dcsimg

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.

Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.

Feed for this Entry

436 Responses to “Federal Tax Brackets 2010 | Income Tax Brackets 2010 | Money Blue Book” 

  1. TimT says:

    BRH,

    You've got the idea that rich people get their money from their grandfathers? Sorry only about 2% of current millionaires got their money through inheritance. And you think that rich people just sit around the pool while interest and dividends roll in? This is what most Marxists like to say to create wealth envy. It's easy to steal from someone if you despise them.

    See if you can follow me here: I decide to invest my money instead of blowing it on beer, cigarettes, and lap dances. I'm taking a risk here. The investment may go bust and I get nothing, not even a woody because of some cute thing squirming on my lap. The money I used as seed money was earned by me. So I've spent a portion of my life earning money that I'm then risking to get more money. Generally, the higher the risk the higher the POTENTIAL reward. (Note the emphasis on "potential".)

    Also, the "rich" may decide to just stuff their money under a mattress. Maybe they have enough to last the rest of their life. Know what? They pay ZERO income tax every year because they have no income! Instead, people who are *trying* to become rich are taxed by your wonderful progressive income tax.

    And your 5,000 page tax code (more like 80,000+ pages) is not that long to be "fair". It's to buy votes for politicians. If you believe otherwise, you're living in a dream world. Politicians long ago figured out they can influence behavior with the tax code. Want to "help" some pet industry who has lobbyists that visit you frequently? Simple!
    Give a tax break to the industry or make the product somehow tax deductible for the people who buy it! Presto!

    I don't know where you get the idea Denmark and Holland have a higher standard of living. In fact the average POOR person in the US has a higher standing of living than the average person (not poor) in Europe. And we now see the outcome of the little Socialist utopias over in Europe.... Greece, Portugal, Spain, Ireland, Italy, Hungary... they're all in various stages of meltdown.

    Oh, and the "greatest political system ever" wasn't generated by our tax code. That didn't come along until the progressives (like that evil bastard Woodrow Wilson) managed to trick everyone and get things passed like the 16th amendment. ("The income tax will only apply to the top 2% of income earners, you know, those evil rich bastards in the northeast.... so all you southern, western, and middle states feel free to ratify the amendment... it'll never affect you!") No the United States was created by men who understood what freedom and liberty meant. They risked their very lives to secure that freedom. That freedom and liberty created an environment where a bunch of backwards colonies could become the world's sole remaining superpower. We'll see how long that lasts with the current crop of anti-capitalists in charge. And a bunch of sheep electorate who feel it's "fair" for a bunch of hack politicians to use the police power of the State to confiscate the life's work of someone and give it to someone else.

  2. DUDEINTAMPA says:

    BRH your totally correct on the tax system, but way off the mark on our progressive poltical system. Also you mention congress doing a good job. Bull Shit my friend. All they are worried about is their offshore bank accounts set up by Big business and lobbyist on capital hill.

    Congress does not give a rat ass about the working class people. All they know how to do is tax and tax and tax. Look at your cell phone bll or phone/cable bill. Tax on everything. What really pisses me off I struggle now to pay things like a cell phone but yet we give those on welfare free cell phones,(aka I mean single mothers on welfare) I think thats wrong. If these congress people sit there and preach social justice and spread the wealth and equality than everyone should get free cell phones no matter what you make. Thats equality. If you give hand outs to certain people thats wrong they need to go out and work.
    I feel those on welfare should have to work for those checks instead of sitting home. Send those illegals back and teal these welfare people to earn your check you have to pick fruit and vegetables, pick up trash. Cut the grass.
    Its that simple. Our government is creating a generations of lazy people. And my taxes should not help to create more of these people.
    The tax code is wrong. I think people should be tax on a part time or full time pay scale. Meaning those that work 40 hrs should only be tax on 40hrs. Any overtime or bonus money should not be tax. Part time would be harder to set up you would have to find the medium hours part time people work than figure out what to set theirs at.
    This way I bust my ass to get vaction mnoney or retirement money I should not be punished for it.

