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2010 Federal Income Tax Brackets (IRS Tax Rates)

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Every year about this time, when the Bureau of Labor Statistics (BLS) releases inflation data, specifically the CPI-U, experts from a variety of magazines and newspapers try to predict what the tax brackets will be the following year. This is possible because many figures in the tax laws are based on inflation, such as the standard deduction, contribution limits for Traditional and Roth IRAs, and the size and placing of the tax brackets themselves.

This year, the Tax Foundation is first out the gate with their prediction that everything will essentially remain the same as inflation was a mere 0.19%. When they performed this exercise in predicting the 2009 federal income tax brackets, they were 100% correct. I’m fairly confident that these numbers will be accurate when the IRS officially announces the tax brackets for 2010.

2010 IRS Tax Brackets

The below 2010 tax tables are the projected federal income tax brackets for 2010:

Tax Bracket Single Married Filing Jointly
10% Bracket $0 – $8,375 $0 – $16,750
15% Bracket $8,375 – $34,000 $16,750 – $68,000
25% Bracket $34,000 – $82,400 $68,000 – $137,300
28% Bracket $82,400 – $171,850 $137,300 – $209,250
33% Bracket $171,850 – $373,650 $209,250 – $373,650
35% Bracket $373,650+ $373,650+

Here are some other important non-tax bracket-related updates (until these are made official by the IRS, these are merely predictions by the experts). As expected, no (or very small) changes:

  • Standard deduction remains the same: The standard deduction for singles will remain at $5,700. For married filing jointly, the number will also remain at $11,400. If you are a Head of Household, it’s expected to increase by $50 to $8,400.
  • Personal exemption remains the same: The personal exemption will remain at $3,650.
  • Annual gift tax exclusion unchanged: For 2010, the current 2009 gift tax exclusion of $13,000 is expected to remain the same. The gift tax is how much you can give to someone else without any tax considerations.

For comparison, here are the 2009 Federal Income Tax Brackets and the 2008 Federal Income Tax Brackets.

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412 Responses to “2010 Federal Income Tax Brackets (IRS Tax Rates)”

  1. Sam says:

    endtheoccupation.org

  2. Sam says:

    please visit the website endtheoccupation org

  3. Dave Heideman says:

    So if one’s taxable income were exactly $34,000, would it all be taxed at 15%, or would the first $8,375 be taxed at 10% and the remainder at 15%?

    • Jim says:

      First $8325 would be taxed at 10% and the remainder taxed at 15%.

      • Astro says:

        All your income is taxed at the amount of the tax bracket you are in. I.e. all would be at 15% if you make 34,000. But don’t forget that you will get a Federal rebate (~11400 if file jointly) that you would subtract from the 34,000 so your Fed Taxable income would be ~22,600. Which would still put you in the 15% tax bracket on all of it.

        • Jim says:

          That’s incorrect, all of your income is NOT taxed at the amount of your bracket.

        • Mike says:

          Astro is wrong! Jim you are right!

        • Jake says:

          Astro… you are so far off. Here’s why:

          15% Bracket $8,375 – $34,000
          25% Bracket $34,000 – $82,400

          Suppose person A makes 33,000 and person B makes 35,000:
          The way YOU say it here is the amount they make after taxes:

          A: 33000 * 0.85 = 28050
          B: 35000 * 0.75 = 26250

          So person A makes MORE than B after taxes?! I don’t think so! This is how it is really calculated:

          A: 8375 * 0.90 + 24625 * 0.85 = 28468.75
          B: 8375 * 0.90 + 25625 * 0.85 + 1000 * 0.75 = 30068.75

          So person B makes $1600 more than person A after taxes. This makes a lot more sense, as person B’s income was $2000 more than person A’s before taxes.

          • Anonymous says:

            Taxes are progressive, you only pay the amount of taxes that are above the amount for each bracket

  4. Dave Heideman says:

    Thanks !

    Your comment was a bit too short. Please go back and try again.

  5. P11D says:

    First and second actually, $8325 would be taxed at 10% and the remainder taxed at 15%.

  6. Trav says:

    If I made 210,000 as contractor in Iraq what is taxed, I understan if I stay there a year that the first 90,000 is tax free so does that mean I am taxed at the 33% tax bracket for the 120 that is left?

    • Roger says:

      This is incorrect.

      Correct is starting at salary of 120K taxed.

      But it goes like this. 90-178K taxed at 28% this is the 88K of the 120K

      the next 32K is taxed at 33%.

      This isn’t taking into account other deductions.

      • Trav says:

        You just lost me. I understand this part

        $120k falling in the 28% bracket.

        Shouldn’t that be reduced by $8,400 (head of household or 15%)?

        Then $111,600 taxed at 28%?

        • Jake says:

          You have to tax $111,600, yes.

          But look at this:

          10% Bracket $0 – $8,375
          15% Bracket $8,375 – $34,000
          25% Bracket $34,000 – $82,400
          28% Bracket $82,400 – $171,850

          So $8,375 is taxed at 10%, $25,625 (34000 minus 8375) is taxed at 15%, $48,400 (82400 minus 34000) is taxed at 25%, and the remaining $29,200 (111600 minus 82400) is taxed at 28%.

