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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. Mrs*O says:

    Thank you so much, Jeff, for that breath of fresh air in such a stifling debate over something that is exactly what you say it is--worry over material possessions. I can see both sides of the argument, and really, I don't think anyone is truly wrong here, but why worry so much over something as silly as money? Be happy with what you have and be thankful, above all else.

  2. AO says:

    The responses of the people whining on here just shows general illiteracy in history and personal finance people are. Maybe it's time to watch something else than a reality show and read something else than bible fiction?

  3. Badlytaxed says:

    Thanks Jeff. I think you are absolutely right.

    I am single and I am seeing that my federal tax bracket is much higher (>10%) than those of my married friends who have working wives. :(

    People who earn should be allowed to keep their money instead of paying in terms of taxes for someone lazy and stupid enough to not get a job or those money hungry companies bailout who play foul on the wall street.

    I am not saying don't tax me. But please be within reason and make it flat for everyone.

  4. Miss Swan says:

    Enough bull about this whole taxing the rich complaints by the wealthy. If your income is above $100,000 a year, you are rich and can pay more in taxes. Enough said. There are people in this country that are struggling on a few dollars a day and you complain about paying a little bit more in federal taxes out of all that money you make? How dare you!

    This tax system is broken and we need a fairer tax system. If socialism is the only way to make this country a better place for everyone, then yes, we want socialism. I want everyone to have a chance in this world and not just allow the super rich to continue running this country into the ground. Why was there even a stimulus check for the big banks and commission payments for the bank employees? Why are we the taxpayer bailing out the rich executives and CEO's when we are suffering in this recession? We need to bail out the unemployed masses, not the government people in Washington D.C. and the financials in New York City.

    This system we have right now only benefits the wealthy an is absolutely wrong! Fair tax is a must and a human right! I hope Obama and the Dems can get this thing done. We need universal health coverage for all citizens and residents, and we need tax brackets that will be fair to everyone.

  5. Jonathag says:

    I think our government should get back to following the constitution that is was founded on. Where in the constitution does it say that citizens should pay 45% of their income to the government?? Where in the constitution does it say that it's the government's responsibility to provide healthcare to it's citizens?? It doesn't!! It stinks that our government is bankrupting the entire country, and our children's futures, and there are alot of people sitting around thinking it's ok because they are down on their luck and wanting someone to bail them out.

  6. Josh says:

    Miss Swan:

    People like you make me sad for my children. People like you are going to tear down this once great nation. People like you will make sure that my children's America will be worse than the one I grew up in. And I've learned the hard way that people like you wil never change, no matter how much logic and facts are presented to you. But I keep trying...

    Do you know the government collects almost $2,000,000,000,000 a year in taxes. Thats 2 Trillion if you were wondering. That's a thousand Billion dollars. Thta's not enough money to help the "truly needy"? The problem is not the rich, it is the millions of Americans (and illegal aliens) that made horrendous choices in their lives and now expect honest tax payers they have never met to pay for their mistakes. People who go our partying instead of studying in school. People who use drugs because its "cool". People who have 4 kids from 4 different fathers because that makes them popular or loved. In general, lazy people who feel entitled and get hundreds of billions of dollars a year from responsible people because they are incredibly irresponsible.

    With $2T we could quadruple the help to the truly needy and DESERVING just by cutting off the leaches. But youdont want to do that do you Miss Swan. You just want to punish the evil "rich" that go to work before their kids wake up and get home after they are in bed. Yeah, that sounds much more "fair".

    This country is doomed......

  7. Maria says:

    I enjoy reading how Miss swan suggests that a fair tax is a human right... right along with a house, nice car, and everything else misinformed people believe should be a right... read the words, RIGHT to LIFE, LIBERTY, and the PURSUIT OF HAPPINESS-- the pursuit..the oppotunity to gain happiness...NOT THE RIGHT for it to be handed to you! You must work for it...

    And those who say well I pay 15% on 20k while the company that made 1,000,000 also pays that 15%--- ok so for you its 3000 bucks and for them its 150,000.... sounds fair to me! (and I am in that lower portion that makes under 50k a year!)

  8. Dan Colbert says:

    So Maria...sure sounds like you're in favor of a flat tax then. A flat tax sounds fair on paper...after all 20% against a low income person is the same as 20% on a richer, wealthier tycoon right? Each pays the same percentage of their net income in taxes right? Wrong! Flat taxes are inherently unfair. There is a certain basic income level that one needs to survive and taxing even low income wage earners at the same level as that applied to a wealthier individual is not resulting in the same standard of living.

