Takeaways
- There are seven federal income tax brackets for 2023 and 2024.
- There are four filing statuses for the tax years 2023 and 2024.
- The tax filing deadline for 2023 is Monday, April 15, 2024.
- The U.S. tax system has a progressive federal income tax system.
- You won’t pay the full rate shown on your tax rate bracket.
How Income Taxes Work
The U.S. has a progressive federal income tax system. A progressive tax means that your total taxable income is spliced into brackets, or buckets, of taxable income. Each bucket gets taxed at the assigned tax rate. As your income increases, your income gets taxed at a progressively higher rate. When you analyze how much taxable income you have, the marginal tax rate is the highest tax rate applied to your income.
There are seven categories of federal income tax rates for 2023 and 2024. The seven tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Based on the Tax Cuts and Jobs Act of 2017 these tax rates will remain effective until 2025[1]. However, the income amounts that make up each tax bracket can be adjusted for inflation.
Your total taxable income and your tax filing status determine your marginal tax rate. There are four types of tax filing statuses for the tax years 2023 and 2024. The four filing statuses are:
- Single
- Head of Household
- Married Filing Separately
- Married Filing Jointly
The progressive tax system is designed to tax high-income earners at a higher tax rate while taxing lower earners at a lower tax rate. This is opposed to a tax system like a flat tax rate that taxes everyone at the same tax rate, regardless of how much income you make.
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Example of Progressive Income Tax
Let’s say that you are a single software engineer who made $100,000 in pre-tax income during 2023. Because you are a “Single” tax filer, and your taxable income is over $95,375, your tax would be $16,290 plus 24% of the excess over $95,375 (see the 2023 Federal Income Tax Rates and Brackets table below). As a result, you would owe approximately $17,400 in federal income tax.
Everyone has a unique financial situation; at Smart Money, we recommend connecting with a financial or tax professional to help you navigate the complexities of the tax filing season.
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When Are Federal Taxes Due?
For 2023, federal income tax returns are due Monday, April 15, 2024. If you file a tax extension, they are due Tuesday, October 15, 2024. For 2024, federal income tax returns are due Tuesday, April 15, 2025. But if you file a tax extension, they are due Wednesday, October 15, 2025. It is important to note that while you can file for an extension, your federal income tax payment is due on April 15, 2024, and April 15, 2025, respectively.
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2023 Federal Income Tax Rates and Brackets
| Tax Rate | Single | Married Filing Jointly | Married Filing Separately | Head of Household |
|---|---|---|---|---|
| 10% | $0 – $11,000 |
$0 – $22,000 |
$0 – $11,000 |
$0 – $15,700 |
| 12% | $11,000 - $44,725 |
$22,000 – $89,450 |
$11,000 – $44,725 |
$15,700 – $59,850 |
| 22% | $44,725 – $95,375 |
$89,450 – $190,750 |
$44,725 – $95,375 |
$59,850 – $95,350 |
| 24% | $95,375 – $182,100 |
$190,750 – $364,200 |
$95,375 – $182,100 |
$95,350 – $182,100 |
| 32% | $182,100 – $231,250 |
$364,200 – $462,500 |
$182,100 – $231,250 |
$182,100 – $231,250 |
| 35% | $231,250 – $578,125 |
$462,500 – $693,750 |
$231,250 – $346,875 |
$231,250 – $578,100 |
| 37% | Over $578,125 |
Over $693,750 |
Over $346,875 |
Over $578,100 |
Source: Provided by the Internal Revenue Service [2]
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2024 Federal Income Tax Rates and Brackets
| Tax Rate | Single | Married Filing Jointly | Married Filing Separately | Head of Household |
|---|---|---|---|---|
| 10% | $0 – $11,600 |
$0 – $23,200 |
$0 – $11,600 |
$0 – $16,500 |
| 12% | $11,600 – $47,150 |
$23,200 – $94,300 |
$11,600 – $47,150 |
$16,500 – $63,100 |
| 22% | $47,150 – $100,525 |
$94,300 – $201,050 |
$47,150 – $100,525 |
$63,100 – $100,500 |
| 24% | $100,525 – $191,950 |
$201,050 – $383,900 |
$100,525 – $191,950 |
$100,500 – $191,950 |
| 32% | $191,950 – $243,700 |
$383,900 – $487,450 |
$191,950 – $243,725 |
$191,950 – $243,700 |
| 35% | $243,700 – $609,350 |
$487,450 – $731,200 |
$243,725 – $365,600 |
$243,700 – $609,350 |
| 37% | Over $609,350 |
Over $731,200 |
Over $365,600 |
Over $609,350 |
Source: Provided by the Internal Revenue Service [3]
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Smart Summary
Filing taxes should be a regular part of your overall financial plan. Every year in April, millions of U.S. taxpayers must submit their federal and state tax returns. Being prepared for this event is a smart money move, and you can boost your tax strategies by consulting with a tax advisor or financial advisor. Planning for success and mitigation investment strategies can increase your take-home pay and help you increase your net worth fast.
Frequently Asked Questions
Many free tax filing programs offer great products. For more information and options, check out our choices for the Best Online Tax Software Services.
Depending on the complexity of your taxes, you can file your own federal and state income tax returns. But for more comfort and assistance with the process, it might make sense to consult a tax or financial professional.
Financial advisors can be helpful in the short and long term. Financial advisors can provide solutions, recommendations, or advice that might help you save time and cash
(1) Internal Revenue Service. Tax Reform Basics for Individuals and Families (Publication 5307). Last Accessed January 1, 2024.
(2) Internal Revenue Service. Proc. 2022-38. Last Accessed January 1, 2024.
(3) Internal Revenue Service. Proc. 2023-34. Last Accessed January 1, 2024.