          So your total tax is:
          8375*.1 + 25625*.15 + 48400*.25 + 29200*.28 = $24,957.25

  7. anon says:

    $120,000 (assuming your accurate about the 90K part)
    - $8,375 (taxed 10%)
    = $111,625
    - $25625 (taxed 15%)
    = $86,000
    - $48,400 (taxed 25%)
    = $37,600 (remainder taxed 28%)

    Technically yes, you fall into the 28% tax bracket. However, your money isn’t all taxed at the 28% tax bracket. It would be broken down as above.

    I would check though about the tax free part. hard to believe uncle sam doesn’t want part of that.

    • Anonymous says:

      incorrect, you get taxed at the cumulative amount of all of your earnings at the end of the year.

  8. Dave says:

    So if i make 37,816 a year, the first $8375 would be taxed 10%, then from 8376 to 34,000 is taxed at 15% and then from 34,001 to 37,816 is taxed @ 25%?

    Another question I have is , if I work overtime (1.5 /hour), what is the tax on the overtime?

    Thanks for all your help

  9. RICH says:

    If I am going through divorce and my wife and i single and zero dependants.I am ordered to pay child support bi-weekly.When it comes time for tax return filing how should I claim the child support,since child is stilling with her mom/my ex to be ?thnx rich

    • Doug says:

      WHo claims the children on the tax return is normally decided by the court. Normally the one contributing the most to the childs support claims the deduction. SOmetimes it is decided that you rotate the deduction from year to year. Bottom line this is negotitated and becomes part of the decree. If you are still married but divorcing, you would file like last years past…jointly….after the divorce you both file single……..never marry again..I am a wise old man..

  10. RICH says:

    we both are filing single and zero dependants atleast i am ,not for sure if she changed anything in her tax status

    • JM says:

      You don’t claim the child support – it’s a POST tax payment, and tax free to the recipient (because you already paid taxes on it). Child support does not work the same as alimony with regards to taxes. The only thing you can claim is the child as a dependent – but both of you can not claim the same child – you’ll have to come to an agreement on who will claim her on their taxes.

  11. Scott says:

    My wife and I file jointly. I am an independent insurance agent. She is a school teacher. Our 2009 JOINT income was around $70K. Would it be more beneficial to file separatly for me to get in to the lower tax bracket? Looking for advice on how to save some money. Thank you.

    • Mouse says:

      Scott, it depends on if one of you makes considerably more than the other. If you make 60k and she makes 10k file jointly.

      If you could give me rough figures as to how much each makes individually, I can figure out what you should do.

      (You can say Person A makes amount and Person B makes amount if you don’t want to say who makes what).

      • Scott says:

        Thanks Mouse.

        Person A makes $29,000
        Person B is independently employed and makes roughly $55,000.

        We have 1 minor child and file jointly. Person B pays $3,000 a quarter to the IRS. Any help is appreciated.

  12. Rosemary416 says:

    Have a question. My 87 yr old mother has US savings bonds that have matured (are no longer earning interest). About $30,000 in taxable interest. Would you advise cashing them in this yr before the Bush Tax cuts expire? Or should we wait and just cash them in as needed as we have been doing? She would probably invest the money in CD’s so they would then at least be earning a little.

    • xcrapid says:

      If the bonds have matured and are no longer earning interest, then you should cash them in ASAP and re-invest. The principal on US savings bonds is not tax-deductible (except on a very select number of bonds) so there would be no tax consequences from cashing in matured bonds.

      Holding on to bonds past maturation date is never a good idea.

  13. Jason says:

    Trav, You are correct about the 1st 90K or so being tax free if you do 1 year and are physically in that country for 330 full days out of 365, full days meaning from 0001-2359. Travel days do not count towards that. Get on the IRS website for details of the publication. I know what question you were trying to ask because I had the same when I went over there for a year. After that 90K or so, your 1st non tax-free dollar will start in the 28% bracket, you don’t start back over like you haven’t made a dime for the year.

    Or you could always go the route of filling out an IRS form 2555 before you head over there which won’t take any taxes out during the year then when it’s time you file you pay what you owe. Hope this helps.

  14. Henry says:

    I actually have a question. I would like some help in calculating how much overtime I can work before being in another tax bracket. I’ve heard that one should try to remain working under a certain amount of hours otherwise the government is taking out a higher portion of your check vs spreading out the overtime. Is this true?

    • Jim says:

      There should be no difference between spreading out and bunching in your overtime as long as it’s all within the same year. If you spread it between years, then you might benefit from lower taxes but in general the timing of your earnings doesn’t affect your tax rate as much as how much you earn.

  15. j says:

    if currently we are (wife and i filingjointly) are at 53,000 per yr. thinking of getting another job that would bump us up to 68,000 or more… after they take 25% instead of the 15, how much of a difference does it really make on the paycheck?

    • xcrapid says:

      You only pay the 25% on the amount you make above $68,000. So if you end up making $70,000 that year, you only pay the 25% rate on the $2,000 ($70,000 – $68,000) above the 15% tax bracket.

