What is the tax slab for 2022 2023?
IRS provides tax inflation adjustments for tax year 2023
WASHINGTON — The Internal Revenue Service today announced the tax year 2023 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2022-38 PDF provides details about these annual adjustments.
New for 2023
The Inflation Reduction Act extended certain energy related tax breaks and indexed for inflation the energy efficient commercial buildings deduction beginning with tax year 2023. For tax year 2023, the applicable dollar value used to determine the maximum allowance of the deduction is $0.54 increased (but not above $1.07) by $0.02 for each percentage point by which the total annual energy and power costs for the building are certified to be reduced by a percentage greater than 25 percent. The applicable dollar value used to determine the increased deduction amount for certain property is $2.68 increased (but not above $5.36) by $0.11 for each percentage point by which the total annual energy and power costs for the building are certified to be reduced by a percentage greater than 25 percent.
Highlights of changes in Revenue Procedure 2022-38
The tax year 2023 adjustments described below generally apply to tax returns filed in 2024.
The tax items for tax year 2023 of greatest interest to most taxpayers include the following dollar amounts:
- The standard deduction for married couples filing jointly for tax year 2023 rises to $27,700 up $1,800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 for 2023, up $900, and for heads of households, the standard deduction will be $20,800 for tax year 2023, up $1,400 from the amount for tax year 2022.
- Marginal Rates: For tax year 2023, the top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for married couples filing jointly).
- 35% for incomes over $231,250 ($462,500 for married couples filing jointly);
- 32% for incomes over $182,100 ($364,200 for married couples filing jointly);
- 24% for incomes over $95,375 ($190,750 for married couples filing jointly);
- 22% for incomes over $44,725 ($89,450 for married couples filing jointly);
- 12% for incomes over $11,000 ($22,000 for married couples filing jointly).
The lowest rate is 10% for incomes of single individuals with incomes of $11,000 or less ($22,000 for married couples filing jointly).
Items unaffected by indexing
By statute, certain items that were indexed for inflation in the past are currently not adjusted.
- The personal exemption for tax year 2023 remains at 0, as it was for 2022, this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
- For 2023, as in 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
- The modified adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit provided in § 25A(d)(2) is not adjusted for inflation for taxable years beginning after December 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint returns).
Maryland Income Tax Rates and Brackets
The chart shown below outlining the 2022 Maryland income tax rates and brackets is for illustrative purposes only. Do not use this overview to figure your tax. If your income is under $100,000, use the tax tables in the Maryland income tax booklet to figure your tax. If your income exceeds $100,000, use the appropriate row in the Maryland Tax Computation Worksheet Schedules I and II. See Instruction 17 in the tax booklet. 2022 Maryland Income Tax Rates
2022 Maryland Income Tax Rates
|Taxpayers Filing as Single, Married Filing Separately, Dependent Taxpayers or Fiduciaries||Taxpayers Filing Joint Returns, Head of Household, or Qualifying Widows/Widowers|
|Taxable Net Income||Maryland Tax||Taxable Net Income||Maryland Tax|
|$0 — $1,000||2.00%||$0 — $1,000||2.00%|
|$1,000 — $2,000||$20 plus 3.00% of the excess over $1,000||$1,000 — $2,000||$20 plus 3.00% of the excess over $1,000|
|$2,000 — $3,000||$50 plus 4.00% of the excess over $2,000||$2,000 — $3,000||$50 plus 4.00% of the excess over $2,000|
|$3,000 — $100,000||$90 plus 4.75% of the excess over $3,000||$3,000 — $150,000||$90 plus 4.75% of the excess over $3,000|
|$100,000 — $125,000||$4,697.50 plus 5.00% of the excess over $100,000||$150,000 — $175,000||$7,072.50 plus 5.00% of the excess over $150,000|
|$125,000 — $150,000||$5,947.50 plus 5.25% of the excess over $125,000||$175,000 — $225,000||$8,322.50 plus 5.25% of the excess over $175,000|
|$150,000 — $250,000||$7,260.00 plus 5.50% of the excess over $150,000||$225,000 — $300,000||$10,947.50 plus 5.50% of the excess over $225,000|
|Over $250,000||$12,760.00 plus 5.75% of the excess of $250,000||Over $300,000||$15,072.50 plus 5.75% of the excess over $300,000|
Local Income Tax Rates
Maryland’s 23 counties and Baltimore City levy a local income tax which we collect on the state income tax return as a convenience for local governments. The local income tax is calculated as a percentage of your taxable income. Local officials set the rates, which range between 2.25% and 3.20% for the current tax year. You should report your local income tax amount on line 28 of Form 502. Your local income tax is based on where you live — not where you work, or where your tax preparer is located. Be sure to use the correct rate for the local jurisdiction in which you live.
|Local Tax Area||2022||2023|
|Anne Arundel County||.0281||.0281*|
|Prince George’s County||.0320||.0320|
|Queen Anne’s County||.0320||.0320|
|St. Mary’s County||.0310||.0300|
* Anne Arundel Co. The local tax rates for taxable year 2023 are as follows:
(1) .0270 of an individual’s Maryland taxable income of $1 through $50,000; and
(2) .0281 of an individual’s Maryland taxable income in excess of $50,000. ** Frederick Co. The local tax rates for taxable year 2023 are as follows:
(1) .0275 for taxpayers with Maryland taxable income of $100,000 or less and a filing status of married filing joint, head of household, and qualifying widow(er) with dependent child;
(2) .0275 for taxpayers with Maryland taxable income of $50,000 or less and a filing status of single, married filing separately, and dependent; and
(3) .0296 for all other taxpayers.
