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2010 Federal Income Tax Brackets and Marginal Rates

This article was written by in Taxes. 6 comments.


Thanks to a low level of inflation, there won’t be too many changes to tax brackets and the standard deduction in 2010. I’ll keep this updated if the IRS decides to set the rates differently than outlined in this prediction, but chances are these will be the official brackets.

Remember that if you are “in the 29% tax bracket,” for example, you don’t owe 28% on all of your income. You owe that rate on only the income within that bracket. A misunderstanding of this concept often leads to people being afraid of earning enough money to enter the next bracket, with the belief that even $1 into the next bracket would dramatically increase the amount of tax due. Thankfully, the system does not work that way.

To lower your tax burden this year by up to $5,000, consider opening up an IRA (Individual Retirement Account). Mint.com has an IRA wizard that can show you what kind of IRA to open and where to open it.

Married individuals filing joint returns and surviving spouses

If Taxable Income Is: The Tax Is:
Not over $16,750 10% of the taxable income
Over $16,750 but not over $68,000 $1,675 plus 15% of the excess over $16,750
Over $68,000 but not over $137,300 $9,362.50 plus 25% of the excess over $68,000
Over $137,300 but not over $209,250 $26,687.50 plus 28% of the excess over $137,300
Over $209,250 but not over $373,650 $46,883.50 plus 33% of the excess over $209,250
Over $373,650 $101,085.50 plus 35% of the excess over $373,650

Heads of households

If Taxable Income Is: The Tax Is:
Not over $11,950 10% of the taxable income
Over $11,950 but not over $45,550 $1,195 plus 15% of the excess over $11,950
Over $45,550 but not over $117,650 $6,235 plus 25% of the excess over $45,550
Over $117,650 but not over $190,550 $24,260 plus 28% of the excess over $117,650
Over $190,550 but not over $373,650 $44,672 plus 33% of the excess over $190,550
Over $373,650 $105,095 plus 35% of the excess over $373,650

Unmarried individuals (other than surviving spouses and heads of households)

If Taxable Income Is: The Tax Is:
Not over $8,375 10% of the taxable income
Over $8,375 but not over $34,000 $837.50 plus 15% of the excess over $8,375
Over $34,000 but not over $82,400 $4,681.25 plus 25% of the excess over $34,000
Over $82,400 but not over $171,850 $16,781.25 plus 28% of the excess over $82,400
Over $171,850 but not over $373,650 $41,827.25 plus 33% of the excess over $171,850
Over $373,650 $108,421.30 plus 35% of the excess over $373,650

Married individuals filing separate returns

If Taxable Income Is: The Tax Is:
Not over $8,375 10% of the taxable income
Over $8,375 but not over $34,000 $837.50 plus 15% of the excess over $8,375
Over $34,000 but not over $68,650 $4,681.25 plus 25% of the excess over $34,000
Over $68,650 but not over $104,625 $13,343.75 plus 28% of the excess over $68,650
Over $104,625 but not over $186,825 $23,416.75 plus 33% of the excess over $104,625
Over $186,825 $50,542.75 plus 35% of the excess over $186,825

Updated October 24, 2011 and originally published September 22, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 6 comments… read them below or add one }

avatar David@DINKS Finance

I can’t help but throw this out there: A flat tax on consumption would lead to unprecedented prosperity in America.

I don’t know why we spend all the time, money, and effort to punish people for earning more money and making our economy more vibrant. Just blows my mind.

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avatar Apex

There are many arguments for a consumption tax. People get hung up on arguing about why its beneficial or why its not. If its good or not is irrelevent. Elimination of the income tax has zero chance of happening in any time frame that could benefit (or harm) anyone arguing for it.

You can’t even get any traction on a flat tax let alone a flat sales tax where it can so easily be used to vilianize rich people who need to spend far less of the disposible income. I can already hear the arguments …. Ya but ….. think of the investment it frees up, think about the foreign competitiveness of our companies, think about taxing the underground economy, think about …. blah blah blah.

