To determine your tax rate, the Internal Revenue Service (IRS) uses a series of ranges that represent increasingly higher amounts of income. These are called tax brackets. For every dollar of income you earn that falls into each bracket, you owe a percentage of that dollar in taxes.
There are seven tax brackets, with each range picking up where the previous range left off. If your income exceeds the range in a lower bracket, the remaining amount of income will be taxed at the rate in the next bracket, and so on. This is called progressive taxation.
Only the portion of your income that falls into each bracket is taxed at that bracket's tax rate. The highest bracket your income falls into without exceeding it represents your marginal tax rate. The IRS uses different sets of tax brackets for each type of filing status, allowing for more income to be taxed at a lower rate if your filing status qualifies.
There are also different tax rates for capital gains as well as for people who are subject to the alternative minimum tax, which is usually only assessed on certain high-net-worth taxpayers.
How tax brackets determine your taxes
When you earn an income, you're required to pay taxes on it. But you can reduce your taxable income — the amount of income you can be taxed on — by claiming certain tax deductions.
Most people claim the standard deduction. For tax year 2022, which you'll file your return for in 2023, the standard deduction reduces your taxable income by between $12,950 and $25,900, depending on your filing status. Other taxpayers with a more complicated tax profile may itemize their deductions and potentially deduct even more.
Your taxable income is the amount used to determine which tax brackets you fall into.
For example, if you earned $100,000 and claim $15,000 in deductions, then your taxable income is $85,000. That $85,000 happens to fall into the first three of the seven tax brackets, meaning that portions of it are taxed at different rates.
Ready to shop for life insurance?
Start calculator
Most people already have their taxes withheld from their paychecks by their employer. Other people, such as independent contractors, had to make periodic estimated tax payments based on their income.
When you file your tax return, you'll figure out if you paid enough tax in the previous year or if you paid too much. The former results in a tax bill for the amount you owe, and the latter results in a tax refund for the amount you overpaid.
2022 tax brackets
The 2021 tax brackets indicate how much tax you should pay during the year in 2021. When you file your tax return in 2022, you’ll indicate how much you paid, and determine whether you’re owed a refund or if you need to pay more.
Filing status in 2022: single
Tax rate | Income range | Total maximum tax |
|---|---|---|
You owe 10% on every dollar earned between | $0 and $10,275 | $1,027.50 |
Plus, you owe 12% on every dollar earned between | $10,275 and $41,775 | $4,807.50 |
Plus, you owe 22% on every dollar earned between | $41,775 and $89,075 | $15,213.50 |
Plus, you owe 24% on every dollar earned between | $89,075 and $170,050 | $34,647.50 |
Plus, you owe 32% on every dollar earned between | $170,050 and $215,950 | $49,335.50 |
Plus, you owe 35% on every dollar earned between | $215,950 and $539,900 | $162,718 |
Plus, you owe 37% on every dollar above | $539,900 | $162,718 + 37 cents for every dollar of income above $539,900 |
Collapse table 
Filing status in 2022: married filing jointly or qualifying widower
Tax rate | Income range | Total maximum tax |
|---|---|---|
You owe 10% on every dollar earned between | $0 and $20,550 | $2,055 |
Plus, you owe 12% on every dollar earned between | $20,550 and $83,550 | $9,615 |
Plus, you owe 22% on every dollar earned between | $83,550 and $178,150 | $30,427 |
Plus, you owe 24% on every dollar earned between | $178,150 and $340,100 | $69,295 |
Plus, you owe 32% on every dollar earned between | $340,100 and $431,900 | $98,671 |
Plus, you owe 35% on every dollar earned between | $431,900 and $647,850 | $174,253.50 |
Plus, you owe 37% on every dollar above | $647,850 | $174,253.50 + 37 cents for every dollar of income above $647,850 |
Collapse table
Filing status in 2022: married filing separately
Tax rate | Income range | Total maximum tax |
|---|---|---|
You owe 10% on every dollar earned between | $0 and $10,275 | $1,027.50 |
Plus, you owe 12% on every dollar earned between | $10,275 and $41,775 | $4,807.50 |
Plus, you owe 22% on every dollar earned between | $41,775 and $89,075 | $15,213.50 |
Plus, you owe 24% on every dollar earned between | $89,075 and $170,050 | $34,647.50 |
Plus, you owe 32% on every dollar earned between | $170,050 and $215,950 | $49,335.50 |
Plus, you owe 35% on every dollar earned between | $215,950 and $539,900 | $162,718 |
Plus, you owe 37% on every dollar above | $539,900 | $162,718 + 37 cents for every dollar of income above $539,900 |
Collapse table
Filing status in 2022: head of household
Tax rate | Income range | Total maximum tax |
|---|---|---|
You owe 10% on every dollar earned between | $0 and $14,650 | $1,465 |
Plus, you owe 12% on every dollar earned between | $14,650 and $55,900 | $6,415 |
Plus, you owe 22% on every dollar earned between | $55,900 and $89,050 | $13,708 |
Plus, you owe 24% on every dollar earned between | $89,050 and $170,050 | $33,148 |
Plus, you owe 32% on every dollar earned between | $170,050 and $215,950 | $47,836 |
Plus, you owe 35% on every dollar earned between | $215,950 and $539,900 | $161,218.50 |
Plus, you owe 37% on every dollar above | $539,900 | $161,218.50 + 37 cents for every dollar of income above $539,900 |
Collapse table
2023 tax brackets
The 2022 tax brackets indicate how much tax you should pay during the year in 2022.