Local Income Tax Rate Changes
Notification of Local Rate Change to Comptroller
Pursuant to Annotated Code of Maryland, Tax-General Article § 10-106(b), a county must provide notice of a county income tax rate change to the Comptroller on or before July 1 prior to the effective date of the rate change. To give notice of a county income tax rate change, you must submit a certified copy of the County Council passed ordinance or bill on or before the deadline required by law. You should mail your notice to: The Honorable Peter Franchot
Comptroller of Maryland
P.O. Box 466
Annapolis, MD 21404-0466 You should also cc Andrew Schaufele and Robert R. Scheerer at: Andrew Schaufele, Deputy Comptroller
Comptroller of Maryland
P.O. Box 466
Annapolis, MD 21404-0466 Robert R. Scheerer, Director
Revenue Administration Division
Comptroller of Maryland
P.O. Box 1829
Annapolis, MD 21404-1829
Resources for Local Governments Regarding Local Income Tax Requirements
- Local Income Tax Distribution Archive — County by county and city by town distributions of local income tax. Also included in the distribution of local income tax revenue are comparisons of delinquent distributions and fiduciary distributions by county, (net of municipalities) and by municipality.
- Local Income Tax Rate Changes — Instructions on how to notify the State of Maryland Comptroller’s Office of changes to local income tax rates by counties
- Local Tax Rates: A chart depicting each county and the City of Baltimore’s local income tax rates.
- Income Tax Summary Report Archive — This summary report is an analysis of Maryland resident and nonresident personal income tax returns filed for a given calendar year.
- © 2023 Comptroller of Maryland. All Rights Reserved.
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Federal Income Tax Brackets for Tax Years 2022 and 2023
The federal income tax rates remain unchanged for the 2022 and 2023 tax years 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 both tax year 2022 (filed by April 17, 2023) and tax year 2023 (filed by April 15, 2024). You can also work with a financial advisor to build a tax plan within your overall financial plan.
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.
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 chart 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)|
|Single||Married Filing Jointly||Married Filing Separately||Head of Household|
|10%||$0 – $10,275||$0 – $20,550||$0 – $10,275||$0 – $14,650|
|12%||$10,276 – $41,775||$20,551 – $83,550||$10,276 – $41,775||$14,651 – $55,900|
|22%||$41,776 – $89,075||$83,551 – $178,150||$41,776 – $89,075||$55,901 – $89,050|
|24%||$89,076 – $170,050||$178,151 – $340,100||$89,076 – $170,050||$89,051 – $170,050|
|32%||$170,051 – $215,950||$340,101 – $431,900||$170,051 – $215,950||$170,051 – $215,950|
|35%||$215,951 – $539,900||$431,901 – $647,850||$215,951 – $323,925||$215,951 – $539,900|
Now, here is the chart for tax brackets for the 2023 tax year, to be filed in 2024:
|Federal Income Tax Bracket for 2023 (filing deadline: April 15, 2024)|
|Single||Married Filing Jointly||Married Filing Separately||Head of Household|
|10%||$0 – $11,000||$0 – $22,000||$0 – $11,000||$0 – $15,700|
|12%||$11,001 – $44,725||$22,001 – $89,450||$11,001 – $44,725||$15,701 – $59,850|
|22%||$44,726 – $95,375||$89,451 – $190,750||$44,726 – $95,375||$59,851 – $95,350|
|24%||$95,376 – $182,100||$190,751 – $364,200||$95,376 – $182,100||$95,351 – $182,100|
|32%||$182,101 – $231,250||$364,201 – $462,500||$182,101 – $231,250||$182,101 – $231,250|
|35%||$231,251 – $578,125||$462,501 – $693,750||$231,251 – $346,875||$231,251 – $578,100|
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 2022 tax year that’s filed in 2023, the standard deduction is $12,950 for single filers and married filers who file separately. Joint filers will have a $25,900 deduction and heads of household get $19,400. For the 2023 tax year that’s filed in 2024, the standard deductions are $13,850, $27,700 and $20,800, respectively.
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.
Tips for Tax Filing
- If you’re precise with numbers and good at record-keeping, you’re probably fine using tax preparation software. But if you want help to minimize your tax liability, a financial advisor can help. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you need more time to file your taxes, you can use Form 4868 to get a maximum extension of six months from the April 15 deadline (to October 15.) But remember, this extension does not apply to payments. So if you owe taxes, you should estimate what you owe and pay what you can to avoid a penalty and interest.
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