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Federal Tax Brackets 2010

Published 10/7/09 (Modified 6/17/11)
By MoneyBlueBook

Federal Tax Brackets 2010

Death and taxes. You can try to fight them both tooth and nail, but at the end of it all, it's a losing proposition. Especially when it comes to taxes, the government is going to want its fair share cut of your salary and business profits one way or another, whether you like it or not. Rather than engage in tax evasion and possibly live the remaining years of your life on the run as a tax fugitive from the long arm of the Internal Revenue Service (IRS), you might as well confront the issue of taxes head on. All we can do is try our best to understand how income taxes work and take reasonable steps to minimize their effects on our financial lives as much as possible.

One of the most introductory ways to plan for the effects of income taxes is to recognize how the various marginal rates are applied to the corresponding tax brackets. Because the United States does not yet currently engage in a flat tax system, our taxable incomes are broken down into different taxation ranges with specific taxation percentages assessed depending on where they fall along the tax bracket spectrum. Although our 2010 tax returns won't be filed until April 15, 2011, for planning purposes, it's always good to find out the new changes to the tax code as early as possible. Let's examine some of the upcoming tax rate changes that are being projected for 2010 and compare them to the previous year's 2009 tax brackets.

Projections Of New IRS Tax Rates Have Historically Been Extremely Accurate

Year after year, even before the official IRS income tax brackets are released, a select number of tax experts have gotten together and crunched a determinative number of officially released statistics by governmental agencies - to project and extrapolate the upcoming year's tax brackets. Year after year, the tax rate predictions released by these groups have yielded results in advance with near 100% accuracy. Such an income tax bracket projection ahead of time is possible because many of the major tax code numbers are pegged to officially released inflation statistics - including the standard deduction, the personal exemption, the actual income ranges of the tax brackets, and contributions limits for the investment retirement accounts (both the Traditional and Roth IRA account).

One of these tax prognosticating groups is the Tax Foundation, a Washington D.C. think tank which collects data and publishes research studies on federal and state tax policies. The other notable group operates under the auspices of the Wall Street Journal and is comprised of a merry band of private tax professionals and economists - namely William E. Massey, a senior tax analyst from the Tax and Accounting arm of Thomson Reuters; George Jones, a senior federal tax analyst from CCH; and James C. Young, an accounting professor from Northern Illinois University. For numerous years now, both the Tax Foundation and the Wall Street Journal group have consistently released to the public very accurate, albeit unofficial, early bird peaks at the following year's projected income tax brackets based on available financial data - well in advance of the official IRS releases. If you're eager to get a head start on tax year 2010, read on.

IRS Tax Rate Schedule Updates For Tax Year 2010

This year, citing a very sluggish economy and extraordinarily low inflation rates for 2009 to which upcoming 2010 tax rates shall be pegged to, the Tax Foundation and associated experts are predicting very little year to year change for the 2010 federal tax brackets. If there's anything good that came out of this global economic recession that has been plaguing us for the entirety of 2009 - it's that the combination of low gas prices, depressed consumer spending, and high jobless numbers with so many people filing for unemployment - have enabled inflation rates to stay quite low during the span of 2009 - at a mere 0.19%. Just compare that to the incredibly high inflation rate of 4.26% during the previous year of 2008 when gas prices were skyrocketing, and it's clear the recent sudden and precipitous drop in inflation has been extremely unprecedented.

As a result of low inflation, for the most part the 2010 tax bracket ranges will likely stay relatively unchanged. As noted by the tax pundits, for the very first time since the IRS started to index the official federal income tax rates to inflation during the mid 1980's, taxpayers will get virtually no significant benefit from inflation in 2010. As such - year 2010 tax brackets, standard deductions, personal exemptions, and even retirement account contribution limits will see very little (if any) alterations from prior year numbers.

I will update the table below to reflect the official IRS tax rates for 2010 if decidedly different numbers are ultimately released by the IRS. However, with tax bracket projections by the experts having enjoyed a near perfect accuracy rate for quite a few years now, I don't have any reason to doubt that the displayed figures below will ultimately wind up as official.

