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Income Tax

Projected 2023 Income Tax Rates

Inflation adjusted amounts in the tax code will increase by roughly 7.1% from 2022, more than double last year’s increase of 3%, according to the 2023 Projected U.S. Tax Rates forecast.

Isaac M. O'Bannon

Sep. 18, 2022

Inflation adjusted amounts in the tax code will increase by roughly 7.1% from 2022, more than double last year’s increase of 3%, according to the 2023 Projected U.S. Tax Rates forecast from Bloomberg Tax. The report also projects that several key deductions for taxpayers will see notable year-over-year increases, with the foreign earned income exclusion increasing to $120,000 from $112,000 and the annual exclusion for gifts increasing to $17,000 from $16,000, thereby allowing taxpayers to increase their gifts without tax implications.

Issued annually, Bloomberg Tax’s Projected U.S. Tax Rates Report provides early, accurate notice of the potential tax savings that could be realized due to increases in deduction limitations, upward adjustments to tax brackets, and increases to numerous other key thresholds. The full report is available at https://pro.bloombergtax.com/reports/2023-projected-u-s-tax-rates?trackingcode=BTXF22108715&utm_medium=pr&utm_source=marketingsite.

“We predict that inflation-adjusted amounts in the tax code will increase significantly in 2023 compared to prior years due to the economic environment,” said Heather Rothman, Vice President, Analysis & Content, Bloomberg Tax. “Taxpayers and advisors can use our projections to begin their 2023 tax planning before the IRS publishes the official 2023 inflation-adjusted amounts later this year.”

The report also accounts for changes made under the recently enacted Inflation Reduction Act, including the increase in the §179D deduction for energy efficient commercial building property if new wage and apprenticeship requirements are met, which may entice a more sophisticated type of worker for companies using this tax incentive.

Other key adjustments include:

Individual Income Tax Rate Brackets

Married Filing Jointly and Surviving Spouses

Projected 2023 Tax Rate Bracket Income Ranges
  • 10% – $0 to $22,000
  • 12% – $22,000 to $89,450
  • 22% – $89,450 to $190,750
  • 24% – $190,750 to $364,200
  • 32% – $364,200 to $462,500
  • 35% – $462,500 to $693,750
  • 37% – $693,750 or more

Unmarried Individuals
(other than Surviving Spouses and Heads of Households)

Projected 2023 Tax Rate Bracket Income Ranges
  • 10% – $0 to $11,000
  • 12% – $11,000 to $44,725
  • 22% – $44,725 to $95,375
  • 24% – $95,375 to $182,100
  • 32% – $182,100 to $231,250
  • 35% – $231,250 to $578,125
  • 37% – $578,125 or more

Standard Deduction

Projected 2023 Standard Deduction by Filing Status
  • Married Filing Jointly/Surviving Spouses – $27,700
  • Heads of Household – $20,800
  • All Other Taxpayers – $13,850

Alternative Minimum Tax (AMT)

Projected 2023 AMT Exemption Amount by Filing Status
  • Married Filing Jointly/Surviving Spouses – $126,500
  • Unmarried Individuals (other than Surviving Spouses) – $81,300
  • Married Filing Separately – $63,250
  • Estates and Trusts – $28,400

The 2023 Projected U.S. Tax Rates report is based on changes to the Chained Consumer Price Index for All Urban Consumers, which were published today by the U.S. Bureau of Labor Statistics.