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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. cogipro says:

    JC has hit the nail on the head. The dis-incentivization of the higher wage earners by way of high tax brackets is sure to flatline the recovery. At this point, the top 1% of wage earners pay over 40% of the total federal income tax paid by the American people. If you think that is not enough, and apparently it isn't according to Obama and his henchmen, then wait until those wage earners become ex-patriots. Margaret Thatcher was right when she said, "The problem with socialism is that eventually you run out of other people's money."
    You see, people like JC are pushed to just save the money, not stimulate the economy, then retire to a country like Costa Rica. Very soon some of these third world countries will provide more freedom than the U.S. will. They will also look forward to receiving hundreds of billions of dollars courtesy of the U.S. and other developed countries as a result of the much ballyhooed Copenhagen treaty soon to be signed by Obama. That's right, it's time to spread the wealth. Oh, wait a minute, we have no wealth. That's ok, we'll just borrow a couple trillion more from China (who won't be participating in the carbon pay out to other countries) so we can pay the carbon debt. Oh, but that means even higher taxes!

    Oh, but wait, the "climate change" problem was just recently exposed as a myth; a myth designed to sap America of its power and "spread the wealth" to less fortunate citizens and poorer nations (who are poor due to the lack of capitalism). You won't see the liberal press covering that little item though, will you. No, because they are all enthralled with this liberal 'throw the U.S. under the bus' mentality spewed out by our liberal leaders.

    Ladies and gentlemen, it matters not what tax bracket you are in. Your taxes are going up no matter what the silver tongued devil from Harvard tells you. Eventually though, you won't have people with a strong work ethic, ambition and high earning power to pay the bills. Good luck with that. I look forward to never paying the wonderful AMT (alternative minimum tax) ever again. I will miss this country as it used to be, and should have been forevermore, the greatest country in the history of the world.

    Signed,
    No longer throwing good money after bad.
    P.S. See you on the beach

  2. Goat says:

    Very well said Josh, JC and cogipro. I've sat here for ten minutes trying to think of something to say that you haven't already covered. And Josh - I'm glad you spend a lot of time on the internet. Obviously not as much as S does or u wuld b ritin ur hole articel like dis.

  3. Dave says:

    It's tough to listen to the politicians who run on the theme that the rich should pay their fair share. That stance gets a lot of votes in a country that seems to be turning on smart, successful people and innovative corporations, the type of people and companies that built this country into what it is today.

    I do think all people should pay their fair share. A flat tax on income would go a long way towards accomplishing that (I know there are some other issues such as deductions that this does not address). Anyway, every citizen should contribute a little, even if they end up taking more back in terms of the programs and other entitlements of which they are beneficiaries.

    Let's use an 18% flat tax as an example. You earn $40, 000, you pay $7,200; you earn $400,000, you pay $72,000; you earn $4,000,000, you pay $720,000. So, you can see that the rich will still be paying for almost all of the costs of running the federal government and all of its programs that the people at the lower income level enjoy. This to me seems fair - at least all citizens would have some skin in the game.

  4. nmanhipot says:

    Taxes are simply a means of paying for government spending. Our national debt is now at an estimated 12 trillion dollars ($12,023,527,103,043.84). There were 155 million (155,490,000) federal income tax returns filed in 2008 which means that if we wanted to wipe out our national debt this year (excluding compounding interest) each family would have to pay 77 million dollars ($77,326,690.48) before the end of the year. Let me ask you, Mr. and Mrs. $50,233 national median income tax filer, do you have a spare 77.3 million dollars you could mail in to Washington this Christmas? Of course, we need 100% participation!

    I'm only rich in the eyes of someone from a third-world country (25% tax bracket), but I'm ready for a "fair", accross-the-board flat-tax with no exemptions for individuals or corporations. Cut the IRS down to about 250 people saving 100's of billions of dollars in government employee costs, tax preparation expenses and eliminate loopholes. How about it?

    The vast majority of your fellow countrymen aren't "rich" because of luck, inheritance or by cheating, it's because they are creative, intelligent, hard-working, shrewd and thrifty. As an example, the average millionaire in this country started from almost nothing and drives a used pick-up truck. (for more read "The Millionaire Next Door").

