What is the irs tax rate for 2022

The federal income tax rates remain unchanged for the 2022 tax year are 10%, 12%, 22%, 24%, 32%, 35% and 37%. The income thresholds for each bracket, though, are adjusted slightly every year for inflation. Read on for more about the federal income tax brackets for Tax Year 2022 (filed by April 17, 2023). You can also work with a financial advisor who specializes in taxes to craft a financial plan that helps you to make sure you don’t overpay on your taxes.

Table of Contents Show

The Federal Income Tax Brackets
How the Marginal Tax Rate Works
How Federal Tax Brackets Work
Understanding the Current Federal Income Tax Brackets
The Bottom Line

The Federal Income Tax Brackets

The U.S. currently has seven federal income tax brackets, with rates of 10%, 12%, 22%, 24%, 32%, 35% and 37%. If you’re one of the lucky few to earn enough to fall into the 37% bracket, that doesn’t mean that the entirety of your taxable income will be subject to a 37% tax. Instead, 37% is your top marginal tax rate. You should note, however, that President Joe Biden has proposed raising the top bracket up to 39.6%.

How the Marginal Tax Rate Works

With a marginal tax rate, you pay that rate only on the amount of your income that falls into a certain range. To understand how marginal rates work, consider the bottom tax rate of 10%. For single filers, all income between $0 and $10,275 is subject to a 10% tax rate. If you have $10,475 in taxable income, the first $10,275 is subject to the 10% rate and the remaining $200 is subject to the tax rate of the next bracket (12%). Check out the charts below to see what your top marginal tax rate is for the tax year 2022, which will be filed in 2023.

Federal Income Tax Bracket for 2022 (filing deadline: April 17, 2023)SingleMarried Filing JointlyMarried Filing SeparatelyHead of Household10%$0 – $10,275$0 – $20,550$0 – $10,275$0 – $14,65012%$10,276 – $41,775$20,551 – $83,550$10,276 – $41,775$14,651 – $55,90022%$41,776 – $89,075$83,551 – $178,150$41,776 – $89,075$55,901 – $89,05024%$89,076 – $170,050$178,151 – $340,100$89,076 – $170,050$89,051 – $170,05032%$170,051 – $215,950$340,101 – $431,900$170,051 – $215,950$170,051 – $215,95035%$215,951 – $539,900$431,901 – $647,850$215,951 – $323,925$215,951 – $539,90037%$539,901+$647,851+$323,926+$539,901+

In rare cases, such as when one spouse is subject to tax refund garnishing because of unpaid debts to the state or federal government, opting for the “Married filing separately” tax status can be advantageous. Typically, though, filing jointly provides a tax break.

Only single people should use the single filing status. Single taxpayers who have dependents, though, should file as “Head of Household.” To qualify for this filing status, you must pay more than half of household expenses, be unmarried and have a qualifying child or dependent.

How Federal Tax Brackets Work

In the U.S., income is taxed progressively with higher tax brackets than in most other nations. Not all income is treated equally, as the more you make the higher percentage you end up contributing in taxes. All brackets work on a taxable income basis, not necessarily the actual amount of money earned in a given year.

Once all deductions are accounted for, and tax credits awarded, then the income total that is leftover is your taxable income. That income falls into a tax bracket and you pay the percentage within that bracket.

The easiest thing to do is to use SmartAsset’s free income tax calculator, but here are some tips to keep in mind if you’re estimating your own taxes:

Actual taxes paid: The tax you owe could vary based on where your income comes from and how it is broken up. Your entire income won’t necessarily be taxed at your tax bracket rate.
Income thresholds: The income thresholds for the federal tax brackets are updated and could change, annually. This is done to account for inflation.
Effective tax rate: Your effective tax rate is the percentage of your taxable income that you’ll pay in taxes. You can calculate this by dividing your tax owed by your total income. This is what you’ll actually pay.

If someone asks you for your tax bracket, the person is almost certainly asking for your top marginal tax rate. That’s why, when you’re reading the news, you’ll hear references to “filers in the top bracket” or maybe “taxpayers in the 37% bracket.” America’s top federal income tax bracket is varying over time quite a bit. It’s hard to believe now, but top federal income tax rates were once as high as 92%.

Understanding the Current Federal Income Tax Brackets

Our current tax brackets were adjusted when Congress passed new legislation in 2017 that changed the brackets and how taxes are filed. The tax reform passed by President Trump and Congressional Republicans lowered the top rate for five of the seven brackets. It also increased the standard deduction to nearly twice its 2017 amount.

For the most recent taxes filed, for the 2021 tax year that was filed in 2022, the standard deduction was $12,550 for single filers and married filers who file separately. Joint filers will have a $25,100 deduction and heads of household get $18,800.

The Bottom Line

Tax filers will need the 2022 federal income tax brackets when they file taxes in 2023. Your top tax bracket doesn’t just depend on your salary. It also depends on other sources of income (such as interest and capital gains) and your deductions. Depending on where you fall within a tax bracket, deductions could knock you into a lower tax bracket, reducing your tax liability or increasing the size of your tax refund.