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:

    @Chris:

    Yes, the top tax rate used to be 90%+. But almost no one paid it because virtually *everything* was deductible. You think there are "loopholes" now? You should see how people sheltered their incomes back then. I think Elvis Presley was about the only one to pay that much because he either didn't care or had horrible tax advisors.

  2. Lynn says:

    TimT:
    I DO work at the soup kitchen. I DO put food in the food banks which are now half empty. I DO buy Christmas presents for Salvation Army families. I DO donate almost all of my free time to be treasurer to my local animal shelter. I DO do fundraisers. I DO work on getting info together to apply for grants. And I also work 50+ hours/week and can take care of myself. I DO donate stuff to my local volunteer fire department's yearly auction and eat at every pancake breakfast and spaghetti dinner they throw and give them the equivalent of a fancy dinner out for it.

    As I said, most of those volunteering are middle and low income people! More low income people will part with some time and of their wages to contribute to community groups than others. And you know, the wealthy got there not by themselves in a vacuum.... they had employees who made money for them. Yes, the owner takes the risk but gets the much bigger payoff. But the employee also risks a lot. In return for hard work, you can still get laid off at the drop of a hat and at an age that makes it difficult to find work. Many people have made the mistake that the employer will be loyal to them only to find their butt out in the street as soon as the employer benefits from it.

    I have been working with business owners and upper management for 30 years. When income taxes for high profit companies and owners are low, they pocket the profits and buy real estate or stocks, or have big lavish parties and trips, etc. They only do minimal re-capitalization "IF" they are interested. Mostly they love having a cash cow. When income taxes are higher for them, THEN they look for things to spend in the business... expanding it, hiring more people, getting new equipment, etc. to minimize "taxable" income. So Yes, Tim, you have to put a motivational "gun" to their heads sometimes. As FDR found out during the Great Depression.

    The average person is not as generous as you seem to think. Without making it worth peoples' while, they will NOT give a crap about their fellow man. People care mostly about themselves, naturally. Before income taxes, there were a lot of people living in Dickens like conditions. Is that really where you want us to go back to? Only if you are well off and "safe" from the unlucky events that can happen to anyone in life I guess. Which shows you don't care about our society as long as you can feel good by just putting extra 10 bucks on your phone bill once in a while.

    We had a client once whom my boss, at the time, told that he was "too generous" with his employee retirement plan. The client said "I would not be able to live with myself if the people who worked loyally for me for 20-30 years had to retire and eat cat food to get by, while I will be comfortable." I can tell you he is the ONLY business owner who was so ethical and loyal and compassionate to his employees. No wonder they loved him. And my boss of course just shook his head... he never got it.

  3. Lynn says:

    p.S. TimT:
    The organizations I work with/help out get very little or no government money so I don't know what you are talking about.

  4. dp says:

    Wow, those of you who say the rich need to pay more in taxes obviously have no clue how the system works. You obviously have no clue that 5% of the population pays over 60% of our countrys taxes. Also, 50% of the country doesn't even pay taxes. In fact, they take all the hand outs that the rich pay for. If the "poor" would actually pay even a little in taxes and not take everything they could, the government would actually bring in more revenue than ever.

    By the way, who is actually hiring people.....oh yea, its the people making $30k/year. Guess what, the rich people are the ones providing jobs along with all the free crap you get everyday.

    Also, if you are making $1000/month you obviously aren't really doing much to improve your lifestyle considering a pizza delivery boy can make more than that. Why don't you quit whining and complaining about how the rich need to pay more and contribute to society yourself. If it weren't for the rich paying way more than the poor, this country would be nothing.

    Facts are facts, the rich are what makes this country function. If the government keeps stealing all their money, then you will not have such generous handouts such as food stamps, welfare checks and free housing along with all the other perks that you receive for not working hard.

    Pay your damn taxes, quit bitching about the rich and remember they are the ones hiring you so you can feed your family and have benefits to take care of them.

  5. Lynn says:

    There are a lot of you folks who need to stop watching Fox News! The tax cuts for the wealthy are lower now than they have been since 1934. These cuts are not sustainable and lets just call them what they are - Welfare for the Rich. The expiration of those tax cuts are only a 3% increase - stop acting like it would be a catasrophe! Most people are employed by Small businesses - not wealthy people. The wealthy put their increased income into their pockets or into other investments, especially overseas. They are not creating jobs here!! They only way they will grow their businesses here is if they tax rate is high enough to motivate them to lower their taxable income through spending... I know... I've spent a lot of my career helping business owners minimize their taxable income through capital expenditures. But when there is negligible tax impact - they just take it out of the business.

