2010 Federal Income Tax Brackets (IRS Income Tax Rates)
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FacebookWith just over a month left in 2009, it’s time to start thinking about your finances in 2010. Back in late October, the IRS released details regarding income tax changes for 2010, including (very slightly) modified income tax brackets. Here’s a quick rundown.
2010 Federal Income Tax Brackets
Here’s a quick rundown of Federal income tax brackets for 2010. If you compare to the 2009 income tax brackets, you’ll see that they’ve hardly changed at all:
| Tax Bracket | Married Filing Jointly | Single |
|---|---|---|
| 10% Bracket | $0 – $16,750 | $0 – $8,375 |
| 15% Bracket | $16,750 – $68,000 | $8,375 – $34,000 |
| 25% Bracket | $68,000 – $137,300 | $34,000 – $82,400 |
| 28% Bracket | $137,300 – $209,250 | $82,400 – $171,850 |
| 33% Bracket | $209,250 – $373,650 | $171,850 – $373,650 |
| 35% Bracket | Over $373,650 | Over $373,650 |
A few other points:
- Personal and dependency exemptions will be unchanged at $3650
- The standard deduction for heads of household increased from $8350 to $8400, but will remain unchanged for others
- The gift tax exclusion will remain unchanged at $13000
Minimizing your income taxes
Regardless of what the income tax brackets look like next year, you should start planning now to minimize your tax hit. Be aware (and take advantage) of the most common income tax deductions as well as those commonly missed tax deductions. Adopt tax efficient investment strategies. And be sure to take advantage of perks at work like a flexible spending account (FSA) or a health savings account (HSA).
Published on November 27th, 2009 - 11 Comments
Filed under: Taxes
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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11 Responses to “2010 Federal Income Tax Brackets (IRS Income Tax Rates)”
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November 27th, 2009 at 9:45 am
What’s my bracket? It all depends on the year end bonus! lol.
Here’s wishing you all BIG BONUSES this year so that this winter’s shopping spree is justified!
November 27th, 2009 at 11:06 am
Why are people who are single paying in the same bracket as married filing jointly if you make $373,649. All the other are different. I truly believe the IRS hates two married people that both work.
November 27th, 2009 at 1:50 pm
@Kevin
I’m starting to believe that the IRS hates single people who work, too.
I will gross about $72,000 this year. Earlier this year, I calculated that my taxes due would be approximately $12,000. Ouch! Then, after deciding to get married at the end of the year (wife is in school, no income) my tax bill is only going to be $7100.
November 27th, 2009 at 1:55 pm
Its astounding that if you go from making $68,000 to $68,001 a year (married/jointly) your rate jumps 10%. No other rate hike on that table is that steep.
Even jumping from $137,301 a year to $373,651 won’t increase your taxes by 10%.
November 27th, 2009 at 2:02 pm
Kevin: I noticed the same thing. Strange the way that level of income is treated the same for both couples and single filers, isn’t it?
November 27th, 2009 at 4:42 pm
I’m in the [25%] but one way I keep the bill down is claiming a dependant – handy little deduction when I pay over 50% of the expenses.
November 27th, 2009 at 9:29 pm
I just wish this was all the tax we paid! By the time we add in state, local, excise taxes; our taxes end up being the single largest expense we have.
http://eliminatethemuda.com/20.....eally-pay/
November 28th, 2009 at 5:53 am
If we would start our tax planning at the beginning of the year we’s be so much better off!
John DeFlumeri Jr
November 29th, 2009 at 3:35 pm
“Its astounding that if you go from making $68,000 to $68,001 a year (married/jointly) your rate jumps 10%. No other rate hike on that table is that steep.
Even jumping from $137,301 a year to $373,651 won’t increase your taxes by 10%.
Comment by David — Nov 27th 2009 @ 1:55 pm ”
It’s amazing that some people, supposedly educated and reasonably intelligent, still cannot get the concept of MARGINAL tax rate.
December 14th, 2009 at 12:58 pm
Can someone help me understand what the difference is between these tax tables and the tables in notice 1036 at the irs.gov web page.
In that I see completely different tables than what is shown here.
http://www.irs.gov/pub/irs-pdf/n1036.pdf?portlet=7
January 23rd, 2010 at 11:47 am
Nickel – If you remove g’s comment, please remove this first line here as well.
@g – no, g, what’s amazing is that some one bright enough to understand shoots an insult instead of helping to educate.
David – the marginal rate goes up, true. For each $100 taxable right before that $68,000, the couple pays $15 in tax. The tax on that first $68,000 doesn’t change. The next $100 on top of it is taxed at $25. Understand and use this to your benefit. Most people can use their 2009 return to get a good idea what 2010 will look like. Say your projection shows you’ll be at $76000 taxable. Why not plan as a couple to put $8000 in retirement accounts pre-tax, saving it from the 25% rate? If you chose to save more, you can use a Roth, as that next money (moving down) would only be taxed at 15%. You have a kid, and one of you stays home for a while, convert some pre-tax money to Roth at 15%, right till you hit that $68,000 (or whatever the number is when baby comes) again. This example just saved the taxpayer $800, as money was spared the 25% rate, and taxed at 15%.
Disclaimer – I am not defending ‘the system’. No one likes taxes. Just sharing how you can use the knowledge you gain to help your wallet a bit.