An unexpected bonus, income from a side gig or a life change like retirement or marriage may have landed you in a new tax bracket this year. Determining your tax bracket, however, is complex, and the income cutoffs for each tax rate typically change each year.
Here are the 2022 income tax brackets for federal taxes due in April 2023:
Explore the 2022 Income Tax Brackets
A taxpayer’s bracket is based on his or her taxable income earned in 2022. Income ranges are adjusted annually for inflation, and as such income ranges have increased from 2021 ranges, the tax rates remain unchanged.
| Rate | Single | Married Filing Jointly | Head of Household |
| 10% | $0 to $10,275. | $0 to $20,550. | $0 to $14,650. |
| 12% | $10,276 to $41,775. | $20,551 to $83,550. | $14,651 to $55,900. |
| 22% | $41,776 to $89,075. | $83,551 to $178,150. | $55,901 to $89,050. |
| 24% | $89,076 to $170,050. | $178,151 to $340,100. | $89,051 to $170,050. |
| 32% | $170,051 to $215,950. | $340,101 to $431,900. | $170,051 to $215,950. |
| 35% | $215,951 to $539,900. | $431,901 to $647,850. | $215,951 to $539,900. |
| 37% | $539,901 or more. | $647,851 or more. | $539,901 or more. |
How Tax Brackets Work
The federal income tax bracket determines a taxpayer’s tax rate. There are seven tax rates for the 2022 tax season: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Filing status, amount of taxable income and the difference between marginal and effective tax rates determine a taxpayer’s federal income tax rate.
The progressive federal tax system in the U.S. requires filers with higher incomes to pay higher tax rates, but taxpayers don’t pay the same rate on every dollar earned. For example, a taxpayer with $35,000 in taxable income and filing single would fall in the 12% bracket — but only pay 10% on the first $10,276 and 12% on the rest.
[Read: How Remote Work Could Affect Your Income Tax.]
Identify Your Filing Status
Your filing status is one element that determines your tax bracket and, ultimately, your tax liability.
Common filing statuses include:
— Single: Unmarried or divorced taxpayers not claimed as a dependent on another person’s return.
— Married filing jointly: Couples married by Dec. 31, 2022, have the option to file jointly.
— Married filing separately: Couples married by Dec. 31, 2022, have the option to file separately.
— Head of household: Unmarried or divorced taxpayers who have a qualifying child or dependent and pay more than half of the costs of running the household where the qualifying child or dependent resided for at least half the year.
Married taxpayers have the choice to file jointly or separately, but some aspects of their returns will be connected regardless of their filing status. Couples who choose to file jointly may find themselves in a lower tax bracket than if they had filed separately.
[Read: Married Couples: Is It Better to File Taxes Jointly or Separately?]
How to Calculate Your Taxable Income
Though not a simple process, these are the three steps to calculating your taxable income:
1. Calculate your gross income by adding up earnings.
2. Calculate your adjusted gross income by subtracting tax adjustments.
3. Calculate your taxable income by subtracting deductions.
First, add up all of your 2022 earnings, including those from full-time employment, part-time employment, freelance work, income from rental properties and other sources. Then subtract any income that is considered an exclusion by the tax code, such as proceeds from a life insurance policy to determine your gross income.
Next, subtract any adjustments from your gross income. Adjustments might include contributions to a traditional IRA, student loan interest payments and health savings account contributions. This amount you arrive at is your adjusted gross income.
Finally, subtract any deductions from your adjusted gross income to determine your taxable income. Filers can take the standard deduction of $12,950 for single filers or $19,400 for heads of households and joint filers, or itemize deductions. This is your taxable income and the amount you can use to determine your tax bracket — though keep in mind that investment income is taxed at a separate capital gains rate.
“Take your gross income and subtract adjustments and deductions like alimony, half of your self-employment taxes, if you’re a teacher you get the teacher’s education deduction, the student loan interest deduction,” says Lisa Greene-Lewis, certified public accountant and tax expert at TurboTax. “Those expenses reduce your gross income and get you to your adjusted gross income and taxable income.”
[Read: Tax Write-Offs You Shouldn’t Overlook.]
Understand the Marginal Tax Rate vs. Effective Tax Rate
Your marginal tax rate is the rate you see listed on the federal income tax bracket. So, for example, individuals with a taxable income of $55,000 will have a marginal tax rate of 22%. But this rate isn’t applied to all of your taxable income.
Instead, in this example, the marginal tax rate is only applied to taxable income above $41,776 in 2022 and your effective tax rate looks like this:
10% x $10,275 = $1,027.50
12% x ($41,776 – $10,275) = $3,780.12
22% x ($55,000 – $41,776) = $2,909.28
In this example, the total tax liability for an individual with $55,000 in taxable income is $7,716.90, resulting in an effective tax rate of about 14%.
The 2021 Income Tax Brackets
Here’s a look at the 2021 tax brackets (taxes filed by April 2022):
| Rate | Single | Married Filing Jointly | Head of Household |
| 10% | Up to $9,950 | Up to $19,900 | Up to $14,200 |
| 12% | $9,951 to $40,525 | $19,901 to $81,050 | $14,201 to $54,200 |
| 22% | $40,526 to $86,375 | $81,051 to $172,750 | $54,201 to $86,350 |
| 24% | $86,376 to $164,925 | $172,751 to $329,850 | $86,351 to $164,900 |
| 32% | $164,926 to $209,425 | $329,851 to $418,850 | $164,901 to $209,400 |
| 35% | $209,426 to $523,600 | $418,851 to $628,300 | $209,401 to $523,600 |
| 37% | $523,601 or more | $628,301 or more | $523,601 or more |
The 2020 Income Tax Brackets
Here’s a look at the 2020 tax brackets (taxes filed by May 2021):
| Rate | Single | Married Filing Jointly | Head of Household |
| 10% | Up to $9,875 | Up to $19,750 | Up to $14,100 |
| 12% | $9,876 to $40,125 | $19,751 to $80,250 | $14,101 to $53,700 |
| 22% | $40,126 to $85,525 | $80,251 to $171,050 | $53,701 to $85,500 |
| 24% | $85,526 to $163,300 | $171,051 to $326,600 | $85,501 to $163,300 |
| 32% | $163,301 to $207,350 | $326,601 to $414,700 | $163,301 to $207,350 |
| 35% | $207,351 to $518,400 | $414,701 to $622,050 | $207,351 to $518,400 |
| 37% | Over $518,400 | Over $622,050 | Over $518,400 |
Ways to Lower Your Tax Rate
Knowing your tax bracket can help you legally reduce your tax liability. If your taxable income falls on the cusp of two tax brackets, there are a few options for lowering your tax liability by keeping yourself in that lower bracket.
Two common strategies for keeping inside a lower tax bracket are delaying income and making contributions to accounts like a health savings account or retirement funds. These strategies can reduce a taxpayer’s taxable income, possibly allowing him or her to maintain a lower rate.
“If a taxpayer is in a situation where they have the ability to recognize or not recognize some income in a certain year — such as year-end bonuses, when a company might give you the option to have that bonus paid out the week of Christmas or in early January — knowing where you fall within your tax bracket and how much room there is before that tax bracket is reached could weigh in on your decision,” says Martin Kamenski, CEO of Revel CPA, says.
But to most taxpayers, he says, “Don’t sweat your tax bracket too much.”
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Tax-Filing in 2023: What’s My Tax Bracket? originally appeared on usnews.com
Update 11/03/22: This story was published at an earlier date and has been updated with new information.