Federal Income Tax Brackets For 2010 - Based On Taxable Income Ranges

Tax Rate
Married Couples Filing Jointly
Most Single Filers
10% Not over $16,750 Not over $8,375
15% $16,750 – $68,000 $8,375 – $34,000
25% $68,000 – $137,300 $34,000 – $82,400
28% $137,300 – $209,250 $82,400 – $171,850
33% $209,250 – $373,650 $171,850 – $373,650
35% Over $373,650 Over $373,650

Beyond some slight numerical shuffling of the taxable income ranges, there will not be too many significant tax changes from 2009 into 2010. Here is a breakdown of the projected changes (if any) for 2010 as they compare to the prior year:

  • Personal Exemption: No change. For the very first time, the standard exemption for 2010 will not be going up and will stay unchanged at $3,650, the same as it was in 2009.
  • Standard Deduction: No change, except for Head Of Household filers. The standard deduction for married couples filing jointly will remain unchanged at $11,400. For those filing as single, the standard deduction will remain at $5,700 as well. However, Head of Household filers will see a slight increase by $50 - from $8,350 (year 2009) to $8,400 (year 2010).
  • Overall Tax Bracket Thresholds: Will increase across the board for all tax filing statuses, albeit at a significantly lower amount compared to past tax year increases.
  • Annual Gift Tax Exclusion Amount: No change. For tax year 2010, the current gift tax exclusion limit of $13,000 will stay the same. Often overlooked by most taxpayers, the gift tax stipulates that gift givers must pay a special tax on gift amounts that exceed a certain amount per year.
  • Traditional and Roth IRA Contribution Limits: No change. Despite the fact that IRA and Roth IRA contribution limits did not rise in 2009 in response to strong inflationary pressures in 2009, there will still be no corresponding change in the maximum contribution limits to individual retirement accounts for 2010. The standard IRA contribution limit for 2010 will remain unchanged at $5,000. The catch up contribution limit for those 50 or older will remain at $6,000 as well.

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436 Responses to “Federal Tax Brackets 2010 | Income Tax Brackets 2010 | Money Blue Book” 

  1. Pat C says:

    The problem here is that healthcare is tied to jobs. If you lose your job, and at least 10% of the population have due to the financial meltdown, you are screwed. Cobra is too expensive, how many people without an income can afford over $1500/month just for healthcare? If you forego insurance and have a medical emergency, then you are looking bankrupcy in the face. Those who can't pay their bills end up making insurance more expensive for the rest of us in the form of higher premiums to make up for the loses. How fair is that? Why not just have everyone pay a % of their income, say 2% as it is in New Zealand for care. Also, there are many people who work and pay taxes to help out the folks on Medicaid, but they can't afford healthcare insurance for themselves. The CEO of Anthem made 24K in bonuses for one year, and that wasn't even his actual wage. No wonder healthcare is ridiculously expensive!

  2. Pat C says:

    Regarding illegal immigration, I have yet to hear how the folks who hire illegals are being punished. Please send me that information. There will always be those who come to the US in search of a better life, just as all of our forefathers did. Unless of course, you are a Native American. As long as there are Americans who will exploit their cheap labor to cultivate their farms, gardens, work in factories, and take care of housework, there will always be an illegal problem. Whatever happened to the fence we paid millions of tax dollars to erect?

  3. TimT says:

    JVO,

    Comparing the 90%+ tax rates of the past to the tax rates today is comparing apples to oranges. Nearly everything was deductible under the old rates, so almost no one except Elvis Presley paid that rate. Now very little is deductible. So essentially "my hero" Reagan ushered in a near flat-tax.

    Now to debunk your other Marxist, wealth envy drivel. You say Reagan's tax cuts shifted the burden of taxes to the middle class. Not true. If you look it up, you'll notice the total percentage of taxes paid by the highest income earners has gone UP, not down. In fact, the top one percent pays nearly 40% of all income taxes. The bottom 47% pays NO income tax. The tax burden was NOT carried in this fashion by the evil rich in the 70's. Now, why do the rich pay more taxes now under a lower rate? Several reasons. One, as I said, a lot of deductions have gone away, especially when you factor in the AMT. Second, when your next dollar is taxed at 90%, you'll either a) decide not to bother earning that dollar, or b) hide the dollar from the tax man either legally or illegally. However if your next dollar is only taxed at 30 something percent, you don't bother trying to hide it.

    As for the 15% capital gains tax. You don't understand the concept of double taxation, do you. The company earns money. Some of that is profit and they pay corporate income taxes on it (the second highest corporate tax rate in the world, BTW, which is why all our companies are leaving the country). The money that is left is added to the company's value. This, by definition is a capital gain for the owners. Who then get taxed again.

    As for gigantic armies, wars, etc: did you know the ENTIRE war on terror (Iraq and Afghanistan) had consumed about $1 trillion between the time it started and the the time Bush left office? The "stimulus" act rammed through by your "sort of a God" Marxist-in-chief Obama spent nearly that much in one stroke of the pen. (And danged if that stimulus hasn't done exactly what he promised and kept the unemployment rate below 8%!)

