,111 plus 32% of the amount over $191,950 |
| $243,725 | $365,600 | $55,679 plus 35% of the amount over $243,725 |
| $365,600 | no limit | $98,335 plus 37% of the amount over $365,600 |
Head of Household filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $16,550 | 10% of the amount over $0 |
| $16,550 | $63,100 | $1,655 plus 12% of the amount over $16,550 |
| $63,100 | $100,500 | $7,241 plus 22% of the amount over $63,100 |
| $100,500 | $191,950 | $15,469 plus 24% of the amount over $100,500 |
| $191,950 | $243,700 | $37,417 plus 32% of the amount over $191,950 |
| $243,700 | $609,350 | $53,977 plus 35% of the amount over $243,700 |
| $609,350 | no limit | $181,955 plus 37% of the amount over $609,350 |
What are the 2022 federal income tax brackets?
Single filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $10,275 | 10% of the amount over $0 |
| $10,276 | $41,775 | $1,028 plus 12% of the amount over $10,275 |
| $41,776 | $89,075 | $4,808 plus 22% of the amount over $41,775 |
| $89,076 | $170,050 | $15,214 plus 24% of the amount over $89,075 |
| $170,051 | $215,950 | $34,648 plus 32% of the amount over $170,050 |
| $215,951 | $539,900 | $49,336 plus 35% of the amount over $215,950 |
| $539,901 | no limit | $162,718 plus 37% of the amount over $539,900 |
Married Filing Jointly or Qualifying Widow (Widower) filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $20,550 | 10% of the amount over $0 |
| $20,551 | $83,550 | $2,055 plus 12% of the amount over $20,550 |
| $83,551 | $178,150 | $9,615 plus 22% of the amount over $83,550 |
| $178,151 | $340,100 | $30,427 plus 24% of the amount over $178,150 |
| $340,101 | $431,900 | $69,295 plus 32% of the amount over $340,100 |
| $431,901 | $647,850 | $98,671 plus 35% of the amount over $431,901 |
| $647,851 | no limit | $174,254 plus 37 % of the amount over $647,850 |
Married Filing Separately filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $10,275 | 10% of the amount over $0 |
| $10,276 | $41,775 | $1,028 plus 12% of the amount over $10,275 |
| $41,776 | $89,075 | $4,808 plus 22% of the amount over $41,775 |
| $89,076 | $170,050 | $15,214 plus 24% of the amount over $89,075 |
| $170,051 | $215,950 | $34,648 plus 32% of the amount over $170,050 |
| $215,951 | $323,925 | $49,336 plus 35% of the amount over $215,950 |
| $323,926 | no limit | $87,127 plus 37% of the amount over $323,925 |
Head of Household filing status
| If taxable income is over: | but not over: | the tax is: |
| $0 | $14,650 | 10% of the amount over $0 |
| $14,651 | $55,900 | $1,465 plus 12% of the amount over $14,650 |
| $55,901 | $89,050 | $6,415 plus 22% of the amount over $55,900 |
| $89,051 | $170,050 | $13,708 plus 24% of the amount over $89,050 |
| $170,051 | $215,950 | $33,148 plus 32% of the amount over $170,050 |
| $215,951 | $539,900 | $47,836 plus 35% of the amount over $215,950 |
| $539,901 | no limit | $161,219 plus 37% of the amount over $539,900 |
How do tax brackets work?
A progressive tax system means that tax rates increase as your taxable income goes up and your income enters a higher tax bracket. This has you pay a greater rate of tax on each successive chunk of income. Each chunk of income—income in a tax bracket—shows the percentage of tax you pay on that portion of your income. This means whichever tax bracket you’re “in”, its rate won’t apply to your entire income unless your taxable income ends in the lowest bracket.
Tax bracket example
For example, if you are single and have taxable income of $200,000 in 2023, then you are in the 32 percent "bracket." However, you won’t pay 32% on your entire taxable income. Instead, you pay taxes as follows:
- 10 percent on your taxable income up to $11,000; plus
- 12 percent on the excess up to $44,725; plus
- 22 percent on taxable income between $44,725 and $95,375; plus
- 24 percent on the amount over $95,375 up to $182,100; plus
- 32 percent on the amount over $182,100 up to $200,000.
In this scenario, even though you're in the 32% bracket, you would actually pay only about 20.3% of your taxable income in taxes ($40,684/$200,000). Taxable income typically includes wages (including salaries, bonuses, commissions, and tips), and other income such as taxable interest, pensions, IRA/401k withdrawals, short term capital gains and others. Taxable income can be complex as the IRS classifies other types of earnings as taxable income as well.
