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. Taylor says:

    JD and others, read allot of true comments today, glad Im not alone, we are the unheard majority, tax us 12,000 dollars less a year and see what kind of stimulas we have.

  2. Taylor says:

    To Dan C. - Read your consitution, the government does not have the "responsablity" to make the playing field level, we as citizens have the resposnablity to make the playing field level. Your off base here buddy, sorry but all of our efforts are not the same, so why take from someone who has the stress and the hard work to "level the playing field" for those that dont, I know people are working 2-3 jobs to make it, and I feel for them, I have been there, longer then I wanted, but I didnt take a handout by having the playing field leveled, that is socialism.

  3. Taylor says:

    Maybe this country needs a good war on its soil, destroying our land and property to see what we really have, that would wake everyone up, that would make everyone equal, we dont deserve more the our god given rights, and I did say GOD given rights, everything else is gravy and food on the table. Thanks for your comments, I just got on this page to see the tax tables for next year so that I can plan my life and how much I will have left, before I pay, I wish all you guys luck next year and a better life.

  4. Someone says:

    Wow...what a horrible world we live in. I can't believe people actually think this way. How awful and sad. The world is not so black and white. Not everyone that is struggling financially is lazy or hasn't tried hard enough. There will always be people that take advantage of the system but not everyone is that way. It is arrogant to assume that you have all the answers and that you can just judge someone based on how much money they have. Unfortunately not all hardworking people get ahead in life. There are plenty of hard working people that are struggling. There are also plenty of lazy people that are wealthy and never had to work hard for what they have. Life just isn't fair and is certainly not cut and dry.

    Oh and by the way...there are plenty of people that went to college that are struggling financially and there are plenty of people that never went to college that are wealthy. So whether someone went to college or not does not determine how their life will turn out.

    Yes, I did go to college.

    Somehow this discussion took a bad turn and became more about what you think of poor people rather than what you think of taxes.

  5. Josh says:

    Someone:

    It is exactly your mentality that will keep "the poor" living in poverty and dependent on the government not for years, but for generations. If you look back at the dialogue on this blog, it is pretty consistent that truly needy and deserving people should get the temporary help they need when they find themselves on hard times. Unfortunately, hundreds of billions of dollars are being stolen from these people by the lazy, undeserving individuals that have decided to game the system. So much more could be done to help the poor rise out of poverty if we werent wasting this massive sum of money every year.

    But your way of thinking is shared by tens of millions in this country. We cant cut back on one single social welfare program. We can't apply any real standards of how and to whom this money is given out. Give the money to everyone, and you are bound to give it to at least a few truly needy and deserving people. The massive fraud and abuse? Thats just a price we pay for "doing the right thing".

    Please think about this for a few minutes. The Wall Street Journal did a study a few years back where they looked at thousands of recipients of government social programs. Welfare, foodstamps, public housing, MediCaid, etc. They found that over 70% had one or more of three characteristics in common. 1) Had at least one child out of wedlock 2) Dropped out of High School and 3) Convicted of a crime. I was shocked, but not surpriswd when I read this.

    Please tell me how more money solves these problems? I would much rater stop rewarding these individuals for bad behavior and decision making and triple the benefits that the other 30% receive.

  6. Thefiercelime says:

    Your tax dollars go to ridiculous world policing and unneccessary wars created and prolonged by inept leaders and fear mongers who make a profit from the business of war and oil and are so stupid they couldn't even book a tupperware party.

    War and corporate welfare is what you should be angry about. Welfare for rich people is what should be pissing you off about the US. By definition, it's quite impossible for poor people to have all of your money, isn't it? Your taxes go to the lazy rich, not the lazy poor. Wake up, America.

  7. Thefiercelime says:

    $932,891,425,796 and running for your stupid war in Iraq and Afghanistan. Get a grip and grow up.

  8. Thefiercelime says:

    Josh. Riddle us this, O great hardworking honest American: how long has it taken America to ever spend $932,891,425,796 on welfare programs as opposed to wars and what kind of genius plan is that? The dollars for war versus dollars for poverty isn't even close. I have a hard time endorsing the use of tax dollars for destroying other people on the planet rather than for taking care of our own, but, I have a feeling that you'll try to make a case for that. Try doing it without using the words "terrorists", "socialism" or "pride". Please.

  9. The King! All Hail! says:

    ANARCHY!!!

    Haha...
    It's the government.
    Do you really think they are trying to do what's best for us?

  10. Pat R says:

    Bottom Line we need a tax overhaul, after 29 years in the work force I'm going from the 15% bracket to the 28% bracket. The only draw back is the tax increase that I will have to pay. One fundamental foundations of this country was to build on prosperity. Our country THE Administrations' of the past and the present has destroyed the tax system. Now more then ever now being in the economic down turn the tax system needs to be streamed line. You have to strive to be in the next highest tax bracket to live as you done in years past. The Gov't and it's unconscious decisions in passing bills with hidden agendas lead back to increased taxes to us and in turn we have to make more $ for WHAT TAXES. Go offshore

  11. 120k in student loans says:

    I am for doing good to the poor, but...I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed...that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.