    I'm glad you're proud to pay your taxes. Write them an even bigger check... I'm sure they'll take it. But your desire to be financially raped by an out of control Congress doesn't give you the right to use government force to make ME pay more to fund your little Marxist utopia. You can call me GREEDY if you like, but I'll point out two things: 1) Government is not charity; I'll choose to give my money away to people I deem need it, not some government hack paper-pusher. 2) What you call "greed" is enlightened self-interest in a free market. If everyone buys and sells goods voluntarily and tries to maximize the deal for themselves, everyone wins in the end. But I wouldn't expect a Marxist to understand that. To you it's strictly "to each according to his need, from each according to his ability". Nevermind that that philosophy destroys personal initiative and personal responsibility, and empowers some bureaucrat with the power to determine what to classify as a "need" and what to classify as an "ability" and gives him a gun to enforce his classification.

    You can see the end result of your Socialist / Marxist utopia playing out right now in Greece. Half the population works for the government. Everyone suckles at the government teat (you know, the "need" part). And there just aren't enough people with "ability" around to shoulder the load anymore. And Greece is only the first. Europe is about to be plunged back into the dark ages. I don't want to see that happen to the U.S. but you bunch of Statist-Marxists seem hell bent to make it happen.

  4. Josh says:

    Amen Tim

  5. John T. says:

    Brian: Well said. and Absolutely correct. JVO's comments are a perfect example of how the Dems use this class warfare crap to justify their socialistic agendas and brainwash people AWAY from America's core values of independence and self-reliance. and JVO is falling for it hook, line and sinker. Unfortunately he/she has ALOT of company in the USA in 2010. Take from the "rich", they're evil, and give it to those who didn't work for it. Creating a lazier and more dependent (on gov'ment)society as time goes on. It get harder and harder as time goes on to wean people away from "mother's milk". Some people just simply can't/won't see that.

    TimT: Beautfiul man, just Beautiful. That was almost poetic.
    I couldn't have said it better myself.

    JVO: If you are "proud" to pay your taxes to ever-bloated government who, EVEN AFTER taking all this money in, STILL can't balance its own checkbook YEAR AFTER YEAR, I'm sorry, but you:

    A: need your head examined. or

    B: are an uba-liberal idealogue on whom we are wasting our time trying to speak to in simple common sense terms. or

    C: Both .

    Probably both.

    Sorry.

  6. Andy says:

    It's interesting that while 2010 was similar to 2009, 2011 looks there will be big tax rises for higher income earners as the Bush era tax cuts are not extended. Sounds like it is better to be a mid-income earner in America.

  7. KenC says:

    Hopefully, in 2012 sanity, logic and reason will return to the White House...even better, with the proper effort this tear...sanity could be returned to Congress.

    Both parties are trash right now...I am marking my calendar for NOV 2 as "Throw out the trash" day!

  8. Legal Queen says:

    I seriously wonder with the upcoming tax hikes why I work so hard. I could live in a smaller house and be just as happy. But what will all the liberals do when I start acting like them - ie - I work less (and thus pay way less taxes)?

    Who is going to foot the bill when the smart people in this country start to downsize and kick back for awhile while waiting to vote for a good fiscall conservative?

    Anyone on here who wants to take more from the rich to give to the poor, please tell me the name of a country that had a socialist agenda that has survived more than 200 years as a socialist country and is doing well (no financial troubles and health care there is great - no one leaves the country for health care purposes - so don't name Canada or Saudi Arabia because people leave those countries in droves for purposes of health care)! If you can name that country, then maybe I will move and you won't have to worry about me voting for a fiscal conservative in the next election.

  9. Mosney says:

    We can debate about the role of government and the best tax system, but in the meantime, I see a lot of people around me wasting the money they do earn. The best way to thrive in the USA is to use what you keep after taxes wisely. Whether you're rich or poor...

    Save your money. Don't waste it on cigarettes, alcohol, candy, soda, fancy clothes, or anything else you don't really need. Make dinner at home, with your family. Borrow shareable items from your neighbors and family, and share your things with them. Carpool, take public transportation, ride a bike, or walk. Learn to enjoy a book from the library or a conversation with a friend. You don't _really_ need cable TV or movie rentals!

    If you get creative, you can think of many more ways to make your money go further. Once you have some savings, a lot of options open up. If you don't like the system, work to change it, but in the meantime, make the most of what you have.

    Good luck.