  6. TimT says:

    Lynn, that's great that you help out and the organizations you work with don't mooch from the taxpayer. But it's completely irrelevant to my point. My point is that saying people are in need does not imply that this gives moral justification force someone to help them at gunpoint. People aren't as charitable as they used to be? I'm not surprised. The Progressive-Statist has attempted to co-opt charity as a function of government... so they can have power and deliver more power to the state. Once charitable people believe the lie that "the government will take care of them."

  7. Spud says:

    A reminder missed in the comments above:
    �� The tax rates you're paying are NOT 10%, 15% ... 35%
    �� they ARE 15.3%, 25.3%, 30.3% ... 35%
    �� your government taxes the first dollar you make at 15.3%, and adds 15.3% to every tax bracket until you make $106,000
    �� UNLESS YOU'RE A CONGRESSMAN OR AN INVESTOR
    It all goes into the same bucket, and funds the same wars.
    To check YOUR true marginal rate, add $100 to the "Other Income" line on your tax form and compare the result with your original calculation. The increase in total tax is your marginal rate.

  8. Super Democrat says:

    Ya'll should shut up. Tax rates are at an all time low. Historically tax rates for the most upper class have been up to 92%. What? They are at 35% better then 92%.

  9. TimT says:

    Lynn,

    Tax cuts are "welfare for the rich". In other words, when someone gets to keep what's already theirs, that's "welfare", i.e. a gift. In your world, all money belongs to the government and whatever it decides you can keep is a gift.

    I bet you love the phrase, "from each according to his ability, to each according to his need".

    Here's another little fact: It's not just the "rich" that are going to be paying 3% more. The people in the lowest bracket, currently 10%, will see their tax rate jump to 15%. That's a 50% increase in the tax they will be paying! And guess what, even if you're in the current 25% bracket, you'll still be paying 15% instead of 10% on the lowest bracket of you income.

    Finally: you libs just get apoplectic about Fox News, don't you?

    @Super Democrat: As has been pointed out numerous times on this thread, you cannot compare the old 90%+ tax rates to today's rates. Back then almost everything was deductible, meaning virtually no one paid that rate. Why do you think they invented the Alternative Minimum Tax?

    The "rich" are paying a record amount of the federal tax burden compared to other percentiles, lower rates or not. The old saw about them "not paying their fair share" is BS brought to you by a bunch of Marxist politicians.

  10. Biker DG says:

    Lynn, darling, 39.6% is 13% more than 35%. This is a 13% increase in the top marginal rate. And yes it is significant (not catastrophic, but very meaningful). It may not matter to you, but it does matter to many.

    I am not sure I follow your distinction between small business people and wealthy people. Many people fall into both of these categories. Most importantly this is indeed where sustainable, community building jobs come from. Smaller independant businesses often have better benefits, AND importantly are slower to lay people off when times are difficult. Small business people have a tighter bond with their employees.

    So STOP TAXING US TO DEATH, already.

    Just as importantly, make the tax codes for personal and business taxes simpler. I am well educated, own successful businesses, have created about 30 jobs since the Nov 2008 crash, and can not understand our complex tax systems. This is not right, and completely unnecessary. Individuals and businesses deserve to have more clarity in our tax systems so that we can understand our obligations and make mor intelligent day in and day out financial decisions. We are going into the 2011 tax year in 3 weeks and I still do not know what the tax laws will be. BRILLIANT!!!!!

  11. Jim says:

    Enough with the class warfare, already... Nobody deserves to be taxed more than anyone else. Remember: its OUR money that the Fed is taking- not The Government's money that the government is allowing us to keep!

    Solution: www.fairtax.org Simple. Fair. More Jobs. Extreme economic growth.

  12. Duke Silver says:

    The tax code is not the place to solve the problems of the value of one's lifestyle.

