2023-2024 Tax Brackets and Federal Income Tax Rates

There are seven federal income tax rates in 2023 and 2024: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your taxable income and filing status determine which rates apply to you.

The U.S. federal tax rates will remain the same until 2025 as a result of the Tax Cuts and Jobs Act of 2017, but the income thresholds that inform the tax brackets are generally adjusted each year to reflect the rate of inflation^[0]

These adjustments can help prevent taxpayers from ending up in a higher tax bracket as their cost of living rises, often called “bracket creep.” The tax bracket adjustments can also lower taxes for those whose compensation has not kept up with inflation.

2023 tax brackets and federal income tax rates

Federal income tax returns for 2023 are due by April 15, 2024, or October 15, 2024, with a tax extension. There are seven tax rates: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

The income thresholds for the 2023 tax brackets were adjusted significantly — up about 7% — from 2022 due to record-high inflation. This means that some people might be in a lower tax bracket than they were previously. Learn more about the 2023 tax rates and taxes owed for each status across taxable income brackets below:

2024 tax brackets and federal income tax rates

The IRS recently released updated 2024 tax brackets that can help you plan ahead for 2025.

Each 2024 tax bracket will see a roughly 5.4% shift upward from 2023, which means taxpayers whose salaries haven’t kept up with inflation might be able to shelter more income from higher tax rates next year. The 2024 tax rates, which range from 10% to 37%, remain the same as in previous years.

Learn more about the 2024 tax rates and taxes owed for each status across taxable income brackets:

How income tax brackets work

The U.S. has a progressive tax system. Broadly, this means that the government decides how much tax you owe by dividing your taxable income into chunks — also known as tax brackets — and each chunk gets taxed at the corresponding tax rate. The highest tax rate, the marginal rate, applies to only a portion of your income.

The progressive tax system also means that people with higher taxable incomes are subject to higher federal income tax rates, and people with lower taxable incomes are subject to lower federal income tax rates. The beauty of tax brackets is that no matter which bracket you’re in, you won’t pay that tax rate on your entire income.

Example: If you had $50,000 of taxable income, you’d pay 10% on that first $11,000 and 12% on the chunk of income between $11,001 and $44,725. And then you’d pay 22% on the rest because some of your $50,000 of taxable income falls into the 22% tax bracket. The total bill would be about $6,300 — about 13% of your taxable income, even though you’re in the 22% bracket. That 13% is your effective tax rate.

States may handle taxes differently than the federal government. Your state might have different brackets, or it might altogether use a different system. Colorado, for example, levies a flat income tax rate of 4.4% on taxable income, and some states, such as Wyoming, don’t levy a state income tax at all.

What is a marginal tax rate?

The marginal tax rate is the tax rate paid on your last dollar of taxable income. This typically equates to your highest tax bracket.

For example, if you’re a single filer in 2023 with $35,000 of taxable income, you would be in the 12% tax bracket. If your taxable income went up by $1, you would pay 12% on that extra dollar, too.

If you had $45,000 of taxable income, however, most of it would still fall within the 12% bracket, but the last few hundred dollars would land in the 22% tax bracket. Your marginal tax rate would then be 22%.

What is an effective tax rate?

The percentage of your taxable income that you pay in taxes is called your effective tax rate. To determine your effective tax rate, divide your total tax owed (line 16) on Form 1040 by your total taxable income (line 15).

Two common ways of reducing your tax bill are credits and deductions.

• Tax credits can reduce your tax bill on a dollar-for-dollar basis; they don’t affect what bracket you’re in.

• Tax deductions, on the other hand, reduce how much of your income is subject to taxes. Generally, deductions lower your taxable income by the percentage of your highest federal income tax bracket. So if you fall into the 22% tax bracket, a $1,000 deduction could save you $220.

In other words: Take all the tax deductions you can claim — they can reduce your taxable income and could kick you to a lower bracket, which means you pay a lower tax rate.

Tax brackets and rates for 2012-2022

Curious how federal income tax brackets and rates have changed over the years? Take a look back.