    The bottom line is to vote for representatives who will reduce government spending, not increase it - this will cause the eventual decreasing of tax rates. It might also be nice if less than the current 46% of the population who pay zero federal taxes would be required to help fund the thousands of pages of unread legislation that their elected leaders are signing into law in the middle of the night while silencing the protests of the representatives of the other "half" of the country.

  5. Agh says:

    I'm in the 15% tax bracket (right now) and thought it was a possibility we could get bumped up, so I decided to google "2010 tax brackets" and here I am.

    I'd like to say that i'm also "on the fence" about things. I dont know the "solution" to the problem......but I do know that what we have now isnt working.

    I'm 23 and work 30+ hours a week, and also go to school to be a nurse, and my husband is a prison guard. My husband made some bad choices while in college (choosing to go to private school) and we are 70K in student loan debt. Needless to say- on paper we make good money, however after the 700 student loan payments, the car payment, and the mortgage payment, it doesnt leave much left over. (we arent big spenders, our mortgage is LESS than the student loans, one car is over a 12 years old)

    We accept these mistakes and the fact that we are struggling right now...and have learned from them.

    We aren't anywhere near what i'd consider "rich" but some people would consider us "rich" because we are at the high end of our tax bracket.

    For those of you who think that the "rich" should pay MORE in taxes are rediculous. I think EVERYONE should pay the same taxes.

    Here is one of the reasons why.

    A coworker of mine, makes about 23K a year. She currently has 3 daughters in her household (and one is out of the house & has 2 different different kids by different fathers, and lives off of our tax money). This coworker also has a working husband, however he is a "chef" in a bar, who grills burgers- who makes 12 dollars an hour CASH (24K a year). So on her taxes she claims a family of 5 living off of 23 K a year. Needless to say at tax time she gets a REFUND of 11,000! So basically she is 'BEING PAID' to NOT better herself. when all is said and done, they make nearly 60K a year after their tax handout. Not to mention her daughter gets financial aid at our community college-and got 2000 extra a semester, than what her classes cost.

    Moral of the story- why should hard workers have to support this? Just because we make more...doesnt mean we should pay more.

    When this same lady was considering college(which she would have gotten FOR FREE)- to be a medical transcriptionist (which would pay about 20K more a year)...she opted against it because "she would miss her daughters 7th grade basketball games" ...i mean..theres nothing like giving up the opportunity to better yourself-since your daughter wouldnt have 5 more years of basketball games to play in..... and heaven forbid maybe having to give up that extra 11K that you didnt even earn!

    I totally have no problem paying taxes- (for schools, roads, to help people who are TEMPORARILY having a hard time) I just dont think that some people should be paying ALOT...and those who dont pay taxes, pocketing it.

    I think those people in america at the "bottom" have the most OPPORTUNITY to make it to the TOP!

  6. Just a quick point says:

    People not making enough money to pay taxes, aren't "pocketing" whatever subsidies they do get. They're spending it so they can at least try to stay alive, and in a position to move up (not living in squalor in the streets for example).

    Progressive tax rates make sense when the budget's needs aren't being met. The reason is very simple, in that the amount of money a person needs to live will generally remain constant between incomes, but when someone earns less it becomes less viable to actually get by if you're paying the same rate.

    It's not fair, and it's not right, but the difference needs to be made up somewhere: that's where inflated rates for higher earners, who should be able to afford it and still have more resources than those that can't, come in. However all that said, the IRS, and many budget expenses, are a bit crooked in how they handle things.

  7. oldbird says:

    With all this angst about taxing, I'm surprised no one has mentioned the FAIRTAX.
    step 1 - repeal the 16th amendment
    step 2 - eliminate the IRS
    step 3 - pay every wage earner 23% of the Federal poverty level
    step 4 - eliminate all payroll, corporate and Social Security taxes
    step 5 - institute a 23% sales tax on all new products sold in the US.

    details @ FAIRTAX.ORG

  8. cogipro says:

    Just a few additional thoughts:
    1) "Fair" is where you take you pig to get a ribbon.
    2) There will never be a flat tax due to the inability to get a majority in congress on this subject AND the fact that congress just can't seem to decrease the budget no matter how much it makes sense.