    I feel like a lot of the discourse above is people trying to justify how their lifestyle is "worth" more (I work 22 hours a day (the other 2 are spent volunteering), I take care of my 64 children, parents, grandparents, and crazy Uncle Lou, I fought in the Civil War, I've built soup kitchens with my bare hands, I don't use roads, I have student loans the equivalent of the GDP of several small European countries, I drive a car so old that it runs on steam, I live in a thatch hut with no heat or air conditioning, I always leave, and never take, a penny) and how other people aren't trying as hard (This one guy claims welfare for himself and 37 fictitious children, my neighbor Frank inherited an actual gold mine and now collects a billion dollars a day and just plays XBOX constantly, my nephew Joe has had several competing job offers from top-tier law firms, but prefers to just collect unemployment checks since its easier, my rich friend Sue takes breaks from her top-paying position at her father's oil company to punch blind elderly widows of war heroes just for fun). The former is justification of the value of "my" lifestyle, the latter is proof that the lifestyle of others is corrupt.

    This cannot be solved through the tax code. It just can't.

  13. roughneck chad says:

    Gwen and super democrat are idiots... if they did run their own business that they had built... it would bury itself within weeks

  14. roughneck chad says:

    actually... most of you are.... when u start making decent money, you will start wanting to keep more of it yourself. step out the front door and try to make something of yourself instead of continually pointing fingers at 'the rich' and 'the wealthy'...

  15. Proud American says:

    Lynn, first let me say this... for someone that DOES so much and works so many hours you sure have a lot of time on your hands to write 12 novels.....

    I am glad you help out with all those charities which is what makes America so great that you have the freedom to do as you chose. This year I was attending this event where I bring toys and gifts for kids 12 and under who are considered under-privileged. During the event I saw the parents of these kids all talking on their NEW Iphones, Blackberry's, searching the internet, etc. I also saw them dressed in brand new clothes, new sneakers, diamond earrings, etc. I left there with the question: If these parents can have all these things, how can they not buy their kid a gift... The answer is, us tax payers are the ones that pay for the parents to have all these things. It makes me sick that there are SOOOO many people out there that milk the system, granted there are some that do not. My wife and I combined make around 200K a year. To some that is a LARGE amount of money and to Obama (who I am sure you voted for) we are rich... I can honestly tell you, we are NOT rich. We live in NY, have a comfortable home, have 1 car that we share, no kids (yet) and we have a hard time putting away money for savings. It is not b/c we spend erratically, its b/c living where we live, paying for our home (never late on our mortgage), commuting costs, daily cost of living, etc, makes it tough.
    My wife and I both work hard. I myself work about 60 hrs a week, my wife about 48 a week and we do not see much of each other b/c of it.

    So basically, my point is, it is NO ONE'S responsibility but mine to take care of my wife, myself and my family. I have no problem paying taxes, b/c that is part of being a responsible American. As much as you have a right to SUGGEST the RICH pay higher taxes and all the other tree hugging, left wing, poo you were slinging above, it is my right to tell you and Obama to keep your hands out of my pockets...

    God Bless America and God Bless TimT

  16. hard worker says:

    I'm in the top tax bracket. I have three employees and I have to pay health insurance for everybody. My son was born with several medical problems and because of that, my health insurance costs $3,200 PER MONTH. We're lucky to even have THAT as all other insurance companies turned us down. My son is the reason that I work so hard. I barely have much money left over to RENT a home (I don't own, can't afford to) and yet because I'm "rich", I get taxed out the wazoo and I have to pay for other lazy people's unemployment, disability and mortgages. Is THAT FAIR? I have nothing left for myself. At times I think I would be better off firing the three workers, stopping the business, and becoming a lazy ass myself... then I could just shut the business down and collect all the goodies and shop at Wal-Mart. That's the direction this country is going in. Better watch out you socialists. Careful what you wish for, you will probably get it.

  17. Chillimouse says:

    To all of those that think that the "rich" should pay more taxes and "shelter their money" there are a number of things that you are forgetting. First of all I am not rich by any stretch of the imagination however I have investment properties and have a good job.

    The rich do pay more taxes every house that is not your primary residence can as much as triple your property taxes, If you own a business you are taxed heavily on products sold and have to cover more for employees, On top of that if you make anything over 70,000 a year you are taxed at a much higher rate than those in lower brackets. Business inventory, supplies, fixtures, and buildings are also taxed.
    On top of all that "rich" people that spend their money on nice cars are taxed more than a 1975 gremlin. Also if you buy a 100 dollar sofa for your house taxed at 7% that is a whopping 7.00 dollars. For those "rich" people that spend 1000.00 on a sofa they end up spending 70.00 dollars in taxes.

