2023 IRS Inflation Adjustments
The IRS highlighted several changes that would positively impact taxpayers. With marginal tax brackets, the top tax rate is 37% in 2023 for individual taxpayers with incomes greater than $578,125. For married couples filing jointly, the income would have to exceed $693,750. The lowest rate is 10%, which applies to single individuals with an income of $11,000 of less — or married couples filing jointly with an income of $22,000. Refer to the chart below to confirm your new tax rate based on your salary and whether you’re filing individually or jointly.| Income for Single Taxpayers | Income for Married Couples Filing Jointly | Tax Rate |
| $578,125 or more | $693,750 or more | 37% |
| $231,250 – $578,124 | $462,500 – $693,749 | 35% |
| $182,100 – $231,249 | $364,200 – $462,499 | 32% |
| $95,375 – $182,099 | $190,750 – $364,199 | 24% |
| $44,725 – $95,374 | $89,450 – $190,749 | 22% |
| $11,000 – $44,724 | $22,000 – $89,449 | 12% |
| $0 – $10,999 | $0 – 21,999 | 10% |
2023 Standard Deductions
Source: IRS
For married couples filing jointly$27,000 (up $1,800 from 2022)
Single taxpayers or married couples filing separately$13,850 (up $900 from 2022)
Head of households$20,800 (up $1,400 from 2022)
Adjustments to Exemptions, Exclusions and Credits
Alongside the new tax brackets and standard deductions, the adjustments also apply to exemptions, exclusions and credits.Alternative minimum tax exemption: For individual taxpayers, the alternative minimum tax exemption is $81,300 and phases out at $578,150. For married couples filing jointly, the minimum is $126,500 and phases out at $1,156,300
Earned income tax credit: The 2023 maximum income tax credit is $7,430 for qualifying taxpayers with three or more children. The amount was raised compared to the maximum of $6,935 in 2022.
Adoption credit: The maximum credit permitted for adoptions in 2023 is $15,950, up from $14,890 in 2022.
Gift tax exclusion: The 2023 annual exclusion for gifts is $17,000 in 2023, up from $16,000 in 2022.
Foreign earned income exclusion: The foreign income exclusion is $120,000 in 2023, up from $112,000 in 2022.
Estate tax exclusion: Those who pass away in 2023 have a basic exclusion amount of $12,920,000, up from $12,060,000 in 2022.
Employee salary reductions: In 2023, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,050. The maximum carryover amount is $610 — an increase of $40 from 2022.
Medical savings account: In 2023, those who have self-only coverage in a medical savings account cannot have a deductible less than $2,650, from $200 from 2022; but no more than $3,950, an increase of $250 from 2022.