    Yes, we all have the right to the pursuit of happiness, but the government has the responsibility to ensure that the playing field is fair and level for all. This is not a free for all island where it's everyone man for himself. The government must ensure that wealth is distributed fairly to those that really need it. Because we all start off at different income levels and wealth levels in life, the government needs to take it upon itself to do what's right!

  9. Josh says:

    Wow. Just when you though Miss Swan couldn't be topped when it comes to Socialist propogands, here comes Dan with "the government's job is to redistribute wealth".

    I always found this a very insightful compare and contrast:

    Liberals believe that Government exists to provide for the people

    Conservatives believe that Government exists to remove barriers so that the people can provide for themselves.

    So true.

  10. Worried about my children's future! says:

    Why does everyone want something for nothing?? If you want more money in your bank account go out get the degree you need to do so. Don't EXPECT those of us who chose to go to school and further our education to do this. I chose not to live off welfare and foodstamps. I chose not to have other hard working people support me. I

  11. Worried about my children's future! says:

    I TAKE CARE OF ME!!! Some of you should try it. You are only what YOU make of yourself!!!!

  12. Socialist says:

    Why do the rich always say that everyone should just lift themselves up. But what happens to the worker who has no choice in what a bank does, has the company he is working for get there credit denied? does that mean the worker should pay for the faults of the rich elite? And where else in the world can you make well over 375k a year and pay this low of a tax break and have a living standard like we do in the U.S.? I say the rich should pay a higher tax rate and if you cant make it on 250k a year... maybe you should look at how the poor are living and that does not mean the people who dont want to work.... I have worked 2 full time jobs at the same time and still could not make all ends meet, I have not had health care for 4 years. and i drive a car that should have been put in a junk yard 5 years ago.... But yet you complain about a high tax rate. Something you should realize is that not everyone has an equal opportunity to move up the social latter. So next time you feel that the poor and lower class worker are just lazy and should lift themselves up, think about yourself working 2 crappy jobs 40 hours a week trying to make it in society.... Some people do need a helping hand ( not a hand out). and the next time i hear about someones freedom being violated because of the tax rate I am going to scream. Your rights are not being taken away because you pay a higher tax rate, your freedoms are being taken away by all the government involvement in peoples personal choices....Abortion,Drugs,speech, Anything that does not effect people outside of the person making the choice should not be restricted from doing that action.

  13. David in CH says:

    To Financial Samurai -- if you are paying 35 percent of your income (earnings?) and by that you mean, taxes/income and not your marginal rate, then you must be doing quite well, are including both sides of the payroll tax and are living in a high tax state and city as in NYC. If so, then count how lucky you are and stop kvetching. Otherwise you sure are not a financial samurai and/or you can't distinquish between an average and marginal rate, in which case you should either be more precise in what you mean or foreswear commenting about tax structure and policy.

  14. Josh says:

    Socialist:

    You are where you are because of the choices you made and the effort you gave (or didn't) in your life. Please dont blame others for your situation. Everyone DOES have an equal OPPORTUNITY to move up the social "ladder". That does not mean that everyone takes advatange of that opportunity. Millions of people decide to take the easy route and not make sacrifices and work hard so that they can make a better life for themselves and their children. Millions of people decide not to study hard in school. They decide to have kids at a young age out of wedlock. They decide to do drugs or commit crimes. Those people should not be on an equal rung of the social ladder as responsible people.

    Did you stay in weekends studying in High School so you could get good grades and go to college? Or did you go out partying? Don't tell me you couldn't afford college. I dont want to hear it. Growing up in FL, every single State School offered me a free ride if I would stay in state to go to college. Just had to be in the Top 10% of my class. And I'm not even a minority! Most states are exactly the same way.

    If you went to college, did you pick a real degree? Something difficult that would give you the skills to get a good job out of college? Enginnerring, Accounting, Finance? Or did you major in Literature or Sociology or Philosophy because it was easier and you didnt have to study? If you had made the right choices you wouldn't have to work 2 crappy full time jobs for no money.

    And I don't want to hear "my mother was sick and I had to drop out of high school" to support my family. That is the response given by 99% of anonymous internet poster who dont want to admit that their situation in life is of their own doing. 1) There are a million social welfare programs that would have supported your family while you studied hard and went to college and 2) If you really are the one in a million where this case is true, then you should have received a lot more government aid then you did. But all of the other leaches on the system took the moeny away from the families that really deserved the help.

