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. TimT says:

    The looters and moochers who whine about "the rich" also forget that most taxes don't tax wealth, they tax income. If I was worth $10 million and kept the money in a non-interest bearing account, my income would be zero. I would owe no taxes. No, the income tax punishes people who are *trying* to become rich.

    I'm working my ass off with a full time job and renting out my investment properties to losers that won't pay their rent so I can retire early. But the damn government comes along and steals most of what I have left after my bills.

    Yet people who spend all their money on DVD's, flat screen TV's, iPhones, and flashy cars, then get in debt to their eyeballs to buy more whine that they can't "afford" health insurance and point to me to pay for it. (You're "rich"... you have rental properties.)

    Yeah, I'm pissed. I think the producers need to go on strike like in Atlas Shrugged.

  2. Glenn says:

    So, wouldn't a consumption tax be the most equitable method of paying to live in this great country. If you buy more, you pay more, and conversely if you buy less you pay less. Those who aren't paying any tax or less than they owe would end up paying more of their fair share, i.e. people engaged in illegal activities who don't report that money to the IRS, people who can shelter most of their income or people who are just dishonest when they file their taxes,
    A parting shot... for a rule of thumb regarding a government solution to social and economic issues; "Anything you subsidize you have more of and anything you penalize you have less of". Sounds pretty mundane, but apply that principal to the federal solutions to our growing number of poor or declining number of financially secure.

  3. Greg says:

    When I think about the tax situation, and the political situation, my feelings can be summed up easily. I ask you to ask yourself but one question, folks:

    "Who's responsibility is it to take care of ME and MY FAMILY?"

    Your answer to this question will resonate volumes about yourself.

    My answer to this question, is, of course, "It's MY responsibility, not OBAMA'S!"

    Dear OBAMA: :LEAVE ME AND MY FAMILY ALONE!

  4. Duh says:

    It appears that stupidity and greed are running rampant. There is a reason the rich are taxed more…they can still put food on the table if they lose an extra 10%. You're rich and you think you work hard? Try cleaning toilets, digging ditches, or picking up garbage. That's hard work too.

    If all the heavily taxed are so unhappy and things are so bad, why haven't they left?... Gone to another country where you'll be able to prosper and pay less taxes. Wait a minute, no such place exists! Part of your taxes is for the right to own your own business and / or work the job you do that enables you to make better money than most of the world.

    No one is ever happy. You make 10's of thousands, you want 100's. You make 100's, you want millions. It's never enough. Again, if you're unhappy, leave. I'd rather not have to listen to the whining.

    Additionally, a flat tax rate is idiotic. You have people making minimum wage that you want to pay higher taxes? Can you be that dumb? I know, they are the "uneducated idiots" right? I suppose you don't realize the teachers that gave you the education you have were mostly making 40k or less. Not everyone can be a tycoon unless you don't mind an absence of roads and a big pile of garbage outside your house. Society needs everyone. Not only are you content not in letting others do your NECESSARY and unwanted jobs, but you're plenty happy giving them more of a tax burden too. Absurd. To everyone complaining about their taxes….I award all of you no points, and may god have mercy on your soul.

    And by the way, just because you're paying lower taxes doesn't mean that you think it's someone else's responsibility to take care of your family. I pay lower taxes and take care of my family just fine.

  5. Duh says:

    …and as a side note, the reason the consumption tax doesn't work is because rich people spend a smaller percentage of their income. You might make a million and only spend 100k. Conversely, if you're making 50k, you'll probably spend almost all your income to support your family. What ends up happening is the people in the middle pay all their income as tax while the people on the upper end only pay a small chunk of their net value. This leaves the upper end with more money (earning interest). This is why the rich love this system and the middle class hate it.

  6. Russ says:

    Frankly, when it comes to taxes, I'm not interested in what's fair. I'm only interested in what's Constitutional! And what we have is not constitutional.

    A national sales tax, or value added tax, would be acceptable within the structure of the Constitution. But would never get passed because we must consume, consume. Keeps our dollars heading out of the country for lower priced goods. So the country who exports to us can buy our debt with own (mostly borrowed) dollars. Kind of like the politicians buying our votes with our own tax money. That's why they call it a system.

    I bet most people here are paying more as a percentage in taxes and surcharges (a fancy word for tax) for their cell phones than their effective federal income tax rate. Same could be said for the credit card interest rates.