Filing status in 2023: single
TAX RATE | INCOME RANGE |
|---|---|
10% on every dollar earned between | $0 and $11,000 |
12% on every dollar earned between | $11,000 and $44,725 |
22% on every dollar earned between | $44,725 and $95,375 |
24% on every dollar earned between | $95,375 and $182,100 |
32% on every dollar earned between | $182,100 and $231,250 |
35% on every dollar earned between | $231,250 and $578,125 |
37% on every dollar earned above | $578,125 |
Collapse table
Filing status in 2023: married filing jointly or qualifying widower
TAX RATE | INCOME RANGE |
|---|---|
10% on every dollar earned between | $0 and $22,000 |
12% on every dollar earned between | $22,000 and $89,450 |
22% on every dollar earned between | $89,450 and $190,750 |
24% on every dollar earned between | $190,750 and $364,200 |
32% on every dollar earned between | $364,200 and $462,500 |
35% on every dollar earned between | $462,500 and $693,750 |
37% on every dollar earned above | $693,750 |
Collapse table
Filing status in 2023: married filing separately
TAX RATE | INCOME RANGE |
|---|---|
10% on every dollar earned between | $0 and $11,000 |
12% on every dollar earned between | $11,000 and $44,725 |
22% on every dollar earned between | $44,725 and $95,375 |
24% on every dollar earned between | $95,375 and $182,100 |
32% on every dollar earned between | $182,100 and $231,250 |
35% on every dollar earned between | $231,250 and $578,125 |
37% on every dollar earned above | $578,125 |
Collapse table
Filing status in 2023: head of household
TAX RATE | INCOME RANGE |
|---|---|
10% on every dollar earned between | $0 and $15,700 |
12% on every dollar earned between | $15,700 and $59,850 |
22% on every dollar earned between | $59,850 and $95,350 |
24% on every dollar earned between | $95,350 and $182,100 |
32% on every dollar earned between | $182,100 and $231,250 |
35% on every dollar earned between | $231,250 and $578,100 |
37% on every dollar earned above | $578,100 |
Collapse table
Capital gains taxes
Net capital gains are the amount of profit you make after selling an asset at a higher price than you paid for it, whether it's a house or some cryptocurrency, after accounting for net capital losses. There are two types of capital gains: short-term capital gains and long-term capital gains.
Short-term capital gains result from an asset you sold after owning it for less than one year. Short-term capital gains are taxed the same way as your usual income taxes, using the tax brackets relevant to your filing status as if the gains were regular income.
Long-term capital gains result from an asset you sold after owning it for more than one year. Using a different set of tax brackets, the IRS taxes these net capital gains at much more favorable rates that ordinary income.
Read our complete guide to capital gains taxes.
2022 capital gains tax rates
Taxes you'll pay in 2022, to be filed on your 2023 tax return.
Note that you only have to pay capital gains taxes on realized gains, which is the value you receive after selling or exchanging an asset. If you hold onto an asset and it increases in value, but you don't sell it, then the asset's new value is considered an unrealized gain and isn't subject to tax.
2022 capital gains tax rates
Tax rate | Single tax filers | Married filing jointly | Head of household | Married filing separately |
|---|---|---|---|---|
0% | Up to $41,675 | Up to $83,350 | Up top $55,800 | Up to $41,675 |
15% | $41,675 to $459,750 | $83,350 to $517,200 | $55,800 to $488,500 | $41,675 to $258,600 |
20% | More than $459,750 | More than $517,200 | More than $488,500 | More than $258,600 |
2023 capital gains tax rates
Tax rate | Single tax filers | Married filing jointly | Head of household | Married filing separately |
|---|---|---|---|---|
0% | Up to $44,625 | Up to $89,250 | Up top $59,750 | Up to $44,625 |
15% | $44,625 to $492,300 | $89,250 to $553,850 | $59,750 to $523,050 | $44,625 to $276,925 |
20% | More than $492,300 | More than $553,850 | More than $523,050 | More than $276,925 |
Capital losses
Capital losses occur when you sell an asset for less than you paid for it. You can deduct up to $3,000 of a capital loss per year (or $1,500 if your filing status is married filing separately) from your taxable income. If a capital loss exceeds the $3,000 deduction, you can carry over the excess amount and deduct it the next year, and so on until you've deducted the full amount of the capital loss.