    ~Benjamin Franklin

  12. Josh says:

    Well "fierce" lime...According to the most recent breakdown of 2007 Federal Spending, we spent 980B on Social Security and Medicare. And we spent an additional 570B on Social Welfare Programs like Medicaid, Welfare, Unemployment, Food Stamps, government housing, EITC, etc. So to answer your questions, it takes us about 8 months of spening for government social programs to equal the cost of ~8 years of Iran and Afghanistan war spending (thats if your numbers are true. I didnt research it but just gave you that one). Even f you wantto back out SSI and Medicare, it takes less than 2 years of other welfare programs to equal almost a decade of wars in Afghanistan and Iraq. Sorry to let facts get in you way.

    Also, I just want to say this its obvious by your writing that you are synmpathetic to the "terrorists"and beleive that America is a greater threat to the world than Islamic Jihadism. You most certainly desire a "Socialist" system in America and around the world. And you obviously have little to no "pride" for this great country. Did I fit them all in?

  13. June says:

    I'm in the 15% and I'm going to say that Gwen has stated the most absurd thing I've heard in awhile...I don't make a lot of money (obviously) but I'm not asking for hand outs from more successful people than myself. Generally speaking, they worked hard for what they have and if you had the income you wouldn't want to give it away either. It's not their job to support you because your life has failed, miserably or because you lack the motivation to improve your situation. Nothing annoys me more than people who blame more successful people for their crappy life. Start making $350k a year and then tell me you want to pay taxes because other people can't get their shit together.

  14. S says:

    Josh:

    u sure do spend alot of time on the internet....?

  15. Josh says:

    S:

    Touche! "u" certainly have got me there. Please disregard my previous posts as the ramblings of an internet addict.

  16. SRAP says:

    I have my own opinions, but my opinions can sometimes change if I openly listen to the opinions of others. Keep this conversation going...I am on the fence on a few issues and would like to continue to hear your thoughts.

  17. cogipro says:

    Following last night's senate vote, there are several things you can kiss goodbye. One is your wallet, regardless of your income unless you are close to the poverty line. Second, are the taxes that all those "rich" doctors pay. Under the German Health plan of socialized medicine, doctors make the equivalent of $80,000 a year. So not only can you say goodbye to the high tax rates that doctors PAY, you can say goodbye to doctors in general. Who in their right mind will spend 12 years in training, go in debt upwards of a quarter mill to get that training, for a job that just MIGHT barely hit six figures. I feel for GC, who laid out the kind of financial bind many new doctors have already discovered. It will be catastrophic for them if Obamao gets his way. (not a misspelling)

    That bill will kill businesses, our superior and easily accessible healthcare system, and ultimately, our country. Forget about 20 plus million more people being insured, as there won't BE any doctors to see them. What good is coverage with no doctors?

    If you have not already, contact all of your legislators and tell them not to vote for the death nell of our country. Fix the problems, but don't throw the baby out with the bath water. And don't believe that nonsense about how all this "change" is going to reduce the national debt. If it is approved as planned, it will cost us an additional 2 trillion. We already owe 12 trillion. What are those concrete heads thinking?

    By the way, if you think doctors are rich, better look at their divorce rate, stress level and the fact that on average they die 15 years sooner than their peers.

    Enjoy the debate, but remember, our national house is on fire and almost no one is paying attention.

  18. Susie says:

    For all of you people who say those making more should pay more taxes, do the math. 25% of 130,000 is more that 25 % of 70,OOO. And 25% of 130,000 is a heck of a lot more than 15% of 30,000 or 10% of 15,000. And for those who are blessed to make even more, the are paying more.

  19. Terry says:

    Something to think about .....
    When you send your money to the government, it then hands part of it back to you for programs like welfare, schools, roads, and now "healthcare". The Government first takes out a big chunk to pay the federal bureaucracy, then passes down what is left which often is less than 30%. The new Healthcare program will cost much more than we are paying from private healthcare now or we have to cut back on services. Just watch and see. For some reason too many people seem to think the new "public health care" system will be nearly free, but there is no such thing.

  20. JC says:

    For those of you who are honestly saying to those of us who are talented enough to earn the money we make, and put in the time and effort and stress that we do to make it - I say, you deserve where you are in life.

    Go read an economics book (I have an economics undergrad so I am at least as credible as my liberal, socialist teachers made me). You are in squalor precisely because of the tax rates on the rich. My money is now going into a savings account, instead of into the economy as velocity of money. I was offered a raise this year if I would sign up to some personal targets that would have made my life miserable. I looked at what I would get to keep (less than 50% after all in) and decided it wasn't worth it...wealth was destroyed from the system - the same system you are hanging out in at the bottom.

    But my money continues to go to the Govt in larger amounts, and you continue to live in squalor needing help. Why do you think that is? Again - go read an economics book. Government is not your answer.The $20,000+ I gave to charity last year turned into nothing this year because I got whacked with some arcane AMT burden that I will be paying off for 3 years. I also will not be moving, not be buying a new car to support overpaid union workers in Detroit, and I won't be investing in companies to get the economy moving again.

    Handle your rig before you make uninformed comments. If you are at the bottome, it is a combination of randomness (which lefties and atheists worship) and personal failure.

    Sorry - but I have no mony to give you now.

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