      Also keep in mind that you are not taxed simply on gross income. You have deductions and exemptions you can take that lower your taxable income into a lower bracket.

  16. Wendi says:

    My husband makes ~$100k/year and I make ~$73k/year. We have just about maked out our 401ks and contribute to child care flex plan, have student loans and 1 child. What do you suggest is the best way for us to lower our tax burden to help keep us out of the higher tax bracket that would be most beneficial to us other than straight contributions? Real estate/land investments, etc.?

    • Doug says:

      Now is the time to consider a bigger home for a bigger write off. Look into tax free munis like Nuveen..pays you over 5% and is tax free. You still do not make enough for a complex plan to divert money tax free. But if your incomes continue to rise, having your invested money grow tax free is a good long term plan.

  17. Larry says:

    How much of social security is taxed and is income from dividends taxed?

    • xcrapid says:

      Income from dividends are taxed, but the rate depends on whether the dividend is qualified or not. Qualified dividends are taxed at a lower rate as opposed to Ordinary dividends.

      The amount of social security taxed is dependent on your filing status, how much you earn, and the dollar amount of benefits you receive.

      • Larry says:

        How do I determine if my dividends are qualified?

        • xcrapid says:

          At the end of the taxable year, your brokerage firm should send you a form with detailed information about dividends and capital gains/losses for the year. It should be identified on there.

          Generally, if you bought or sold the stock at least 60 days before or after it paid the dividend then the dividend is considered qualified.

  18. dave says:

    i want to cash in an ira early it 12,000 dollars what will i be taxed and as i understand it i will be hit with a 10% early withdrawal.

    • xcrapid says:

      If you can, I’d strongly suggest avoiding taking an early distribution on your IRA if necessary.

      The taxes/penalties paid can depend on what type of IRA it is (Simple IRA, Roth IRA, or regular IRA) and what the distribution is used for because sometimes a distribution is allowed to be taken penalty-free. Some examples are:

      1) Being permanently or totally disabled
      2) Paying for excess medical expenses
      3) In certain cases, buying a house

  19. mommag says:

    are these tax brackets based on gross income or taxable income.

  20. Monty says:

    If you take a large distribution from a 401k,how is that taxed. Let’s say a couple earns 124k with taxable amount being 85k and wants to take a 100k distribution.

    • xcrapid says:

      Depending on your age and circumstances, you may have to pay a penalty on your 401k distribution on top of income taxes.

      Assuming you are MFJ, using a standard 401k (not Roth) and your pre-distribution taxable income is 85k:

      Your new taxable would be 185k.

      185,000 – 137,300 = $47700 @ 28% = $13356
      137,300 – 85,000 = $52300 @ 25% = $13075

      You’d be paying $26431 on your $100000 distribution. This is a rough estimate. If you’re not yet 59 1/2 or using it for a qualified purpose (large medical expense, down payment on house) you’re also going to be subject to a 10% fee.

      If you have to take it, my advice to you would be to take only what you need, and to stay below a $52300 distribution because anything over that will be taxed at a higher rate.

  21. jer says:

    I receive about $24,000/yr (minus Medicare) in SSD benefits (not work related).
    If I take a distribution of my pension in one lump sum ($123,855) and currently pay no tax on SSD, which tax bracket do I use to calculate my tax burden ?

    • xcrapid says:

      The tax bracket you use depends on a lot of things. You need to take into account many other things, such as gains/losses from other investments, credits, exemptions, deductions, etc.

  22. John A. Camarillo says:

    We need to stop this…. the American workers in not ready to take on this burden.

  23. Jose says:

    Does the “married/filing jointly” mean only, both are working and filing with both incomes combined, or can it also mean, only one working but counting two, wife and I, on the tax return?

    In conjunction to the question; Do both of us have to be working to file jointly; and, if only one of us is working, does the unemployed spouse only count as a dependent?

    I am trying to forecast my finances and need this to be clarified to be accurate, any all information will greatly be appreciated.

    Thank you for your time and look forward to your reply,

    Jose

    • xcrapid says:

      MFJ does not require both spouses to be working. As long as you are married you are entitled to file MFJ regardless of your employment status.

      If you file MFJ, you will receive a bigger standard deduction than filing separate.

      If you are married, and only one person is working, filing MFJ allows you to claim 2 personal exemptions. One for yourself, and one for your wife regardless of whether she works or not.

  24. Anonymous says:

    i would like a yes or no not a yes and no do you have to file taxes if you are on ss and are 69 years old

    • xcrapid says:

      There are two things certain in life: death and taxes.

      If you are taking SS payments from the Gov’t you MUST file taxes.

  25. Bridget says:

    If we made 23,000 this year bring home pay and we use the standard deduction do we deduct that standard before using this table? Thanks.

    • xcrapid says:

      Yes you would use your standard deduction before applying these tax brackets. Your filing status will determine the amount of your standard deduction.

      In addition, you also get to deduction personal exemptions based on the number of filers/dependents in your household.


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