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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. Hamam says:

    All the staring / glaring / screaming at all the tax rates is a good trigger to get me thinking about steps leading up to the taxes. That is, why the tax? Well, where does it all go? And then, I start thinking about what these taxes are paying for.

    Idealistic simplistic:

    If I want less taxes, what services or governmental programs would I get rid of?
    There might be a lot.
    If I want more services and governmental avenues of aid, how much more should I be willing to pay? Sometimes I take those things for granted.

    Also consider if I believe the more taxes aren't directly related to more help. Well, how would I change that? (Alternate and more popular route: Apathy.)

    Maybe the self-dubbed "non-politicals" out there should think about being more actively involved in where their money goes. Warning: That might just lead to politics. Let's give our 2 cents- they're going to take it anyway. ;)

  2. Think says:

    Hey,
    I hear a lot of people requesting a higher tax on goods combined with a flat tax. While I'm not in favor of taxing the wealthy any more than they are, I must say that paying 10% on $1500 a month hurts more than paying 10% on $15000. Listen, if you're making $1500 chances are that extra $150 would go to food or utilities - i.e. basic necessities. If you're making $15,000 the $1500 you pay in taxes is probably not going to be a matter of life or death. You are still going to be able to pay for your basic needs plus have plenty left over to pay your bilsl
    The assumption that is made by many is that someone who makes $1500 a month is not working hard. I disagree. I've got three kids, I go to school full time and I work full time. Would you say that I don't work hard? I'm definitely not rich...but successful is a matter of opinion.
    Finally, a sales tax on goods is fine as long as it doesn't include basic necessities like food. If you make $5000 per month and spend $300 on food per month for your family, so does the guy making $2000. That's only 6% of your income, but it's 15% for him.
    By the way, I voted straight party Republican.

  3. retired early says:

    I retired at 56 after 23 years of teaching...then found out I will NOT be able to get any of the Social Security that I paid into for the YEARS of employment before and during 23 teaching years thanks to the WEP. Now why would I give up a $75,000 a year job, to live on $1910.12 a month teacher's pension...no, that's NOT a typo. Wanna know why. Because I'm tired of supporting this government. Let them support me for a change. Yes, I am below the poverty line right now and qualify for food stamps and a host of other government hand-outs. Don't have alot of extra cash each month to stimulate the economy, sorry. What a life, huh? All you haters out there...be kind.

  4. Giras says:

    The thing is, the government simply wasn't intended to be a charity organization--its not their job to take care of the poor. There's simply nothing in the Constitution that gives that authority.

    "We have the right as individuals to give away as much of our own money as we want in charity; but as members of Congress we have no right to appropriate a dollar of the public money."
    ~Davy Crockett

    If the government cuts off this unconstitutional spending and lowers the tax rate, then people will have more money to start businesses, hire people, and fix up the economy.

  5. Real American says:

    Dear socialist whining (so called) american. I call you (so called) because you dont deserve to be called an American. You are a crybaby little punk. Give me, give me, give me, is all you say. You are a slug. If you cant make it in this country, get an education, get a job, and support your lazy ass, you are a slug! You are a slug if you are always crying and need a government or family members to support your stupid ass! You should feel ashamed. I'm a former US Army Infantry grunt. I dont like weakass punks like you. I know what toughness is and you are not it. You are not a real American. Your not an asset to this country. You are a liability. Move to Europe. That is where they have socialism and that is where you belong. You need the government to babysit you! Go Obama!

  6. Frank says:

    You all reallize that the higher tax brackets ONLY apply to to the income above that threshhold.

    So...if you're in the 35% tax bracket by 10,000 a year...that doesn't mean that ALL of your income gets taxed at 35%, only that last 10k. The rest of your income gets taxed at the lower rates. Taxes are the price of living in a civilized society.

    As for the claim that lower taxes create jobs...there is absolutely ZERO empirical evidence to back that claim up. In fact, salaries, if used as an expense on the business balance sheet reduce taxable income better than any lowered tax percentage does.

    As for the claim that there's no incentive to make more money because you're just going to get taxed more...HOGWASH!!! If I work harder and get myself 50k and jump from the 28%-35% highest tax bracket, then I get to keep $32500. That is not an insignificant amount of money and the 17500 I paid in taxes on that 50K(since ALL of it is in the 35% bracket) is nothing. I've still netted enough to pay cash for a really nice new car.

  7. wow says:

    I can't believe all this going back and forth. Everybody needs a job. The community needs people to work all kinds of jobs. What would happen if everybody was a doctor? or lawyer or even a Bill Gates? Sometime people need to appreciate the people that work in the stores and restaurants or even gas stations. I think the government should be more fair in taxing people to suit their means. I don't think people who make a six figure income is "rich" just maybe better off than some. My husband is a produce manager in a supermarket and we chose for me to stay home with the kids because we believe it is important for them to be raised at home by us rather that have them grow up in daycare with strangers. There are so many facets because there are so many familys that have different situations and we all need to appreciate that instead of trashing each other.

