As an American taxpayer, understanding how do tax brackets work clarifies to you what portion of your earnings is taxed at what rate. It is worth noting that your income is not taxed as a lump sum in the United States. Instead, your income is broken down into portions, and each portion is subjected to ascertain rate depending o where it falls.
Furthermore, your marital status dictates the tax rate on your taxable income.
Below is a table of how tax brackets work in 2023:
Rate | Single | Heads of Households | Married (Filing Jointly) | Married (Filing Separately) |
10% | $0 – $11,000 | $0 – $15,700 | $0 – $22,000 | $0 – $11,000 |
12% | $11,001 – $44,725 | $15,701 – $59,850 | $22,001 – $89,450 | $11,001 – $44,725 |
22% | $44,726 – $95,375 | $59,851 – $95,350 | $89,451 – $190,750 | $44,726 – $95,375 |
24% | $95,376 – $182,100 | $95,351 – $182,100 | $190,751 – $364,200 | $95,376 – $182,100 |
32% | $182,101 – $231,250 | $182,101 – $231,250 | $364,201 – $462,500 | $182,101 – $231,250 |
35% | $231,251 – $578,125 | $231,251 – $578,100 | $462,501 – $693,750 | $231,251 – $346,875 |
37% | $578,126 + | $578,101 + | $693,751 + | $346,876 + |