    I personally don't mind the marginal tax rate system we have, despite the fact that I am paying in absurd amounts. The only thing that makes sense in this climate is to shrink the budget (see #2) to closely approximate what is currently being raised. If my taxes have to go up a modest amount to cover reasonable expenses, fine. As long as we do not move up into the oppressive tax rates of 42% and higher for ANYONE, I'm fine with it. Above that discourages economic growth.

    Lastly, the liberals behind the proposed "share the sacrifice" legislation that adds 1% tax for those making from $30000-$150,000, and a 5% added tax for income above $150,000 to pay for the wars we are in is patently absurd. It is a ploy to get more money to support their liberal socialistic programs that are part of the whole Obama deception.

    While we are at it, we had better nuke this global treaty nonsense that is designed to destroy our constitution and our nation as a super power....but I digress.

  9. Jon, California says:

    It is always the young kids and jealous malcontents that want the "so called" rich to pay more than their fair share. These people then grow up, and (some of them) end up earning a decent living and get charged high tax rates. Boy do they whine then!

    Well, we live in a capitalist country and that isn't about to change for a very long time. Get used to it. Under a capitalist system, you have people who do better and worse than the norm. It's called a system of incentives - whereby there is a big incentive to do well and succeed in life. No, there is nothing wrong with being successful.

    If you don't have those incentives, i.e. - people who earn more get taxes into the toilet, etc. - then things end up going nowhere. No one tries to do well - after all, there is no incentive. No one is there to hire you - they sit back and do nothing just like everyone else. Eventually everyone is sitting around doing nothing and the society goes broke.

    Socialism has rarely survived in any reasonable form for a decent sized country for more than a short time. Eventually the incentive become corruption. Then you live in a place like China.

    So please wake up, stop looking for a free lunch and have everyone else pay for what you don't want to pay for. The well-off pay more than their fair share. If you were in their shoes, you would know it. But its easier to whine and say that certain people have it better than you do - and that they should be made to pay. Calm down - or you may end up in a long line just to buy bread.

  10. Heidi, Oregon says:

    I agree with those who are saying if you want to make more money put the effort in. I grew up poor, was a teenage mother and decided I didn't want to end up on welfare. I was raised to believe that public assistance was temporary and not a way of life. So I went to college, earned bachelors and masters degrees and a professional certification. I did all of this so that I could provide for myself and my child. I have worked very hard so yes, it iritates me, when socialists want to "redistribute" my wealth. I was held accountable for my actions (getting pregnant in high school) why shouldn't other people be accountable for their actions and decisions?

  11. mike says:

    Screw the IRS thiefs...they steal our money to mess up the country even more
    and since now the US has become a communist socialist evil country who is hungry for money to use to torwards wars, weapons and all that
    I am getting ready to throw away my american citizenship and live elsewhere where people are not treated like criminals and a country who actually dont steal your hard earned money

  12. Newbe in research says:

    WOW, some people need to read how Rome fell. Taxing the rich and giving free rides to the poor is a system setup for failure. Why try to get rewards from hard work when it is taken away from you. I have come from eating out of dumpsters to fall into the 25% tax bracket. How about hard work and education?! It's out there, go get it.

  13. Jessica says:

    Having these income tax brackets makes me want to work LESS, not more. My productivity is reduced, as is my desire to professionally excell, because as soon as I start to make just a little bit more money, my tax rate would jump from 15 to 25%. That's ridiculous. Where's the incentive to be productive? To work hard? To keep your money? Why on earth would I want to apply myself when the government will take an additional 10% of it? That would move me backward financially, which is exactly how our government thinks.

  14. Tom Porter says:

    I am not sure that all of the tax rates in this site are correct? I thought the rates were going to go back to the place they were when Bush LOWERED them??? I thought the 25% rate was to go back to 28% Etc. Also I thought the 15% rate on Capital gains was to go back to 20%???? I hope you guys are right and you did your homework. I put in a new AC $5,500 and you would have to be a political Tax expert to figure out the new form 5695 "Residential Energy Credits". I guess I will have to hire someone to do my taxes this year.

