Tax rates are regularly updated. It is more than likely that the Internal Revenue Service or the IRS changes them every year. They do so to keep up with the pace of inflation. Inflation affects the prices of everything customers buy. Bear in mind that the figure for the 2022 inflation was a whopping 8.7%. The new COLA has also made the Social Security Administration increase their checks.
As salaries and benefits go up, so have to go tax brackets. Otherwise, you would eventually have to pay more money because you would reach higher thresholds. It is often common that those who have low incomes must pay less tax. If it was not like this, they would not have enough money to make ends meet. Getting by has become a real challenge for many American families.
What are the new tax rates for 2023 according to the Internal Revenue Service?
Bear in mind that these tax brackets are for this new tax year. So, it will not affect your tax return now, the one you need to file until April 15. However, the Internal Revenue Service makes sure that people have enough time to know what the new tax rates are. In this way, they can arrange their finances and plan them carefully.
Thus, these marginal tax rates will be useful to plan the filing process in 2024. According to the Internal Revenue Service, the top tax rate for those individual single taxpayers is 37 percent. That is the case if their income is higher than $578,125. For those who are a couple and married who files together, it is $693,750 instead.
What are other possible rates according to the IRS?
The next tax rate is 35 percent for those individuals whose income is more than $231,250. Couples could earn over $462,500 if they file jointly. Then, it goes down to 32%. The amount for single filers is over $182,100. More than $364,200 is the income for married couples that file together. In the following group, there will be a higher drop in this tax rate.
Those individuals whose income is over $95,375 will have a 24% rate. Married couples could earn more than 190,750 dollars if they file jointly. The following tax bracket, 22%, is for individuals who have an income of more than 44,725 dollars. Those couples who file jointly will also have a 22% tax rate if they earn more than $89,450.
Those whose income is higher than $11,000 -individuals- or 22,000 dollars – couples- will have a 12 percent rate. The lowest tax bracket is 10% if they earn at least 11,000 dollars or less, $22,000 for married couples filing jointly.