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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. DSB says:

    To all tho's who think the 15% bracket should set their standards higher by going back to college and get a better degree. That is a good thought but then again who is going to fry your burger wash your clothes clean your house drive you to work. It takes tho's people working for a smaller income to keep the world turning. I am not saying raise the rich to a higher bracket but lets not forget tho's that worker that stands behind a grill all day long so we can have a nice meal. Or tho's that press our clothes so we don't have to. I am thankful for the 15% bracket.

  2. monkeyfurball says:

    Check this out: In 2009 I was in the top 35% tax bracket(actually the last 9 years I have been in that bracket). I live in MN where I pay another 8% on my taxable income. I also pay a few thousand in AMT and the tax law disallows my personal exemptions for wife and kids. I also lose a few thousand in itemized deductions because I make over $300,000. All told, I estimate my top tax bracket is about 55%. And......this is with the so called "Bush tax cuts" lol. Can't wait for socialist obama and his lemming democrats to raise the tax brackets even higher. What a pathetic lot they are.

  3. CK says:

    I work a part-time job and I WANT federal taxes taken out of my weekly check. But they say that I am not in the bracket to have any taken out. I am trying to get it changed over to zero on my filling status. Cause I am afraid that by the end of the year I will be the one paying due to thier mistake. (NICELY PUT)

  4. Marci says:

    Josh, I wish you would send your recent commentary regarding how to create jobs in this country to your local Republican Congressman and Senators. If you don't mind, I will be sending your commentary to mine!

  5. Josh says:

    Thanks Marci.

    I actually did send that along to the House Republican Leadership. My specific Reps and Senators wouldn't really care for this message. Took a shot on the House Leadership but I'm not holding my breath. Expect to get some form letter back and continue to watch them flounder with their message like they have for the last 20 years.

    Hopefully you will have better luck!

    Josh

  6. Aimee says:

    i made the same amount of money this year as i did last year and im getting less money back then the year before.i got just a little over 7,000 last year and i am only getting 4,000 this year and nothing has changed on my end,its Because some idiot wanted to change things and that messed it up for everyone.i count on my tax return every year to get the things my children need.the new tax rules are bs!what the hell is obama thinking?

  7. Derek says:

    Get over the high tax rates...

    The majority of American's complain about what they can't have and they overspend and put themselves into massive debt, yes it sucks for the ones of us who can live within our means and work for a living but that's all part of this grand scheme.

    The rich will never get taxed to hell and back, Republican's say they will increase taxes and help the rich, the Democrats take the rich peoples money just as much and act innocent. They are equally guilty, think about who your political head figures are friends with, it's not the plumber down the road or the manager of your local gas station.

    Then to mention we give out section 8, welfare, food stamps like they are free... But not if you are a single man raising 2 kids... On the other hand I know multiple women who waste the little money they do make on booze and drugs raising 2 kids home free paid for by our wonderful government, why work when you don't have to?

    I'm 26 and I'll make about 44k this year, it's not horrible but I used to think it wasn't a bad amount of money. I drive a '02 BMW and have a motorcycle I ride during the spring and summer, I take vacations, go places and buy basically whatever I feel like I want. I budget my money well, pay my bills and save money.

    IMO, this country is screwed there are too many bleeding hearts, too many people that don't care and too much power and nearly nobody to even consider stepping up to it, this previous health care bill was proof of that.

    I myself? I'm planning on moving to the Netherlands after grad school where there is a much higher tax rate and half of the issues and corruption in the government.

  8. Michael says:

    In a capitalist economy, people who are rich and successful have earned it (besides the few people like Paris Hilton who were born wealthy etc.). It isn't fair for an entrepreneur to work his/her ass off for years but then get the shit taxed out of them when they can finally enjoy their success.

  9. GrannyBG says:

    Another misunderstanding I just noticed. That somehow "the wealthy" create jobs for us poor folk, when it is actually small businesses that do most of the job creation. The small businesses that are getting tax breaks this year & hopefully some stimulus money soon.

    Stimulus: I saw some people poo pooing it here. They don't realize this was not Obama's solution : it was the solution of all major economists because we were about to go into complete economic free fall. Most of the disagreement amongst them was that some didn't think it was enough to pull us out!

    Good news about the Bank Bailout: the biggest ones have paid it back.