  15. cogipro says:

    You are correct about the rates going back to the pre-Bush tax cuts. That will occur in 2011. The rates are subject to change, though, based on whatever congress and the president determine.
    Kinda warms your heart, don't it?

  16. cogipro says:

    ASDF, I hope you understand that not being handed everything simply makes you stronger. Busting your butt and driving a "crappy car" will serve you better in the future. I know as I've been there. Don't worry about the silver spoon folks. Most of them reveal their weaknesses and fail to excel.

    It is quite interesting that some people are not in favor of oppressively high tax rates unless the tastes of those high earners include indulgences like "movie theaters in their damn house". Have you ever considered that all of those indulgences create jobs in manufacturing, sales, installation, etc. This is America. At least for now you can spend your money the way you want. Who cares what the spend it on if they can afford it! Perhaps you would prefer a national sales tax instead of income tax.

    Most everyone on this blog is focused on what is "fair". Fair is far from being an absolute as it is perhaps the most subjective concept in history. That is why I have always said "Fair is where you take your pig to get a ribbon".

    Every nation has to decide what its priorities will be (what is fair). Conservative capitalists favor little government and low taxes. That formula has given us the greatest growth and wealth years in the history of the world. Naysayers, the moonbats of the left like Pelosi and company, believe big government is necessary because we Americans are just too stupid to make good decisions. They want to control everything about our lives and that takes big time tax collection, which of course, kills small business and therefore kills job creation. Of course, every program the government creates is an abysmal economic disaster. The best thing the federal government can do is ensure that we are militarily defended, then get the hell out of the way.

    This is not rocket science. We must have low tax rates to increase disposable income and stimulation of the economy. We must have low taxes on small businesses to encourage the hiring of more workers.
    Before you bash the rich, keep this in mind: No one ever got a job from a poor guy.

  17. Bryan says:

    lolalarvale, a corporation that produces goods or services for sale to customers does not pay any taxes. When a corporation is charged a tax, that company simply includes it in the cost doing business and passes it on to its customers in the form on higher prices for its products. If they didn't do this, they would not be able to stay in business.

    Since these corporate taxes end up being added to the price of products provided by these companies, they are in fact a hidden sales tax. Since this tax is hidden in the price of the product, in many states customers end up paying additional sales tax on this hidden tax. Even if your state exempts food and prescription drugs from sales taxes, you still end up paying this hidden sales tax on food and drugs because the companies that produce them are not exempt from corporate taxes.

    Corporate income taxes are nothing more than a cruel hoax perpetrated by dishonest politicians on ignorant voters in order to convince them that the "evil, rich corporations" are being forced to pay their share of the tax burden, when in fact, the public ends up paying those corporate taxes.

  18. David says:

    Ok, I get it. Let's penalize those that work their tails off and are successful by raising their tax rate. Then let's give it to the those that don't want to better themselves and get a free ride. Thanks Washington!

  19. OldBird says:

    Two more good reasons for the FairTax!

    The FairTax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.

    The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.

    The FairTax:

    Enables workers to keep their entire paychecks
    Enables retirees to keep their entire pensions
    Refunds in advance the tax on purchases of basic necessities
    Allows American products to compete fairly
    Brings transparency and accountability to tax policy
    Ensures Social Security and Medicare funding
    Closes all loopholes and brings fairness to taxation
    Abolishes the IRS

  20. Josh says:

    "because the rich get more from the government."

    I chuckled. How do you even respond to something like that?

    Anyway, no one is arguing that the "rich" (love that term) shouldn't pay more. Under a flat, progressive, sales whatever tax system, that would be the case.

    What I think most responsible, productive Americans are upset about is that the goverment wastes hundreds of billions of dollars each year on leaches to the system that are undeserving of others charity. And in doing so, they create this "institutionalized" poverty and government dependence for tens of millions of Americans (and illegal aliens). The actual dollar amount is irrelevant. If they somehow taxed another 5 Trillion out of the "rich" they would just waste it with the only certainties being more poor and dependent and a larger government intruding in our lives.

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