  7. Glenn says:

    So many people are hung up on the idea that we must make the successful or lucky pay for everyone else. The comment that the percentage of income collected from lower income people, using a consumption tax, is unfair because it is a higher percentage comparitively, is still based on the idea that if you have more you owe me more. Everyone owes something for living here, there are plenty of programs to help people who are in need. For an analogy - this should draw some fire - Consider a campground, a nice one, with all the stuff. To stay in that campground, everyone must pay a fee, however lets say for all the extras there is a charge. Things like the swimming pool, the arcade, the convention areas, the tennis court, etc. You can only do the things you can afford so that is in your control of cost, but you have paid your fee to be there and enjoy the basic amenities like the showers, grills, visiting with your neighbors, taking a walk etc. If you want to enjoy something you cannot afford, I don't believe the guy in the next spot should not be forced to pay for it. If he wants to that is fine but he doesn't owe it to you or me.

  8. Josh says:

    Duh.....

    It's been said many times, but I guess it needs to be said again. The vast majority of people here aren't "complaining" about paying more money than "poor" people. Under all tax plans (progressive, flat, sales, etc) that would be the case, and should be. What we (and hopefully the public at large) are complaining about is the massive amount of government waste of those tax dollars. The government creates this perpetual underclass that develops an obscene sense of entitlement and never develops any semblence of accountability or self-reliance. You say you dont make a lot and take care of your family just fine. Kudos to you! I wish there were a lot more like you...

    And for what its worth, both a flat tax or sales (consumption) tax would come with huge exemptions (like 50k) so that the garbage men and teachers you are defending would pay nothing (just like they pay now). The benefit of these plans is in ENCOURAGES risk taking and investment (which is actually what creates jobs, not government "stimulus") rather than DISCOURAGING it.

    But I guess I must be idiotic, stupid and..what else? Oh yeah....greedy.

  9. TimT says:

    Hey "Duh",

    It's nice of you to declare that since rich people make more they can afford to pay more. But you are a Looter. YOU decide that "something" should be done by government and YOU decide that SOMEONE ELSE must pay for it. Did you know that the top 1% of income earners pay almost 40% of the income tax? But they only make ~30% of the income? So you tell me, how much of their income do you want to steal before you think it's fair? 50%? 60%? All of it?

    Rich people don't stick their money under their mattresses. They invest it or spend it. If they invest it, it provides capital for more production and more jobs. If they spend it, it provides capital for more production and more jobs.

    Think of all the non-government jobs you've ever had (if you've ever actually had one). Have you ever been employed by a poor person?

    The current tax situation is very unfair. We've got almost 50% of the population that pays NO federal income tax. The tax rate of many is negative since they receive "refundable" tax credits. (There's an Orwellian term for you.) But they get to vote. How long do you think it'll be when that crosses 50%? Sort of like two wolves and a sheep voting on what's for dinner....

  10. oldbird says:

    Taking from everyone according to their ability and giving to everyone according to their need is the definition of Socialism... go to Cuba and see how it works - - Duh!

  11. getoffyourlazyarses says:

    Effort+gumption+determination=reward. I'm a guy with barely a high school education that has made it big and I wasn't born with it and I didn't steal it. All you whiny poor people should get off your dead ass and go out and make something happen so you don't have to rely on Odrama to feed you.

  12. Vorsten Vigard says:

    Based upon the somewhat certain passage of healthcare, the 35% tax rate will most likely climb to 40-42 percent. Personal deductions will also be phased out for anyone earning over 200,000 now deemed rich.

    I cashed out my IRA and paid the penalty, as my marginal rate pushed to 33% with the penalty, I am still ahead of the 'game'

  13. pawanna says:

    No one should have to pay 35% or more in Federal Income Tax. The whole system should be done away with. Even those who pay no income tax can afford beer and cigarettes. We should have a consumption flat tax. Everyone should pay their fair share if it's a $1.00 or $20,000. ! No poor person has ever created a job.

  14. bochmann says:

    josh....well said, all of it!

  15. Madonna says:

    Gwen, why do you think you are entitled to anyone's monies? I am not rich...but you keep your monies and I will keep mine. I work for it...as does the rich. Who do you think gave you your job?

  16. Madonna says:

    The only thing the Dems do well is taking from those that have and giving away...not necessarily to those that don't have...just to maintain those that are now beholdin' to them.

