2023 Marginal Tax Rates by Income and Tax Filing Status Tax Rate Income Tax Bracket for Single Filers Income Tax Bracket for Married Couples Filing Jointly Income Tax Bracket for Married Couples Filing Separately Income Tax Bracket for Head of Household Filers 10% $11,000 or less $22,000 or less $11,000 or less $15,700 or less
What Is a Tax Break? The term tax break refers to a benefit the government offers that reduces your total tax liability. Tax breaks are made possible by tax laws and typically come in the form of credits and deductions. Other tax breaks include exemptions and excluding certain types of income from your state or
What Is a Tax Cheat? The term “tax cheat” refers to an individual or group who fails to pay the tax required of them by law. Depending on the usage, the term may also refer to individuals who use aggressive tax avoidance strategies despite technically following the letter of the law. Key Takeaways “Tax cheat”
What Is a Tax Code? In the United States, federal and state governments impose a variety of taxes under their respective tax laws, often referred to as tax codes. An income tax code is a law that prescribes the rules that individuals, businesses, and other entities must follow in remitting a portion of their incomes
What Is a Tax Credit? The term “tax credit” refers to an amount of money that taxpayers can subtract directly from the taxes they owe. This is different from tax deductions, which lower the amount of an individual’s taxable income. The value of a tax credit depends on the nature of the credit. Certain types of tax credits are granted to
What Is Tax-Deductible Interest? Tax-deductible interest is a borrowing expense that a taxpayer can claim on a federal or state tax return to reduce their taxable income. Several types of interest are tax-deductible, including mortgage interest on a primary or second home, student loan interest, and the interest on some business loans, including business credit
Standard Deduction for the 2022 and 2023 Tax Years Filing Status 2022 Standard Deduction 2023 Standard Deduction Single $12,950 $13,850 Married Filing Separately $12,950 $13,850 Heads of Household $19,400 $20,800 Married Filing Jointly $25,900 $27,700 Surviving Spouses $25,900 $27,700 Taxpayers at least 65 years old or blind can claim an additional standard deduction. For 2022
What Is a Tax Deed? The term “tax deed” refers to a legal document granting ownership of a property to a government body when the owner fails to pay any associated property taxes. A tax deed gives the government agency the authority to sell the property to collect the delinquent taxes. Once sold, the property
What Does Tax-Deferred Mean? Tax-deferred status refers to investment earnings—such as interest, dividends, or capital gains—that accumulate tax-free until the investor takes constructive receipt of the profits. Some common examples of tax-deferred investments include individual retirement accounts (IRAs) and deferred annuities. Key Takeaways Tax-deferred status refers to investment earnings—such as interest, dividends, or capital gains—that
What Is a Tax-Deferred Savings Plan? A tax-deferred savings plan is an investment account that allows a taxpayer to postpone paying income taxes on the money invested until it is withdrawn, generally after retirement. The best-known such plans are individual retirement accounts (IRAs) and 401(k) plans. Key Takeaways The 401(k) and traditional IRA are two