  15. Brian says:

    Margaret Thatcher said in 1976:
    "Socialist governments traditionally do make a financial mess. They always run out of other people's money. It's quite a characteristic of them. They then start to nationalise everything, and people just do not like more and more nationalisation, and they're now trying to control everything by other means. They're progressively reducing the choice available to ordinary people."

    What will we do when all the rich are gone? Then who will provide jobs for the rest of us and who will pay the taxes?

    Those that demand that the rich should pay more are thieves who legitimize their theft by having the government take from the haves and give to the have nots.

    By the way, I am not rich but I do believe in our United States Constitution.

  16. Angry says:

    Dammit...forget about taxes and tax brackets. What about jobs? This country needs jobs!! People who are unemployed and living off of unemployment benefits are angry because the system has let them down. It's about being dignified, being able to provide for your helpless family, and being provided for by the governmental system. When you're laid off and the government does nothing to provide for every American citizen who wants a job, there's something seriously wrong. Enough with this whole health care debate and talks of nationalized health insurance. Bottom line - the government needs to start subsidizing job creation big time. Stop giving our economic stimulus money away to the big name banks. Stop giving our economic stimulus money away to citizens in the form of one time pointless stimulus checks. It's about jobs, jobs, jobs. Once jobs are up and everyone is fully employed, then let's talk turkey.

  17. 120k in student loans says:

    I've busted ass for four years in college financing it myself and just got my first job (after busting ass to find that too). I started calculating how fast I can pay off my 120k student loan making 50k a year and I figured for years while in college that it would only take a few. WRONG, 38% of my paycheck is now going to taxes.

    ...time to get married I guess and play the system since the government is so damn involved in every facet of my life. Look in someone elses pockets Mr Obama! (try the 40% of Americans who pay squat in income tax!)

  18. Taylor says:

    Life isnt fair, the people making less think that someone making more is stealing from them, and the "rich" have some how unjustly by being successful should pay, often bad decisions make people less weathy, life is about building, it was said once the way to getting rich is slowly, my wife and I both have always worked, and finally after 30 years, make 150,000 a year, we live in a modest ranch style house, (15 year morgage paid for in 8 years) have paid for our educations in cash, helped with our sons education in cash, maxed out our K-plans, watch our pensions stolen or standing by to be stolen, we raise a garden, drive our cars untill the wheels fall off, we live by the rule of very little or no debt, we dont own toys and read allot, no big screen tvs here, dont even have a dish washer. Dont smoke, dont drink, Look back on your life and ask, did I do all I could by myself to get my standard of life, could I have made better descisions, could I have moved, gone to school, stayed married, having your yearly social security statments will help, yes life isnt fair you will always have people who have enough and want more and expect others to pay, job creation have left the states because of you letting them, letting your vote mean nothing, keep begging for more handouts and you will be poorer, sorry your life sucks, but buck up and get off your ass and go work for it where every you can find it, and just maybe you might appreicate what you have and earn more, and just in case you missed something, my wife and I have lost five jobs in the last 30 years. And as for the market crash, we beat that one by a year by getting out, we knew there was a train wreak coming and we did just fine, you have to pay attention to everything in life and if you cant why should others compound your problems by giving you more of our money.

  19. Taylor says:

    Well said Josh, I should have read your statements, before writting mine, you are right on target, John Wayne said it once, "life is tough, and it is tougher if you are stupid" what people are going through needs to be looked at as temporary, work harder, take your licks, and figure out how you are going to move onto the next phase of your life, beating your present condition, others have and so will you, your going to learn what your momm's didnt teach you, life is tough, but giving more of mine isnt going to make you tougher, it will make make it worse for you the next time, by the way the super mega rich they are going to tax, is in the 150,000 dollar range, thats me, there isnt enough super mega rich around to make a differance, and if you had not borrowed all of that money and paid that interst to the super banks, then they would not be the super banks. congrads, you helped make the problem by giving them your money, now you complain, figure out how much of your income over the course of your working life went to interest at a bank.

  20. Taylor says:

    ANGRY SAYS - you are right, the eco-movement have forced good jobs out and are doing there best to get the rest, feel for you, america used to make everything we used, and that was in my lifetime, buy american, but then the unions forced there elite needs on everyone else and took more then they deserved. Governement has taken over for the unions and become the taker....it is a mess....keep up hope some how, wish you luck

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