  8. TimT says:

    @Frank:

    "As for the claim that lower taxes create jobs��there is absolutely ZERO empirical evidence to back that claim up. In fact, salaries, if used as an expense on the business balance sheet reduce taxable income better than any lowered tax percentage does."

    What planet were you living on during the 80's and 90's? And yes, salaries are a deductible expense... the business has to spend $3 to save $1 on taxes.

    "Taxes are the price of living in a civilized society."

    Being able to keep the fruits of one's labor is what ensures we live in a free society. But Marxists such as yourself put the collective above the individual.

    "As for the claim that there's no incentive to make more money because you're just going to get taxed more��HOGWASH!!! If I work harder and get myself 50k and jump from the 28%-35% highest tax bracket, then I get to keep $32500."

    Well, you're an idiot then. If you take progressively more and more of each dollar I earn, eventually the diminishing returns make it such that I'm not willing to trade my time to get that piece of a dollar.

  9. Fake American says:

    Real American, if being a fake American is being the opposite of you, I'll take it. I don't care if you defended this country. You are not a real american. You are a disgrace to those who do and did serve if you were only defending the country for the half you deemed worthy.

    And ya, my sister's daughter is autistic. She will never work a real job and will always be dependent on social programs. I'll suggest to my sister that she sends her over to Europe so you don't have to worry about being taxed.

  10. SOCIALISM IS BS says:

    Socialism is crap.

  11. Deco tape says:

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  12. ms.kim says:

    To all of you who believe the answer to this country's economic problems is to tax the heck out of the rich, you need to quit your pity party and realize that alot of those "rich people" are small business owners that employ the majority of America. As a small business owner myself, I know how tough it is to expand a business and in turn create more jobs when a more than a third of your profits goes out the door in federal, state, county and city business taxes. Why should someone who has worked hard, saved and spent wisely be asked to contribute more. It seems to me that is what is really unfair!

  13. Dale says:

    Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
    The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59. So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beers by $20. Drinks for the ten now cost just $80.' The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so: The fifth man, like the first four, now paid nothing (100% savings). The sixth now paid $2 instead of $3 (33%savings). The seventh now pay $5 instead of $7 (28%savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 (22% savings). The tenth now paid $49 instead of $59 (16% savings). Each of the six was better off than before and the first four continued to drink for free, but once outside the restaurant, the men began to compare their savings. 'I only got a dollar out of the $20,' declared the sixth man. He pointed to the tenth man, 'but he got $10!' 'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too.' 'It's unfair that he got TEN times more than I!' 'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two, The wealthy get all the breaks!' 'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!' The nine men surrounded the tenth and beat him up.

  14. John says:

    Half of these posts are socialist and just crazy. I'm not sure who all the rich people are some of your posts are referring to but I don't see my family nor any of my hard working upper middle class friends skirting around taxes and off buy big boats and beach houses. They are trying to save for their OWN retirement, their children's education, and at the same time supporting the other 49% of Americans who PAY NO TAXES. I am still looking for where in the Constitution it says "the harder you work the more you get to support someone else". I don't see many young college students sharing their hard earned GPA with the friend who got drunk at the frat house every night so they too could make it through college nor do I see most people willing to work 1/3 of someone's shifts at the factory while that someone is sitting at home still getting paid....SO why is it fair...the more you make the more you must pay???? If we applied this principle to other aspects of our society.....everyone would be calling for an end tomorrow....but as long as someone else can pay .....it's good I suppose.

  15. Richard Stanislawski says:

    Since when is progressive socialism a fair share? I think too many of you socialists have turned away from God and expect the government to take care of all of your needs from cradle to grave. Yes you are free to believe what you want, but I believe that our founding fathers had it right, one nation under God. It's not perfect but it got us to where we are today. I don't want to see America going the way of communist Russia and China. So as far as taxing the rich excessively, grow up, they earned it not you.

  16. mike d says:

    Get a grip all you anti-"socialists" out there. You should be getting mad that we don't do more to ensure that those least able to care for and protect themselves have a safety net of healthcare, education and housing. Who do you think it is who picks your produce at the market, cleans your house, teaches your kids, douses your burning home, keeps your neighborhood safe, cares for you in the ER, drives that bus or train, repairs the highway? They do not always live in abject poverty , but they are often the working poor, or these days simply unemployed. To hear you whining, you'd think that "those" people had made a lifestyle choice! Really? You'll get no sympathy for your enormous student loans out of me. You made an investment choice, so deal with it!

  17. Praetor says:

    The tax system, explained with beer (not my original work):

    Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they pay their bill the way we pay our taxes, it would go something like this:

    The first four men (the poorest) would pay nothing.
    The fifth would pay $1.
    The sixth would pay $3.
    The seventh would pay $7.
    The eighth would pay $12.
    The ninth would pay $18.
    The tenth man (the richest) would pay $59.