  3. JES says:

    Oh, the paranoia is very deep. The evil government is out to take everything you have. Personally, I think that the tax code needs to be a few pages longer so that they can close all the loopholes in the earned income credit and the child tax credit. Sit down sometime and figure out how much a married couple with two children pays in tax compared to an unmarried couple with two children. In addition, have one person earn about $60,000 a year and the other one earn about $15,000 a year. Be sure to do the calculations in all the legal manners so that you get the best answer for each scenario. If you do not find that the unmarried couple, living together, has a much lower overall tax liability, you are doing something wrong. So, my advice is, don't get married, just live together.

  4. JES says:

    DUDEINTAMPA......I think everyone CAN get a free cell phone. Just sign up for a new cell phone plan and you can get a free cell phone. Now if you really mean free cell phone service for welfare recipients you are wrong on that point too. Discounts are provided to 'low income' individuals in some states and in some cases individuals are provided with limited use phones that can be used for emergency calls. It is provided under the assumption that all people should have access to emergency services whether they are rich or poor. Check it out.....most of these programs were started prior to the 2008 election, which to my recollection is when Obama was first elected President.

    I can just envision how companies would increase their number of employees if workers were only taxed on the first 40 hours. I assume that you also mean you don't want to have social security and medicare withheld after 40 hours. That would be a great savings for employers and they will work you as much overtime as humanly possible and not hire anyone else to handle any extra workload. You will be working overtime whether you like it or not. Great way to get the economy moving, but it will give you more people to call lazy because they can't find work. And you can complain about being overworked. Good luck with that.

  5. KenC says:

    Once again...the tax code needs to be 1 page long or less. It simply needs to say that (if you want income tax) 10% (or pick a figure) of everybody's annual income will go to the government to pay for national defense and other thing AS AUTHORIZED BY THE CONSTITUTION. There needs to be a clause that states that the percentage cannot be raised...period. That way, everybody pays their "fair" share (the same percentage of what they earn).

    The alternative approach (if you believe in a consumption or ad valorem tax) is that everybody pays a 15% (or pick a figure) on everything they spend (ie: same as the European VAT) and that will go to the government to pay for national defense and other thing AS AUTHORIZED BY THE CONSTITUTION. There needs to be a clause that states that the percentage cannot be raised...period. Again, that way, everybody pays their "fair" share as "rich" people spend a whole lot more than poor people do.

    The bottom line is that if you pay no taxes at all, you have no respect for the system not any respect for the people who do support this country. The worse thing that ever happened to us is the payroll deduction...it masks how much the average person is paying in taxes and if they get money back...they think they got it from the government.

    The government produces nothing...they only consume!

  6. Mike C says:

    Fear is driving this economy and will continue to do so until the majority begins to see what is really going on. Here's what it's all coming down to: The so called 'rich' earners of this country (us capitalists) the members of your community that pay out salaries to all those blue collar folks who bash the so called 'rich' by saying; 'rich people should not receive tax breaks, should not get any additional incentives��' even though the so called 'rich' invented the business idea and took all the financial responsibility for setting up the company, and hired all the necessary people to make the business concept feasible and solid.

    Come on folks, do you really think that business owners and execs would rather not pay their employees fair salaries with benefits as opposed to doing what this economy is forcing them to do�� trim their damn fat! That is the whole point of a free market. When times are good, pay is good. And when times are tough, you get lean. It's logical economics 101.

    However, our government (yes that includes Obama, Bush, Clinton, Etc) in conjunction with the real 'rich' the World Banking Organization says; to hell with logical economics, we want you all to take an entirely different approach. They want you all (We the People's Treasury) to continue to borrow from intergovernmental holdings (the Federal Reserve), a private for Profit Corporation made up of key members of the World Banking Order. The reason is to financially enslave not only our generation, but that of our great, great grand children as well. When the government speaks of our federal deficient exceeding several trillion dollars, they do not speak of the multiple trillions of more dollars that We the People's Treasury owes the Federal Reserve. Conspiracy theory? I think just conspiracy!

    As a result of this purposefully created troubled economy, the so called 'rich' are being forced to consider taking a leaner direction in their budgets, and look to innovative solutions just to keep their business alive.

    Computers and automated machines (robots) can do the job today of multiple people, and do it far more efficiently, economically and consistently, and never once complain. Heck, now there are even machines that fix the production line machines when they break down. Health-care costs continue to skyrocket and the 'land of the free market' is rapidly falling into extinction.

    Here is one thing that this rapidly falling economy is forcing into extinction�� the blue collar worker. Blue collar workers are going to need to innovate themselves through new education in an entirely new career path or suffer the way of Raphus Cucullatus (the Dodo Bird).

