![A graph showing the seven federal tax brackets and their corresponding tax rates](https://b2762526.smushcdn.com/2762526/wp-content/uploads/2023/10/657d8b1b-4636-4666-b80e-f860d8f13483-300x169.jpg?lossy=1&strip=1&webp=1)
2023 Tax Bracket Definition: Understanding Tax Brackets, Examples, Pros, and Cons
Tax brackets are a fundamental component of progressive taxation systems. At a basic level, they categorize income into ranges, with each range taxed at a specific rate. As one’s income rises, they move into higher brackets, resulting in a higher tax rate for that portion of income. Understanding tax brackets is key to decoding the complexities of personal finance and ensuring you’re informed about potential tax liabilities.