    So, that's what they decide to do. The ten men drink in the bar every day and seem quite happy with the arrangement, until one day, the owner throws them a curve. 'Since you are all such good customers, he said, I'm going to reduce the cost of your daily beer by $20.'

    Drinks for the ten now cost just $80.

    The group still wants to pay their bill the way we pay our taxes so the first four men are unaffected. They will still drink for free. But what about the other six men �� the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realize that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggests that it would be fair to reduce each man's bill by roughly the same amount, and he proceeds to work out the amounts each should pay.

    And so:

    The fifth man, like the first four, now paid nothing (100% savings).
    The sixth now pays $2 instead of $3 (33% savings).
    The seventh now pays $5 instead of $7 (28% savings).
    The eighth now pays $9 instead of $12 (25% savings).
    The ninth now pays $14 instead of $18 (22% savings).
    The tenth now pays $49 instead of $59 (16% savings).

    Each of the six is better off than before. And the first four continu to drink for free. But once outside the restaurant, the men begin to compare their savings.

    'I only got a dollar out of the $20,'declares the sixth man. He points to the tenth man,' but he got $10!'

    'Yeah, that's right,' exclaims the fifth man. 'I only saved a dollar, too. It's unfair that he got ten times more than I!'

    'That's true!!' shouts the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!'

    'Wait a minute,' yell the first four men in unison. 'We didn't get anything at all. The system exploits the poor!'

    The nine men surround the tenth and beat him up. The next night the tenth man doesn't show up for drinks, so the nine sit down and have beers without him. But when it comes time to pay the bill, they discover something important. They don't have enough money between all of them for even half of the bill!

    And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may
    not show up anymore.

    In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

  18. Tori says:

    First of all I would like to say to all of you people who are complaining about lazy Americans that benefit from the system; that is irrelevant when we are talking about tax brackets because they don't have jobs therefor it doesn't matter what the tax brackets are their taxes will be still be 0. Now when we are talking about the working class that's a different story because as long as you have a full time job you are not lazy therefor the lazy argument is again irrelevant. Someone who works 40 hrs a week making minimum wage doesn't work any less hard than someone who works the same hours making more money. In fact in many cases their jobs are harder but the minimum wage person only makes approx. $14,000. That is less than $1000 a month after taxes and you are saying they should have to pay more taxes so that the rich can pay less? Please tell me how anyone can live off of that. There is nothing wrong with someone getting a job that doesn't require them to go to college. Someone has to work those jobs. If everyone went to college all we would end up with is a bigger struggle because now those people would have college debt too. If you really want equality in taxes and you are one of those people in the higher brackets; Why don't you try charging less for your services and paying your employees more so they can afford to pay more taxes. You get rich while the lower class struggle to survive and your complaining. Yes, there are lazy people out there who don't have jobs or choose to only work part time so they can keep whatever free benefits they are getting but if you want to do something about that, waisting your time complaining on a blog isn't going to do any good. Also, for your info, out of all of the Advanced Industrial Countries, our social welfare programs are one of the lowest and we are suppose to be the richest nation. That says something about American greed. A single person living in America should not have to work two or more jobs just to have their basic needs met (food, shelter, health, etc.). It is wrong that our system is set up this way and greed is the only thing to blame for that.

  19. Tori says:

    Oh and I would like to add that just because your in one of the higher tax brackets doesn't mean you are paying that percentage on all of your taxes. You only pay that percentage on the portion of your income that falls into that bracket. Everyone pays 10% for their first $8,375, 15% on their income between $8,375 and $34,000, 25% on their income between $34,000 and $82,400 and etc (this is based on a single person). See the following example from www.obliviousinvestor.com.

    Example: Samantha's 2010 taxable income is $40,000. This puts her in the 25% tax bracket. If that meant that all of her income was taxed at 25%, she would be paying $10,000 in income taxes. Instead, she'll be paying much less. Samantha will actually end up paying $6,181.25 calculated as follows:
    1) Her first $8,375 of taxable income is taxed at 10%. ($837.50 in tax)
    2) From $8,375 to $34,000 she's taxed at 15%. ($3,843.75 in tax)
    3) From $34,000 to $40,000 Sam is taxed at 25%. ($1,500 in tax)
    4) $837.50 + $3,843.75 + $1,500 = $6,181.25

    http://www.obliviousinvestor.com/tax-brackets/

  20. Luis says:

    All these sociaist want the rich to stop whining. Well I want you to get your hands out of my pocket and stop being lazy, worthless excuses for human beings. My father came from abject poverty to becoming a six figure professional doctor and two of his kids becoming doctors as well. The secret is called WORK! The more you tax me and my businss, the less I pay you. That's how bussines works. The more taxes you put on the business owner, the less incentive they have to pay higher wages. If you don't think that's true you must not own a business.

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