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Official 2014 IRS Tax Brackets (Marginal Tax Brackets)

Every year the IRS has to adjust its income tax brackets to account for the slow and steady creep of inflation. Because official measures of inflation slowed to a crawl for much of 2013, the 2014 tax brackets look pretty similar to last year’s.

This year’s federal tax brackets reflect the results of a compromise deal to extend most of the Bush tax cuts that was enacted in January of 2013. While tax rates remained flat for most taxpayers, those earning more than $406,750 for single filers or $457,600 for married couples filing jointly will now find themselves in the highest tax bracket of 39.6 percent.

If you’re looking for the 2013 tax brackets, that is, the brackets that will be in effect when you file your taxes, you can find them at here [3].

2014 Official Tax Brackets

Tax Bracket Single Married Filing Jointly Head of Household
10% Bracket $0 – $9,075 $0 – $18,150 $0 – $12,950
15% Bracket $9,076 – $36,900 $18,151 – $73,800 $12,951 – $49,400
25% Bracket $36,901 – $89,350 $73,801 – $148,850 $49,401 – $127,550
28% Bracket $89,351 – $186,350 $148,851 – $226,850 $127,551 – $206,600
33% Bracket $186,2351 – $405,100 $226,851 – $405,100 $206,601 – $405,100
35% Bracket $405,101 – $406,750 $405,101 – $457,600 $405,101 – $432,200
39.6% Bracket $406,751+ $457,601+ $432,201+

Investment Tax Rates

The long-term capital gain tax rate is 10 percent for taxpayers in the 15 percent tax bracket and below, 15 percent for those in the 25 percent to 33 percent tax brackets, and 20 percent for those in the highest income tax bracket. Long term capital gains rates and dividend rates remain tied (dividends were set to increase to ordinary income rates).

Other notable tax changes

The personal exemption that taxpayers can deduct from their taxable income rose to $3,950, a $50 increase from the 2013 exemption of $3,900. As always, that exemption is subject to a phaseout, which will begin at adjusted gross incomes of $254,200, or $305,050 for married couples filing jointly, up from $250,000 and $300,000 last year, respectively. The exemption phases out completely at $376,700, or $427,550 for married couples filing jointly, up from $372,500 and $422,500 last year.

Tax bills for some same-sex couples rise

Thanks to a Supreme Court ruling [4] that struck down a central part of the Defense of Marriage Act, married same-sex couples must now file as either married filing jointly or married filing separately. For gay couples where each partner makes approximately the same income, though, that equality comes at a cost — many will now have to pay the so-called “marriage penalty” that generally results in higher taxes for married folks than for singles.

Same-sex couples who would save money by doing so may want to take a look back at previous tax returns and file an amended return that reflects their married status.

(Photo: kozumel [5])