What is the federal tax rate for married filing jointly

1 Net amount subject to federal income tax after deductions.

2 Additional 3.8% federal tax imposed on lesser of total “net investment income” or the amount of modified adjusted gross income (MAGI) in excess of the applicable threshold ($200,000 for Single and Head of Household, $250,000 for Married Filing Joint, and $125,000 for Married Filing Separately). For presentation in this table, no distinction is made between MAGI and taxable income. However, since MAGI is generally higher than taxable income, the 3.8% tax may be applicable even if your taxable income is below the applicable threshold.

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Tax brackets for income earned in 2022

• 37% for incomes over $539,900 ($647,850 for married couples filing jointly)
• 35% for incomes over $215,950 ($431,900 for married couples filing jointly)
• 32% for incomes over $170,050 ($340,100 for married couples filing jointly)
• 24% for incomes over $89,075 ($178,150 for married couples filing jointly)
• 22% for incomes over $41,775 ($83,550 for married couples filing jointly)
• 12% for incomes over $10,275 ($20,550 for married couples filing jointly)
• 10% for incomes of $10,275 or less ($20,550 for married couples filing jointly

Married filing separately pay at same rate as unmarried. Source: Internal Revenue Service

Tax brackets for income earned in 2023

• 37% for incomes over $578,125 ($693,750 for married couples filing jointly)
• 35% for incomes over $231,250 ($462,500 for married couples filing jointly)
• 32% for incomes over $182,100 ($364,200 for married couples filing jointly)
• 24% for incomes over $95,375 ($190,750 for married couples filing jointly)
• 22% for incomes over $44,725 ($89,450 for married couples filing jointly)
• 12% for incomes over $11,000 ($22,000 for married couples filing jointly)
• 10% for incomes of $11,000 or less ($22,000 for married couples filing jointly)

Married filing separately pay at same rate as unmarried. Source: Internal Revenue Service

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In addition, the standard deduction will rise to $13,850 for single filers for the 202 3 tax year , from $12,950 the previous year. The standard deduction for couples filing jointly will rise to $27,700 in 2023, from $25,900 in the 2022 tax yea r. Single filers age 65 and older  who are not a surviving spouse can increase the standard deduction by $1, 850. Each joint filer 65 and over can increase the standard deduction by $1, 500 apiece,  for a total of $3, 000 if both joint filers are 65-plus. You can also itemize individual tax deductions, for things like charity donations, but they need to add up to more than the standard deduction to make itemizing worthwhile.

The IRS uses the chained consumer price index (CPI) to measure inflation, as mandated by the 2017 tax reform. Like the more well-known consumer price index, the chained CPI measures price changes in about 80,000 items. The chained CPI takes into account the fact that when prices of some items rise, consumers often substitute other items. If the price of beef rises, for example, people switch to chicken.

If you’re not an economist, the main difference between the two measures is that, over time, the chained CPI rises at a slower pace than the traditional CPI — which, to be precise, is called the Consumer Price Index for All Urban Consumers , or CPI-U. From September 20 1 2 through September 20 22, the CPI-U rose by 28.3 percent and the chained CPI by only 24.8 percent, a difference of 3.5 percentage points.

If you paid a big tax bill in 202 2, you should talk with a tax adviser about how to reduce your bill in 202 3. It’s probably easier to have more money withheld from each paycheck than to face a big tax bill next year. A good first step is to look at how much tax you get taken from your paycheck. The IRS has a free withholding estimator that can tell you how much you should have taken out.

On a yearly basis the Internal Revenue Service (IRS) adjusts more than 60 tax provisions for inflation to prevent what is called “bracket creep.” Bracket creep occurs when people are pushed into higher income tax brackets or have reduced value from credits and deductions due to inflation, instead of any increase in real income.

The IRS used to use the Consumer Price Index (CPI) as a measure of inflation prior to 2018. However, with the Tax Cuts and Jobs Act of 2017 (TCJA), the IRS now uses the Chained Consumer Price Index (C-CPI) to adjust income thresholds, deduction amounts, and credit values accordingly.

The new inflation adjustments are for tax year 2023, for which taxpayers will file tax returns in early 2024. Note that the Tax Foundation is a 501(c)(3) educational nonprofit and cannot answer specific questions about your tax situation or assist in the tax filing process.

2023 Tax Brackets and Rates

In 2023, the income limits for all tax brackets and all filers will be adjusted for inflation and will be as follows (Table 1). There are seven federal income tax rates in 2023: 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent. The top marginal income tax rate of 37 percent will hit taxpayers with taxable income above $539,900 for single filers and above $693,750 for married couples filing jointly.

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Standard Deduction and Personal Exemption

The standard deduction will increase by $900 for single filers and by $1,800 for joint filers (Table 2).

The personal exemption for 2023 remains at $0 (eliminating the personal exemption was part of the Tax Cuts and Jobs Act of 2017 (TCJA).

Alternative Minimum Tax (AMT)

The Alternative Minimum Tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income tax. This parallel tax income system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two.

The AMT uses an alternative definition of taxable income called Alternative Minimum Taxable Income (AMTI). To prevent low- and middle-income taxpayers from being subject to the AMT, taxpayers are allowed to exempt a significant amount of their income from AMTI. However, this exemption phases out for high-income taxpayers. The AMT is levied at two rates: 26 percent and 28 percent.

The AMT exemption amount for 2023 is $81,300 for singles and $126,500 for married couples filing jointly (Table 3).

In 2023, the 28 percent AMT rate applies to excess AMTI of $220,700 for all taxpayers ($110,350 for married couples filing separate returns).

AMT exemptions phase out at 25 cents per dollar earned once AMTI reaches $578,150 for single filers and $1,156,300 for married taxpayers filing jointly (Table 4).

Earned Income Tax Credit (EITC)

The maximum Earned Income Tax Credit (EITC) in 2023 for single and joint filers is $560 if the filer has no children (Table 5). The maximum credit is $3,995 for one child, $6,604 for two children, and $7,430 for three or more children.

Child Tax Credit

The maximum Child Tax Credit is $2,000 per qualifying child and is not adjusted for inflation. The refundable portion of the Child Tax Credit is adjusted for inflation and will increase from $1,500 to $1,600 for 2023.

Capital Gains Tax Rates & Brackets (Long-term Capital Gains)

Long-term capital gains are taxed use different brackets and rates than ordinary income (Table 6.)

Qualified Business Income Deduction (Sec. 199A)

The Tax Cuts and Jobs Act of 2017 (TCJA) includes a 20 percent deduction for pass-through businesses. Limits on the deduction begin phasing in for taxpayers with income above $182,100 (or $364,200 for joint filers) in 2023 (Table 7).

Annual Exclusion for Gifts

In 2023, the first $17,000 of gifts to any person are excluded from tax, up from $16,000. The exclusion is increased to $175,000 from $164,000 for gifts to spouses who are not citizens of the United States.

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