    Are there large corrupt companies out there playing the game that the World Banking Order wants them to play? Absolutely! However, there are many small, medium and large enterprising entrepreneurs today that are not playing that game at all, but are victims just like you of it.

    It is time for Americans of the earning community to see beyond the five inches in front of their faces and 'get a clue' to the real problems that lie ahead. We are all about to be captured into complete financial slavery by our own government, foreign governments and a World Banking System that wants only two things; total power and financial domination over all.

    Corporate America is NOT the problem. The fact that the Government of the United States is a Corporation�� is a problem!

    If you believe I am lying�� then continue to do what you currently do, walk aimlessly into utter darkness and despair. This is not going to get any better, no matter what Obama tells you. If you think that my words make logical sense then figured out what side is right for you and pick a damn side; then stay loyal to it no matter what! The salvation of our country and its entire population is at hand.

    Thanks for reading!

  7. R.Boggs says:

    www.fairtax.org

    this will solve a lot of problems as it relates to how individuals are taxed and for those who claim it would hurt the poor, check the different studies on the site, the poor would actually have a LOWER tax liability under a fairtax. Check it out for youselves!

  8. Econ Student says:

    If there is one thing anyone should learn from an economist its that relative economics is a psychological phenomanon (sp?) that really is IRRATIONAL. The actual spending power of any other individual has no short run effect on your purchasing power. People think it does, but it just doesnt. If I have a 10 inch plasma TV, and my neighbor has a 15 inch one... does that make mine smaller? Because someone may pay more for the 15 inch TV, does mine become cheaper? No, and yes this is relevant to money, because money itself can be quantified as a good, just a highly liquid one. If I make 10,000 a year and Tim makes 15,000, do I now make less money?

    This idea that others having more intrinsically makes you poorer is the most outlandish sophism I have ever witnessed. In other words ITS BULLSHITE! Im lucky. I have lived a very comfortable life. My dad was not so lucky. He worked 2 jobs throughout highschool, took student loans and went to college, then took out more loans and went to Grad school for business. The reason why I am lucky is that we live in a system that rewards that. The playing field will never be completely even. In socialism, you think someone having a friend in government wont get a bigger slice of the pie? Or someone who's favored? Its not that a lower tax system is super awesome sweet perfect. Its that it's better than the alternatives. Economics is not a perfect science. It just tells us ehh... it could be worse... Also what people fail to realize is that in highly socialized system the lower classes are often even worse off than capitalist lower classes (i.e. check pre and post industrialization lower class living standards and note that the revolution also correlates with a massive opening up of markets...).

    Also what no one is talking about is that for every 1 dollar taxed about 30% of it is lost (according to the Harvard school of Economics) to literally nothing. Its deadweight loss. Its court fees for tax cases, and tax enforcement. Its not necessarily a redistribution of wealth... its shrinkage (a la Seinfield).

  9. DUDEINTAMPA says:

    JES:

    Sorry my friend but the Cell phone with these quote on quote plans are not free. You have to sign a Two year contract which is BS, but looking at your cell phone bill you pay for the poor to have a free cell phone. The plan does not relate to those making over a certain amount of money which I say is unfair. Its either everybody gets it or nobody at all. Which I agree with the last nobody should get the free cell phone, one must work to get one. I don t believe material things such as phones, houses, and automoblies should be subdeized to lower income people. Giving things to people free or even cut in half compare to what I pay is not right. It makes people Lazy. To get ahead in life one must work. Its not the responablities of myself and others who work hard to help these people get things free or pay less for what I myself struggles to pay for. Its unfair and unjust. If these people are hungry or need help training to get a job I say help them, but material things such as some of the things I listed above should not.

    Next I am 36 I can make more money for my retirement by saving it in a savings account than letting the government holdingit or spending for me than giving me an IOU. Also Social security was not setup for people to live off of. It was just a little money to help people when woman lost their husband in the great World war 2, but the progressives strecthed that. Social Security is a progressive social program and needs to be gone. Its sad that those who put pennies into social security come out way ahead.

    If we got rid of many of these programs that enforce socialism our country would begin slowly to get better. Plus people would have to work.

    Now not taxing the 40 hour work week would help the economy. It would let those who got that extra money spend it. Companies would not work people to death. That a sterotype that union members would say.

