Tax Day is Approaching: Have Your Taxes Been Filed?
The IRS has started accepting tax returns, and it’s important to know when your taxes are due in 2023. Typically, tax day is on April 15, but it falls on a Saturday this year. The following Monday, April 17, is Emancipation Day, a recognized holiday in Washington D.C. As a result, the tax filing deadline for most Americans is Tuesday, April 18, 2023.
The U.S. tax system has experienced significant changes in recent years, and it’s crucial to comprehend how these changes may impact your tax liability, especially with the release of the 2023 tax brackets. In this article, we’ll delve into the differences in 2023 tax brackets and how they can affect your taxes.
An in-depth analysis of the tax brackets for both years reveals that they are separated into seven rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. However, the key variations lie in the income thresholds for each bracket, which have been adjusted for inflation and other factors in the 2023 tax year.
2023 Single Filer Tax Brackets
| If taxable income is: | The tax due is: |
| Not over $11,000 | 10% of taxable income |
| Over $11,000 but not over $44,725 | $1,100 plus 12% of the excess over $11,000 |
| Over $44,725 but not over $95,375 | $5,147 plus 22% of the excess over $44,725 |
| Over $95,375 but not over $182,100 | $16,290 plus 24% of the excess over $95,375 |
| Over $182,100 but not over $231,250 | $37,104 plus 32% of the excess over $182,100 |
| Over $231,250 but not over $578,125 | $52,832 plus 35% of the excess over $231,250 |
| Over $578,125 | $174,238.25 plus 37% of the excess over $578,125 |
2023 Married Filing Separately Tax Brackets
| If taxable income is: | The tax due is: |
| Not over $11,000 | 10% of taxable income |
| Over $11,000 but not over $44,725 | $1,100 plus 12% of the excess over $11,000 |
| Over $44,725 but not over $95,375 | $5,147 plus 22% of the excess over $44,725 |
| Over $95,375 but not over $182,100 | $16,290 plus 24% of the excess over $95,375 |
| Over $182,100 but not over $231,250 | $37,104 plus 32% of the excess over $182,100 |
| Over $231,250 but not over $346,875 | $52,832 plus 35% of the excess over $231,250 |
| Over $346,875 | $93,300.75 plus 37% of the excess over $346,875 |
2023 Head of Household Tax Brackets
| If taxable income is: | The tax due is: |
| Not over $15,700 | 10% of taxable income |
| Over $15,700 but not over $59,850 | $1,570 plus 12% of the excess over $15,700 |
| Over $59,850 but not over $95,350 | $6,868 plus 22% of the excess over $59,850 |
| Over $95,350 but not over $182,100 | $14,678 plus 24% of the excess over $95,350 |
| Over $182,100 but not over $231,250 | $35,498 plus 32% of the excess over $182,100 |
| Over $231,250 but not over $578,100 | $51,226 plus 35% of the excess over $231,250 |
| Over $578,100 | $172,623.50 plus 37% of the excess over $578,100 |
2023 Married Filing Jointly Tax Brackets
| If taxable income is: | The tax due is: |
| Not over $22,000 | 10% of taxable income |
| Over $22,000 but not over $89,450 | $2,200 plus 12% of the excess over $22,000 |
| Over $89,450 but not over $190,750 | $10,294 plus 22% of the excess over $89,450 |
| Over $190,750 but not over $364,200 | $32,580 plus 24% of the excess over $190,750 |
| Over $364,200 but not over $462,500 | $74,208 plus 32% of the excess over $364,200 |
| Over $462,500 but not over $693,750 | $105,664 plus 35% of the excess over $462,500 |
| Over $693,750 | $186,601.50 plus 37% of the excess over $693,750 |
Similarly, the income thresholds for married taxpayers filing separately and those filing as head of household have also been adjusted upward for each bracket. In contrast, the income thresholds for married taxpayers filing jointly have also been adjusted upward for each bracket.
The most significant effect of these changes is that taxpayers with higher income thresholds may find themselves paying lower tax rates or falling into a lower tax bracket.
Finally, it’s worth noting that experts have warned that the average tax refund in 2023 is down year-over-year, with the current average refund being $1,963, compared to last year’s average of $2,200. If you’re looking to receive your tax refund as soon as possible, consider using a service that offers free tax refund advances, which are short-term loans backed by your expected refund and are usually repaid by deducting from your eventual IRS refund.
To plan for your 2023 taxes, it’s essential to keep these changes in mind. Knowing your tax bracket and the rates that apply to your income can help you make more informed decisions about deductions, credits, and other tax-saving strategies. Please note that the examples provided in this article do not account for any deductions or credits that may apply to your tax situation. Thus, it’s always advisable to consult with a tax professional to ensure accurate tax liability calculations and take advantage of any potential savings.