  10. Marci says:

    Dear GrannyGB,

    At least one bank is not paying the money back. It is a sham transaction. The Federal Reserve bought some of Bank of America's assets - so the Fed gave more money to the bank and the bank gave bad assets and the money back to the fed. Nothing changed except a ridiculous bailout for an organization that should have been run better and should have been allowed to fail. And now, our government has more bad assets on their books and BofA is doing much better. I hate BofA for this transaction and won't ever be their customer. I hate our President for allowing such a sham to occur and then having the arrogance to brag about it - thinking that most of the American people are too stupid to see the truth.

    My husband and I checked and re-checked that our bank DID NOT get bail out money. If they did, we would have switched.

    As for China influencing our elections, you are wrong. Read the Supreme Court decision. You and the President can try all you want to make his state of the union speech seem true, but they are not. Read the Supreme Court decision. Also, it is amusing that you want to "worry" about something that is not true and at the same time bash the Supreme Court for upholding free speech, when you are on a message board using your free speech rights!

  11. Josh says:

    Russ - An interesting question you raise about whether on not politicians should do what the people want or what they believe is "right". As a rule, I believe our elected officials should always do what the voters demand of them. If you don't believe in that, then you shouldn't live in this country. However, you use as an example (TARP), probably the one exception that proves this rule. As a Conservative, something like TARP is anathema to me. As it is to Liberals who never want to help "Wall Street" over "Main Street". This universal disdain for TARP is probably why I begrudgingly supported its use and actually view it as a moderate success as of now. The suddenness and ferocity of the credit market collapse was (hopefully) a unique issue that required (hopefully) a unique solution. TARP was a success, in my opinion, because it did calm the market and bring liquidity to an area in desperate need of it. What would have happened without it? Unknown, but it could have been much worse than it is now. But its real success was that it was treated, for the most part, like a true "loan" from the taxpayers rather than a hand-out. Half of the money has actually been paid back with interest! I never thought that would happen. Who hasn't paid it back? Well Fannie, Freddie, AIG, Chrysler and GM. That money is gone, never to be recovered. That, especially the UAW hand-outs (OK, maybe it wasn't from TARP, but same principle) was a horrible deal. But for probably a net cost of lets call it $350B, we averted a true "Depression". Probably as a good a deal as you'll get with the Federal government being involved. Now the fact that Obama want to take the money WE ACTUALLY GOT PAID BACK and use it on more handouts is infuriating to me but that's another rant…..

    So, to your original question, why is going against the people's will with TARP OK, but it's not OK to Socialize the healthcare industry against the will of the people? Or pass a Global Warming Energy Tax against the will of the people? Or pass Illegal Alien Amnesty against the will of the people? Well those are purely partisan issues. When only one party thinks it's a good idea, and the public is against it, well they are the deciding, and most important vote. TARP was hated by all, which probably meant there was some good in it somewhere…………..

  12. Disbro says:

    # Gwen Says:
    October 7th, 2009 at 9:30 pm

    Those of you rich folks in the top 35% tax bracket need to stop whining. You don't get to whine. I hope this administration taxes the beejesus out of you all…it's time you paid your fair share and get with the program. It's only fair the wealthy pay more out of their millions and billions of dollars to subsidize the rest of us who need it the most. We are struggling in this recession and it's time to fix the problem – by taxing the rich!

    *****************
    This is insanity. If you are not working 17 hour days, 7 days a week and busting your hump to make whatever amount of money you make, then it's all mine, not yours. It's not my responsibility to lift you up, get your A$$ up off the couch, put down the remote and get to work. I am a self made person who has paid my dues for 22 years with the work ethic mentioned above, anything less than that doesn't get my attention. Socialism is not what the USA was built on, if that's what you want, you need to move. Please.

  13. Josh says:

    Well Russ, obviously I'm a Socialist because I think TARP did help stabilize the economy. I never even knew myself how "big government" I was. But I still say short term loans to stabilize capital markets are much better than handouts that we will never see again (Stimulus debate anyone?). I'd hate to see where the Dow would be today if BOA or CIti (or both) failed and people making $250k a year with great credit couldn't get a loan without a gun and rubber mask.

    We'll agree to disagree.

  14. Russ says:

    Well, Josh, if you wish to proclaim yourself an obvious Socialist you are free to do so. It is still a quasi free country.