    The soultion here is not to tax the rich more but to EDUCATE the poor (which should be footed by the government). On how to manage money and create more. Companies should be encouraged to keep manufacturing jobs inside the United States, however with this "entitlement" attitude americans have developed it just isnt profitable.
    Furthermore we need to bring true Capitalism back, Capitalism is not charging 200-300% markup on an item and giving millions in bonuses to CEO's of companies that are not managing their business well. But the stockholders would never do that because it is very profitable to overcharge for products.
    As far as government programs that help the poor, they are in dire need of restructuring, one of my friends survived a tragic loss of a spouse early in life, Social security kicked in and will NOT allow her to get a job in fear of loosing that money, She has two daughters 3 and 4 years old, she is stuck other than going to school.
    And the last thing I would like to say is that if you have a hard time paying your tax bill but have a large screen tv with cable and a stack of DVDs 5 foot high.... that might be your problem, if not and you are working your ass off to make it, i salute you and wish you the best....

  18. steve says:

    Just to keep the record somewhat straight.

    Corporations don't pay taxes. They collect them from their clientele and head them in the wrong direction - to government.

    Raise taxes and the corporations raise prices. Who pays then? The consumer. As a geezer I have no probs with that scenario because I don't want many "things" anymore, like I used to.

  19. An Actual Veteran says:

    First off I believe in hard work. I have yet to go to college, but I plan on doing it soon. I will be using a government plan (GI Bill) that I earned fighting for our country in war. I have heard quite a few people talking about how those of us that aren't making 250K+ a year at fault for that. I did reasonably well in high school, but decided to forego college so I could enlist in our beloved Marine Corps. It was not about the money, which was good because you don't make much. I am now in Law Enforcement and supporting my wife and son on about $50K in Northern Virginia. Have I done something wrong? Was I foolish for choosing the career I have? Are you going to fault me for fighting in a war? Serving my country and now my community? Yeah we struggle sometimes and every dollar for me and my family means a lot to me then someone who decides it is important to have name brand Suits and Coach purses, and is proud that they spent 100,000 on a car or 2 million on a boat, but we live within our means and we're happy. How dare you say that there are those of us out there that aren't making as much money as you because we made foolish decisions?

    Also for those of you that don't have a job. I know it's not for everybody but if you have a clean criminal history and you're not into drugs, try going into the air force or navy. They look great on any resume and they will teach you skills for almost any career you could want to get into.

    One more comment... How does it make sense that the salary of military and governemt personel is paid by taxes but then I have to pay taxes on that. so the same dollar is being taxed twice? Oh and Captain Obvious I would love for you to tell me and my bretheren to our faces that we are less productive then you because we have chosen to serve THE PEOPLE.

  20. devoted mom 2010 says:

    As NOW a lower-class american, I have worked my A** off for 16 yrs in 150*+degree kitchens. I have been on my own since I was 17. I put myself through culinary school, am fully involved in every aspect of my children's lives. My husband and I both lost my job when the economy went under. He is in a very specified field making it even more difficult and I would go to an open job interview and there would be 50 people in line for the same 1 opening. After months of this we couldn't afford our rented home, electric bill, etc. We had to do the unthinkable and pack up and move in with a parent for a while. Since, we have worked remedial jobs with a meager wage until I was put on bed rest half way through my pregnancy. I just had a baby 5 months ago via c-section with complications afterward, and I also have a 7 yr. old boy who is autistic. It took over a year and more red tape then (anyone who hasn't done it) could ever imagine to get SSI disability benefits for my autistic child. This is just to pay for the services he needs to learn the things that most people take forgranted, like talking or putting on his shoes. So, I don't want to hear about how everyone who gets these benefits are just lazy, worthless pieces of poo. We are doing the best we can just to feed our family and make sure we have electricity, a roof over our heads, and some basic services for our disabled child (like speech therapy). We made a very good living before the crash, upper-middle class, now, we live in poverty. Do you think that we get a tax break??? NOPE... We paid less when we were in a much, much higher tax bracket. I never thought about how the poor got by, until I became one. Henceforth, you really shouldn't bitch if your a bit behind but still have everything. Some of us have lost everything, except hope, that we can rebuild our lives.

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