How does my filing status affect my tax bracket?
The initial step for preparing your income tax return is to determine which filing status fits your situation. Generally, you have five options:
- single,
- head of household,
- married filing jointly,
- married filing separately or
- as a qualifying widower.
Your filing status is very important because it determines the amount of your standard deduction and the tax brackets (and therefore your tax rate) that your income is subject to. You can change your tax filing status each year as long as you satisfy its specific eligibility requirements.
What is a marginal tax rate?
Your marginal tax rate is the rate of the highest tax bracket that you'll be taxed in. It is the tax you pay on each additional dollar of your income and the rate by which each dollar of deduction lowers your tax. You do not pay your marginal tax rate on all of your taxable income (unless your income is only in the lowest tax bracket). Instead, you pay the lowest tax rate up to the limit of the lowest tax bracket, then the rate of the next lowest bracket up to its limit, and so on until reaching your total taxable income.
How do I figure out what my marginal tax rate/tax bracket is?
The easiest way to figure out your marginal tax rate is to look at the federal tax brackets and see in which bracket your taxable income ends. This represents your marginal tax rate. If you need help determining your tax bracket, visit TurboTax’s Tax Bracket Calculator. Simply provide your filing status and taxable income to estimate your tax bracket.
What is an effective tax rate?
While it's likely you will pay income tax at various rates or tax brackets, the actual percentage of your taxable income that goes to the IRS is referred to as your effective tax rate. Your last dollar of taxable income gets taxed at your highest marginal income tax rate, which is generally higher than your effective tax rate. For example, if half of your income is taxed at 10 percent and the other half at 12 percent, then your effective tax rate of 11 percent means that 11 cents of every dollar of taxable income you earned this year goes to the IRS. It doesn’t mean every additional dollar of taxable income is taxed at 11 percent. Additional income is taxed at your marginal rate, 12 percent in this case.
Which is more important, marginal or effective tax rate?
Generally, marginal rates are used for making decisions about what will happen if your income or deductions go up or down while effective rates are for knowing what percentage of your taxable income is being paid in tax. When looking at the importance of these two tax rates, your circ*mstance will determine which is more important. If you are trying to determine the impact of a specific change in income such as making a Roth conversion that is in addition to your other income, your marginal tax rate will typically tell you the answer. If you are trying to determine how much of your income to withhold for taxes then your effective tax rate typically will give you a better answer than your marginal tax rate. If the U.S. tax system used a flat tax, the marginal and effective tax rate would be the same.
How to get into a lower tax bracket?
If you want to get into a lower tax bracket, you have a couple options to get there through having a lower taxable income. You can have a lower taxable income by having less taxable income, taking advantage of more tax deductions or a combination of the two.
How do deductions affect your tax bracket?
Tax deductions reduce your taxable income, lowering the amount of income subject to taxes. Generally, deductions lower your tax by your marginal tax rate multiplied by the value of the deduction. For example, if you had a $1,000 tax deduction and are in the 22% marginal tax bracket, you’d pay $220 less on your taxes. If you are on the lower edge of a tax bracket, claiming a deduction may get you into a lower one.
How do tax credits affect your tax bracket?
Tax credits lower your tax bill dollar-for-dollar, but they don’t affect your marginal tax bracket. However, they do lower your effective tax rate. You can’t lower your tax bracket by claiming a credit. While you might have the goal of falling into a lower tax bracket, your primary goal should be to get your effective tax rate as low as possible. Deductions can help get you into a lower tax bracket and have a lower effective tax rate, but tax credits will help you lower your effective tax rate more given their ability to reduce your tax bill dollar-for-dollar.
The type of taxable income matters
Tax brackets rely on using your taxable income to determine your federal income tax bill. However, not all income is treated the same for tax purposes. Income you earn from your job gets taxed through the tax brackets used on ordinary income. Long-term capital gains, on the other hand, are taxed at a rate between 0% and 20%, depending on your income level. Regardless of what type of income you make or the marginal tax bracket you’re in, your goal should be to get your effective tax rate as low as possible.
Knowing your tax bracket and your effective tax rate can be the first steps to lowering your taxable income and lowering your tax.
If you need help determining your tax bracket, visit TurboTax’s Tax Bracket Calculator. Simply provide your filing status and taxable income to estimate your tax bracket.
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