  15. ogli says:

    The problem as I've seen is that too much of our wealth is being redistributed out of country.Working class people are being hit from every angle.Manufacturing jobs are sent
    overseas to procure a small additional profit,illegal immigrants flood the country to work in so called"jobs americans don't want ",IT jobs that were supposed to replace displaced manufacturing jobs quickly evaporated to India.Americans can't consume what they can,t afford without decent paying jobs that our government and business seem hell bent on removing from our shores. We send China our jobs,their economy and standard of living explodes-our economy stagnates,energy prices explode because of new markets and we borrow money from a communist country to float our sagging economy due to cash flow problems created by our government so we keep buyiny goods kept at artificially low prices due to undervalued currencies and th cycle perpetuates itself.I don't mind paying a higher tax rate if I know it is being used wisely and produces a better standard of living for us.

  16. Kevin Mc says:

    Do any of you WHINERS know how to do simple math???? This country rewards innovation, hard work, and risk taking (of their own money). EVERYONE has educational opportunities. I'm sick of listening to the victim mentality of individual who goofed off in high school, didn't attend college, and now they are they are suddenly victims of those who worked their tails off to become successful.
    With the multitude of deductions for dependents, property taxes, child care, earned income credit, tuition, education, etc. etc. etc. those with small incomes pay a TINY amount of taxes, often less than $5,000 per year. I know, I HAVE BEEN THERE, DONE THAT! I have also worked my a$$ off for 32 years and worked my way up. What's the reward???? NOW, I get to pay over $32,000 per year in Federal income taxes, plus 7% for social security, plus medicare, plus 8.25% sales tax, plus $4,500 property tax, plus a tax on every other bill....electricity, telephone, gasoline, etc. I am paying well over 50% of my income in taxes to 'help" those who chose NOT to seek an education. I HAVE ZERO SYMPATHY FOR THEM!!!!

  17. 18 HRs again says:

    KenC

    Thanks for your sacrifice we can all be proud of your commitment.

    ...as for Gwen,

    People paying at the 35% tax bracket are providing jobs and taking risks to start up businesses. In some cases having worked 18 hour days for 20 plus years(or more). The US is a great land of opportunity. Many of the folks preaching "tax the rich" (as an answer) come from a mind set that wealthy people don't deserve to succeed. When and if the majority of Americans share Gwens opinion then two things come to mind.

    1)The wealthy will simply leave the US and so will their money, jobs and tax revenue.
    2)The brightest and best (who have no money now) will no longer locate in the US to get ahead....loss of human capitol. Loss of future brilliance=future money, jobs and tax revenue...as they succeed elsewhere!

    I'm going to end this at that....and have a beer in KenC's honor.

    Respectfully,

    18 HRs again

  18. Republicans Are Greedy says:

    KenC, you should have worked as hard trying to read a book as opposed to being a soldier and probably another uneducated blue collar worker. Thanks for your service, but you helped support a country run by the highest bidder whose sole intention is to take the most money possible without having to give out very much.America stopped being the land of opportunity and turned into a national casino the day greedy old white men got the upper hand. Pay employees what they are truly worth and taxes won't be such a big deal, unless of course you're a greedy old white man as well.

  19. Oldbird says:

    Thank you MiddleClassSingleMom! ! We're supposed to be talking tax brackets not personal behavior. We have to fund our government - what's the fairest way.

    BTW- Fair means EVERYONE is treated the same.

    Here's the latest point from the FairTax site-

    "More than a billion dollars a year is spent lobbying the tax code. Washington lobbyists are so successful as tax lobbyists that the hallway outside the House Ways and Means Committee room is called, "Gucci Gulch" because of the expensive shoes typically worn there. Tax committee staff and retired or defeated members can see six and seven figure "signing bonuses" when they move from Capitol Hill to a "K St" tax lobby firm. The FairTax ends this corruption by closing all the loopholes."

    Read the FAQ's on the FairTax site to understand how it's designed.

  20. KenC says:

    Josh..thank you. And as to Fair Tax...the only fair tax is a tax that is levied on everybody equally (none of this "fair share" BS where one is charged by what they can afford). The only fair tax is one that is charged at an = % so that everybody knows what it's like to pay taxes. get rid of payroll deductions, turn Social Security back into what it was supposed to be at conception and limit the Federal Government's right to spend to national security, sealing our borders and meaningful interstate business, help for those who truly need it (ie: the lame not the lazy - slavery ended over 225 years ago). The rest is up to individual states...that way, if you don't like the way the state governs things and/or spends you money and can't change it, you can at least move to a different state without leaving the country. Illegal means illegal...not undocumented. The USA was built on assimilation...not false hyphenated cultural identification and separation.

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