Your New Standard Deduction and Tax Rate for 2023

Due to strong inflation, the well-liked federal income tax deduction and tax rates will increase more than usual. The federal government constantly modifies everything to account for inflation, from Social Security benefits to retirement account restrictions. The standard deduction and tax brackets, which are the income levels that determine your tax rate, are two important components of federal income taxes. And 2023 won’t be any different. Due to current inflation rates that are approaching a 40-year high, the IRS has declared that every standard deduction and individual income tax bracket will increase – and by more than typical.

The 2023 tax year, for which your tax return is due in April 2024, will see changes to the standard deduction and tax brackets.

2019 Standard Deductions

Nobody has to pay taxes on every dollar of income. As a result, not all of your income in 2023 will be subject to the tax rate listed below.

Tax deductions, which lower your taxable income, are one factor in this. Around 88% of taxpayers decide against itemizing their tax deductions in favor of the flat-rate standard deduction.

Taxpayers Who Are Under 65

Regular inflation adjustments are made to the standard deduction. The deduction’s value for 2023 is:

$27,700 if you file your taxes as a married couple filing jointly or as a surviving spouse (an increase of $1,800 from $25,900 in 2022)
If you file your taxes as a head of household, your maximum deduction is $20,800 (up from $19,400 in 2022).
If you are single or married filing separately, your tax filing threshold is $13,850 ($900 more than it was in 2022).

Assuming both parties are under 65, this implies that a married couple filing a joint tax return, for instance, will not owe any taxes on the first $27,700 of their 2023 income if they opt to take the standard deduction.

Taxpayers Who Are Blind and Over 65

In general, taxpayers who are 65 years of age or older and who are blind are entitled to an increase in their standard deductions. Such taxpayers will typically receive an additional $1,500 for married taxpayers in 2023 (up from $1,400 in 2022) or $1,850 for single taxpayers (up from $1,750 in 2022).

Therefore, the standard deduction for two married seniors filing a combined tax return would be $30,700 ($27,700 + $1,500 + $1,500).

Just be aware that “65” and “blindness” is defined differently by the IRS.

For 2023, a taxpayer cannot claim a greater standard deduction depending on age if they were born after January 2, 1959.

Consult IRS Publication 501 for additional information on the increased standard deduction for blindness.

Rates and Tax Brackets for 2023

The data in the charts below were obtained directly from the IRS. The income brackets (dollar figures) don’t represent your complete income. Rather, they represent your taxable income, which is your income after deductions and credits for taxes.

Locate your tax-filing status, and choose the most appropriate income bracket from the list under your tax-filing status to establish your tax rate for 2023. Your tax rate is to the right of that bracket.

Married Individuals Filing Jointly

As much as $22,000 (instead of $20,550 for 2022) — 10%

$22,000 (up from $20,550) — 12%

$89,450 (up from $83,550) — 22%

$190,750 (24% more than $178,150)

$364,200 (up from $340,100) — 32%

$462,500 (up from $431,900) — 35%

$693,750 (up from $647,850) — 37%

Householders’ heads

$15,700 maximum (was $14,650 for 2022) — 10%

$15,700 (up from $14,650) — 12%

$59,850 (up from $55,900) — 22%

$95,350 (up from $89,050) — 24%

$182,100 (up from $170,050) — 32%

$231,250 (up from $215,950) — 35%

$578,100 (up from $539,900) — 37%

Singles

Up to $11,000 ($10,275 for 2022; before) — 10%

More than $11,000 (was $10,275) — 12%

(Was: $41,775) More than $44,725 — 22%

$95,375 (up from $89,075) — 24%

$182,100 (up from $170,050) — 32%

$231,250 (up from $215,950) — 35%

$578,125 (up from $539,900) — 37%

Married couples submitting individual tax returns

Up to $11,000 ($10,275 for 2022; before) — 10%

Over $11,000 (up from $10,275) — 12%

More than $44,725 (22% more than $41,775)

$95,375 (up from $89,075) — 24%

$182,100 (up from $170,050) — 32%

$231,250 (up from $215,950) — 35%

$346,875 (up from $323,925) — 37%

Consider the scenario where your taxable income in 2023 is $50,000 and you file your taxes as a single person. Your tax rate would be 22% as you would be in the “greater than $44,725” tax bracket.

If you file jointly and had a household taxable income of $50,000 in 2023, you would be in the “greater than $22,000” tax bracket, with a 12% tax rate.