  10. Gus says:

    The government would have a lot more money (and less need to tax) if we could eliminate farm subsidies, most of which go to the largest landowners (thanks to their ability to pay for the best lobbyists). Yet Congress cannot even manage to pass payment limitations to these fat cats because, golly gee, what will happen to Congressional campaign contributions then? Make the connection between the way our system works now, and the way political campaigns are financed, folks, and you'll soon understand why we cannot dig ourselves out of this hole without campaign finance reform, which cannot and will not happen from inside the system because the people running the show have everything to lose, and nothing to gain, from any change. The least we should do is insist on knowing EXACTLY WHO paid, HOW MUCH, and on WHOSE behalf. Fine with me if we forget about limiting political contributions --that's hard to enforce and is perhaps more regulation than we'd like. But there ought to be COMPLETE TRANSPARENCY on the political dollar flow. Then and only then will we know the motives of each politico. Then and only then do we know who can be trusted with the machinery of government. Then and only then do we know who to vote out of office, and who to retain.

  11. Dongs says:

    Anyone who believes the rich are taxed too much at a mere 35% clearly do not understand the concept of society. If you make say $500k/yr you can surely afford to shell out $175k of that in taxes. Sorry you get stuck living on a mere $325k every year. I make no more than 20k per year after taxes and I'm barely squeezing by. I'm not complaining though, even though I drive a very old car(not by choice), live in low income housing, and have piles of student loan debt. I'm educated (so don't give me the 'you should have worked harder' speech) and choose to work in social services because I sincerely enjoy helping other people to live better lives.
    I work in social services and our funding comes directly from the state(your wallet), funding to the specific area I work in (mentally disabled adults) has been cut again. The people I work with could very easily be you or a loved one. Wouldn't you want the best care possible?? Of course you would. But that means you need to cough up more $$$ each paycheck. Try explaining to the individuals I work with that the reason they can't have the things the need/want is out of reach because a select group of people feel they are 'overburdened' by taxes.

  12. Josh says:

    Dongs:

    Please don't lecture others on how much of their own money is "enough" for them to keep. Worry about your own money.

    If you've been reading this blog you would know that most people aren't upset that they have to pay taxes its that the taxes they do pay are COMPLETELY WASTED by your employers. So then your employers have to ask for MORE and MORE and MORE of other peoples money.

    You are in a fairly unique situation in that you actually care for one of the few groups that actually deserves to be supported by others. But they don't get enough do they? And you don't make enough caring for them do you? I'm sure yuo don't and its a travesty. The government is going to spend over $3,500,000,000,000 this year. Doesn't that sound like more than enough to spend adequately to care for those that are unable to care for themselves? Sure, but since we are pissing away all of that money on political handouts and subsidizing the lives of the lazy there isn't much left over for you and your kind.

    So I know you mean well, but the answer is not to tell the person paying a couple hundred thousand dollars in taxes to stop whining. The answer is to tear up the blank check and use the trillions of dollars we collect in taxes on the people and things that are truly NEEDED not just wanted because its an easy way to buy votes....

    Somehow, someway, someday this country is going to have to stop voting with their bleeding hearts because they hear a story like yours and it makes them want to cry. They have to vote with their minds and realize that their vote for more government, more spending is hurting rather than helping this country and its citizens.

    But then again I must just be a Fascist who hates retarded people

  13. William says:

    I must be getting old I remember the day when people was ashamed to be on a goverment program.

  14. William says:

    I have been working on geneolgy of my family in 1878 my Great Grandfather arrived in America he was 27 . I assume that makes him a Irish American. He arrived in New York and relocated to Indiana. He later moved to Texas in 1889. He was a farmer by trade. He died at 56.
    My point is he raised nine kids without SS or SSI or Gov Handouts. No Food stamps no WIC, no housing assistance, no cell phone, no unemployment assistance, no utiliy assistance. No fannie mae.
    He had 250 acres and a 7 bedroom home no mortage and 2 years to complete the home.
    Life would be great if we could live like my Great Grandfather. A simple farmer

  15. Josh says:

    This is the slowest updated blog in the history of the Internet.

  16. Kelvin says:

    I have lived 10 years in a socialist country. In fact, socialist is an understatement. The more proper description would be communist or out-right criminal. A country where you can end up paying 80% of your earnings.

    The country I lived in is France. Only 30 years ago, it was in the top 5 greatest economies in the world. People worked hard and lived well. 30 socialist years later, it is virtually impossible to start a business and the average wages and living conditions have dropped severely. It is "normal" to live in a 350 sq. feet apartment in Paris, even as a couple.

    If you penalize hard working, money-making, entrepreneurs to reward (or pay) poor, less-working, less money-making people, that is exactly what you get. France is a country where you can make more money if you're unemployed rather than working. Today, it is hardly in the top 50 economies of the world, and living conditions are mediocre to say the least.