None of that matters. You already have a strong sense among large parts of the populace and even larger parts of the congress that the rich don’t pay enough, that poor people can’t make it on what they have, that the curret tax code is too regressive and now you think you can get a tax code where as a percent of income it can easily be made to look more regressive.

Oh but wait, the first 36K is tax exempt and then you only have to tax 13% of income after that, its a good deal for everyone. Excuse me? How does that work? The sales tax magically defies the laws of mathematics? Or wait it must artificially grow the economy at like 20% a year or something right? The numbers just don’t add up. I have run the numbers. If you give a 36K exemption you can’t fund the government with a 30% flat sales tax. And of course you have to exempt houses from that, and probably cars, and once you start that who knows what else and then what tax rate do you need?

Pick your time frame. 5 years, 10 years, 20 years, 40 years. I will bet my entire net worth that it doesn’t happen.

However what may happen from everyone continuing to argue for it is that we get both. The current congress has already proposed a 1-3% national sales tax to pay for health care. You leave the income tax in place an put in place a small sales tax and who wants to bet in 40 years that the income tax continues to take 20% of income and the sales tax takes another 20.

Just stop it with the nonsense about replacing the income tax with a sales tax. It’s never going to happen, if you knew the details of what it would have to really look like to actually fund the government you probably wouldn’t want it, and you just might get both if you try hard enough. So please, stop it already.

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avatar jeff

You my friend have not done your homework like you said, if we had the FAIRtax system in place and the government would get their spending under control they would have plenty of money to fund the government, corporations would be comeing to the united states by the ship load to set up shop and hire americans, we could stop with the welfare and houseing assistance except for the elderly and disabled, people would have to run to mexico to keep from getting a job… and you say you run the numbers… you have the same argument as all the left wingers, and yes it would bring in all the tax money from the drug dealers and the rest of the mobs of people getting ill gotten gains. after all they have to spend it sometime or it isnt worth haveing…. read the book my friend then get back with me and then tell me as you so unintellegently said “blah blah blah”

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avatar Robert

Luckily (or not, however you want to look at it) I’m not in the highest few tax brackets :)

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avatar Audrey

We need a pro-growth agenda that urges congress and the Obama administration to enact policies that bring tax rates in line with our global competitors. We need to keep chipping away at the deficit by taking steps to control wasteful government spending. See http://www.friendsoftheuschamber.com/issues/index.cfm?ID=104

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avatar Darren

Good responses here. I know it is a political non-starter but, perhaps a small but permanent consumption tax could be levied on purchases specifically for national debt reduction. Call it “The United States debt reduction sales tax” of between 0 – 4% levied on all purchases not related to basic neccessities (ie. the tax would not apply to food, health insurance premiums, housing and rent payments, 95% of fuel purchases, etc.). The rate itself would change depending on what the percentage of the national debt was in relation to GDP. Therefore, the largest tax rate (4%) would be applied to purchases when the GDP was at or above 100% and, from there, would get progressively smaller as the debt decreased. Thus, when the debt was between 75 – 100% the rate would be 3%; between 50 – 75% the rate would be 2% and so on. Such a system would not impact the poor as much since the poor spend a large portion of their income on basic neccessities. I am a small busines owner and, aside from the topic of national debt reduction, the thing that galls me about our current system of taxation is that I have to spend a relatively large portion of my time and money just in figuring out what taxes I have to pay. I think it was stated by the CBO that American businesses spend between 300 – 500 billion dollars, each and every year, just figuring out what they have to pay in taxes. In addition, the size of the federal government (specifically the IRS) is somewhat related to our current income tax system. I think this, in part, is what makes the FAIR tax proposal so attractive. If you replaced the income tax system with some kind of progressive consumption tax then you immediately give American businesses back 300 – 500 billion dollars while decreasing the size of the federal government. The downside is that you immediately put a bunch of bookkeeper/accountants out of work and increase unemployment. That is a neccessary evil though. I am sure a large number of buggy whip manufacturers got put out of work when the automobile came along. (This is just an example to illustrate a point. Leather goods manufacturers saw a decrease in their incomes and shifted toward production of other goods that had higher demand.)

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