  17. Doug L says:

    I'm in the 28% tax bracket and I'm not happy about it. Everyone says tax the rich but the government isnt really taxing the rich. The IRS is taxing people like me and you that have work hard to get some where but just barely make it by reguardless of our income. The more we make the more we pay. I make a dollar the IRS gets 28 cents now i have .72 of my dollar. The state takes iTs 6% so now i have .66. Then there's property taxes on my car and house. If I go out to eat i pay another 10% on my .66 i had left over from the state and federal tax. Sooner of later I'll figure out that it is more productive to not work and live off the welfare of the rich (those of you with a job). A flat sales tax would be fair because if you sp.end money you will pay tax on what you spend. IE Big spender = big tax payer. Lets get real about that the laws are made buy people that are out of touch with the average american. There interest is not whats good for the USA but what will keep them in office. As you can all see by recent events, if your in the good old boy group like wall street and the bankers then you will be rewarded for screwing the american public out of every nickel you can get. Also once you screw them we will reward you with a bailout from the very people that you cheated and destroyed. Dont worry wall street the little guy will have to keep paying for you greed as long as the fox(politicians) is in the hen house(the country). Maybe if we put term limits on house and senate of 4 to 8 years then the country will change its ways. Our next great turning point for the average joe will be the health care bill. Medicare is a joke being ripped off for billions every year...that right billions..and now the politicians think they can run a health care system for the country when they couldnt even run it for a small group of people. If you don't think your taxes will not increase to around 50% of your check for the federal portion in the next 10 years then you had better wake up. In the long run it maybe cheaper for me to pay a fine and be uninsured untill i get sick then pay for insurance. Like I said before, sooner or later I'll be better of if I just don't work at all an let the rich(people with jobs) pay my way.

  18. That guy says:

    Alot of irrational comments being posted here, as well some good debate (which is nice for a change) . Initially, I was a bit shocked to see how many people want to tax the hell out of the "rich." Most people in the 28-33% are not rich and have worked their asses off to get there as well.

    Do you really think I deserve to be taxed EVEN MORE because my ambition is greater than yours? I didn't get lucky nor was I born into this - I just used my brain & worked harder than anyone else I know/have ever met. I work for every single penny of it - and I deserve every single penny of it. I have no intention of being greedy with my money - quite the contrary. I don't need some idiot telling me what should happen to my money. I don't mind paying the taxes at the current rate, that is okay with me - my concern is the people who believe that I should be paying more because i've surpassed them.

    If you were sitting in my position - you may not even be as close to as humble as I am. I don't care for fast cars, big houses, formal gatherings where you throw around big names to feel important, or anything of the sort.

    So if you're angry at me for being where I am today in my 20ish years of life because I worked hard for it - from the ground up - this applies to you:
    My ambition is greater than yours - my will exceeds that of yours by 10x - in fact, I don't like people like you and I will surpass you in every single way possible.

    Instead of sitting around complaining - gear that energy towards something positive and bring about a change in your life. Being bitter will take you no where.

  19. Josh says:

    Now is our chance!

    A lot people (like me) complaiing about the Trillions of dollars of wasteful spending and tax increases headed our way. I thought we would have to wait until November to try and stop it and by then most of the damage would be done.

    But we can stop it next Tuesday, January 19th. Scott Brown has a REAL chance of winning Ted Kennedy's seat and ending the Dem's Supermajority in the Senate. I can't believe a Republican could get elected in the Bluest of Blue states a year after the "Obama Revolution". It's mind boggling. What a difference a year makes!

    So if you live in Mass, please get out to vote and bring along a dozen of your closest friends.

    If you KNOW someone in Mass please do all you can to convince them to get out and vote for Brown.

    One Senator can stop Cap and Trade, Amnesty for 20+ Million illegals, Card Check and possibly even the Health Care monstrosity.

    Change You Can Beleive In!

  20. Nick says:

    Here's some fun facts for the fiscal conservatives out there:

    For the past 100 years, the AVERAGE income tax rate has been around 54%. Much higher than even the highest tax bracket currently.

    From 1954 -1963, the highest tax rate was 91%. That's right, if you made over $400k in that time period (which is equivalent to $3.1 million 2008 dollars) then you sent 91% of it to Uncle Sam. Not a lot of money when you think of the Bill Gates and Warren Buffets of the world. Still, there was a little thing called the Cold War going on that the government felt we should finance. Then there was also the recently passed GI Bill for our soldiers coming home from WW2, a new thing called Social Security, and a whole host of other things that our country saw fit to tax the richest of us to pay for. Funny how in the annals of history we never come across such outrage at taxes as we have today with our exceedingly low rates.

    My point: Stop complaining about "high" tax rates. We're in one of the lowest tax environments since World War Two, we have the highest population that the U.S. has ever seen, the most expensive military apparatus and welfare state in our nation's history, and two simultaneous ACTIVE military engagements. Oh, and I think we might be in a recession too, now that I think of it. So yeah, everything costs money. Do the tax codes need to be re-written? Well, I'm currently in the 25% bracket, but my equivalent income in 1960 (after accounting for inflation) would put me into the 22% bracket. I'll let everyone draw their own conclusions on that.

    Resources:
    Inflation Calculator: http://www.westegg.com/inflation/

    Historical Tax Rates: http://www.taxfoundation.org/publications/show/151.html

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