    A country, state, city or company's living conditions are only as great as its ability to create a product or service of value.

    The fastest, easiest way to destroy a country to penalize those that make it even possible to exist or survive.

    Also, I read quite a few notes above, talking about having to pay more if you make 50k or 100k etc.

    Being rich seems to mean making 50 or 100k a year. After Socialism has corrupted a country, rich is making over 20k a year.

    Before you go raving about Socialism, look at what it has done to some of the most prosperous nations. Look at the living conditions. Talk to the people there to see how run down they are by their government. Ask a few Scandinavians about their lives to see how ambitious they are, and you will see how Socialism has taken all hope from creating a business, the freedom of creating a business, to create something original that can be of use to others.

    Americans don't know how "lucky" they are for paying such "low" taxes. You only pay 35% for over 350k.

  17. Sigh says:

    All these people whining about how people in the higher tax brackets *deserve* to pay more are sickening.

    Higher tax brackets are a punishment for trying to succeed, the way they are laid out create what I can only describe as a "no-mans land" as your trying to make it.

    I'm in the 28% bracket and I an absolutely not "rich". I dont own anything, I rent, and saving for a downpayment is damn near impossible on my income.

    I support my family, mother in law, and a few animals (6). All this makes my monthly expenses very expensive, but I do it because I love my family and my pets.

    All you guys in the lower brackets, try this out and lets see how much you would like being taxed 28% on ANY income.

    Draw out a budget, 60% to all your monthly expenses AND your taxes if you were taxed 28%. Then *try* to save 10% for an emergency fund, 10% for savings, 10% for retirement, and 10% for entertainment.

    Some of you will see that you have to keep increasing your income to get out of a negative cashflow by trying to work this type of *recommended* budget. You have to increase your income so much in fact, that when you do find a positive cashflow, you have to raise your tax bracket again.

    A flat tax is more than fair. I have no doubts in my mind that the majority of people on welfare programs are more than capable of earning the money they get from these programs and more if they applied themselves. Theres more oppurtunities to make money in the toughest of situations than ever today.

    If you can walk your dog, shop at a grocery store or mall, and drive a car. There is no excuse to be unemployed and on some social program. I have worked a lot of awful jobs, I never tried to be picky. I took what was available, and only left when something better came up.

    I did everything I needed and more to get to where I am now, and you have absolutely no right to claim what I have worked and sacrificed for.

  18. Ryan says:

    Lots of opinions on both sides of this one

    Should the greedy rich pay more? or should the lazy poor work harder and stop complaining?

    I'm in the 25% bracket Plus 8% State Bracket Plus 7.5% Sales Tax Plus Fees and tax my on car, telephone and all utilities etc...so I'll guess maybe another 3%

    That equates to 43.5% of my Income and of course that does not include Government mandated car and health insurance costs so lets call it an even 50% low ball

    The average person probably works around 45 years, so in my case 22.5 years of my production is claimed by government enforced with the threat of violence.

    Anyone who thinks that income taxes are not collected by violence I challenge you to think about why you pay your taxes and if your answer is because of some social obligation then I'll ask how many times you have voluntarily written a check to the IRS.

    The only reason you pay your taxes is because if you don't you will be hauled off to jail at the point of a gun. Tax on labor is immoral period.

    If you reply to this post please don't ignore the violence. "The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing." - Albert Einstein'

  19. KenC says:

    Ryan...you forgot about payroll taxes for Social Security and Medicare that are then taxed again when you start receiving them...plus the matching funds that the employer must kick in.

    And I love the people that use the term "greedy rich" instead of the term "successful through their own labor and/or ingenuity"...People are only "greedy rich" to the lazy parasites that want to live off of their efforts of others.

    No let's talk about the real "GREEDY" rich...the government. Government does not produce one red cent of income through its own efforts...it only takes from others and uses it to buy votes!

  20. Jess says:

    William - if your genealogy, did you happen to research the historical context of your great-grandfather's life? Just because he made it without government handouts didn't mean he did everything by himself. Farmers then were in much the same position as they are now - constantly indebted to private lenders. Your great-grandfather probably had a home and land DESPITE being a farmer, not because of it. All it takes is one bad harvest or natural disaster to wipe out your income for the year, at which point you are forced to borrow again (a cycle that on a farmer's salary can sometimes be impossible to exit). That land was cheap in the 19th century because it had recently been seized from indigenous peoples at no or low cost to new "owners."

    Your romanticism of a "simpler" time is misguided. Life has never been simple nor easy, not for anyone.

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