Dividends
Dividends are payments companies make to their shareholders. Even if you own just a little bit of stock, you may be paid a dividend. Dividends are taxed at the same rate as short-term capital gains.
Getting taxed on a bonus
Bonuses are not taxed differently than ordinary income. However, your bonus may appear to be taxed at a higher rate when you first receive it. That's because bonuses are considered supplemental wages, which include everything from commissions to overtime to prizes from your employer. Supplemental wages are subject to a different set of withholding rules than those that apply to your regular wages.
For the most part, supplemental wages are taxed at a flat 22%, down from 25% in years prior to 2018. But when you file your tax return, the bonus is counted along with the sum total of all your income that year. If the 22% tax rate resulted in you paying too much tax, part of it could be refunded to you after you file.
Extra income from a bonus can go a long way. We recommend putting as much as you can in a high-yield savings account to save for a rainy-day fund or emergency (such as an unexpectedly high tax bill).
Ready to shop for life insurance?
Start calculator
Tax brackets and the marriage penalty
When people get married, their combined income would put them over the tax brackets they were in when unmarried. Because of this, the IRS uses a separate set of tax brackets for married couples filing joint returns that allows higher levels of combined income to be taxed at lower rates.
This tax benefit works really well for couples at different levels of income. If you earn $250,000 per year and your spouse earns $50,000 per year, if you file a joint return then your marginal tax rate for $300,000 of combined income is only 24%. It would've been 35% if you'd filed as an individual. See the rates tax brackets for each filing status above.
But if couples earn the same level of income, in some cases they may pay a so-called marriage penalty. The marriage penalty isn't a real penalty; it's a quirk of the progressive taxation system that occurs when each spouse is individually in the same marginal tax bracket and combining their income pushes them into the next highest bracket.
The Tax Cuts and Jobs Act mostly mitigated the marriage penalty. That's because the maximum levels of income for married couples filing jointly in each tax bracket are now double the levels for individuals.
Alternative minimum tax rate
Many wealthier individuals are able to take advantage of tax deductions that simply don't apply to individuals with lower incomes. That means many wealthy people could pay a much lower tax rate as a proportion of their income than less-wealthy people.
For that reason, the IRS uses a special rule called the alternative minimum tax (AMT) for people who earn above a certain income. The effect of the AMT is to oblige people who claim a lot of personal allowances to pay at least a minimum amount of tax.
In effect, two income calculations are run: one with all your usual deductions applied, and another that removes most deductions from the calculation and applies an exemption — the AMT exemption — instead. If your tax rate under the second calculation is higher, then you have to pay the AMT on the amount of income in excess of the first calculation.
If you're subject to the AMT, you have to pay it in addition to your regular tax. Because of this, the AMT rate is usually lower than your marginal tax rate at similar levels of income.
Will I pay the AMT in 2023?
To determine whether you pay the AMT, the IRS first calculates your tentative minimum tax, which is based on your income minus the AMT exemption, before any deductions are applied.
In 2022, the AMT exemption for individuals is:
$59,050 for people with filing status married filing separately
$75,900 for people with filing status single or head of household
$118,100 for people with filing status married filing jointly or qualifying widower
In 2023, the AMT exemption for individuals will be:
$63,250 for people with filing status married filing separately
$81,300 for people with filing status single or head of household
$126,500 for people with filing status married filing jointly or qualifying widower
If you owe more using the tentative minimum tax calculation than the regular tax calculation (which includes your usual deductions, but not the AMT exemption), then you have to pay AMT on the excess.
Use the following table to determine your tax rate according to the AMT. The income ranges represent your income minus the AMT exemption plus a handful of AMT-specific tax deductions.
AMT rates for 2022
For all filing statuses except married filing separately.
Tax rate | Income range |
|---|---|
You owe 26% on every dollar earned between | $0 and $206,100 |
Plus, you owe 28% on every dollar earned above | $206,100 |
For filing status married filing separately.
Tax rate | Income range |
|---|---|
You owe 26% on every dollar earned between | $0 and $103,050 |
Plus, you owe 28% on every dollar earned above | $103,050 |
AMT rates for 2023
For all filing statuses except married filing separately.
Tax rate | Income range |
|---|---|
You owe 26% on every dollar earned between | $0 and $220,700 |
Plus, you owe 28% on every dollar earned above | $220,700 |
For filing status married filing separately.
Tax rate | Income range |
|---|---|
You owe 26% on every dollar earned between | $0 and $110,350 |
Plus, you owe 28% on every dollar earned above | $110,350 |