  10. Dave says:

    Your money has no intrinsic value w/o a stable government to protect that quality. It is just an abstraction. If you don't like paying your taxes, which is the only sacrifice most civilians will ever be asked to make, maybe you don't deserve the privilege of living here.

  11. Mike C says:

    You nailed it Econ Student! Right on!

  12. Tom says:

    Taxes are not intended to be fair - their intended to raise revenue. Those that benefit from government services (defense, roads, social stability, pro-business policies, etc) should pay a pro-orated amount based on the benefits they gain from those services. In the US we have decided (right or wrong) to measure the benefit an individual receives from government services based on income levels. The more income the greater the benefit and, as a result of these greater benefits, the more taxes owed. The real complaint should not be how the government raises revenue (individula income taxes) nor where it comes from but rather how mush the government is spending and what it is being spent on.

  13. Chris says:

    It's interesting how a lot of people claim that to be "fair"; the rich have to be taxed more so that the poor can have more. How is that fair in any way? I'm in the middle and I believe that a LOT of you lost the concept of what taxes really are about. Taxes are supposed to be a communal service that is provided to the payers. As such; it covers costs for cops, schools, fireman and etc. I honestly don't believe that the rich should pay more for the same service. If they are CEOs and etc; then they did that (mostly) themselves and good for them; they probably don't see their family much because they're in meetings all the time; but since time is money; they work more and get paid more; good for them.

    Don't you get just yet that all of the old tax rules that used to be aimed at the rich people are actually starting to bite the middle man more so since the levels do not change proportionality? (see the mostly inflation-free AMT for more info).

    Being taxed in income level is a little sad. Ideally; we would only be taxed on our purchases or estate (ie: where the services are).

  14. Nick says:

    I don't like taxes any more than anyone. But I am happy that I live in a country that has among the lowest income tax rates in the industrialized world. And the $800 Obama tax cut last year helped greatly.

    Most of you don't remember when the high end of income taxes were >90% in the Eisenhower administration. Now the highest rate is 37% I think.

  15. Bankers Chad says:

    The biggest problem is not who is paying what tax bracket, the problem is the wasteful spending by the Federal and State governments. I bounce between the 28% and 33% tax bracket. I am ok with paying double the taxes as someone making less income. I did not go to college, my parents have no money, my grandparents have no money. A few ideas...
    1) Income Tax EVERY working adult - (Illegal or Not)
    2) Cut assistance to anyone ILLEGALLY in the country REGARDLESS of where they came from.
    3) Require Lawmakers to have the SAME HEALTHCARE SYSTEM the people that voted for them have.
    I could keep going...

  16. Kay says:

    I'm frankly appalled at the amount of people who believe that the "rich" should be taxed more. I am by no means part of the "rich"; I'm a college student, who busts my a** as a server to make ends meet because my parents can't afford to pay for me. However, I am not, like so many who write on here, bitter about my "poor" status in the world. My parents did not go to college, but they worked very VERY hard to get where they are - and where they are is in the 25% bracket, the "rich" bracket, the "frivolous" bracket, the "share more" bracket. Yet they have car payments, and house payments, and insurance payments, and their home is falling apart - they need as much money as they can keep and always have. But my parents have worked their entire lives to make it to this point, and they came from nothing - my mothers parents were poor immigrants here. Yet they have never taken federal financial aide of any kind.

    My father has always posed one question to me:
    "What entitles me to anything someone else has worked for?"

    I've spent my life thinking of that question. I do not deserve anything that someone else spent even a few seconds of their time earning. Some will argue that there are people who are "handed" money. Sure, there are people in America who have inherited their riches. Sure, there are people who may have been lucky in their earnings. But why do I deserve any of it? For spending my time filling out a form? If I can live in a city, go to college, pay all my bills - rent, car insurance, car payment, utilities - then who is to say that THEY deserve more? It takes a little more hard work and a little less complaining.
    I will never ask for anything I don't deserve - and I don't deserve anyones money for simply existing at a much lower income bracket.

    The top 1% of earners in the US pay over 40% of the taxes. Furthermore, the steeper the taxes, the less money is donated to charity, the "rich" are those who are the philanthropists - and donations are at the lowest they've ever been since they began being recorded in the 1950s. (and in my opinion charities spend the peoples' money better than the government ever could).
    Food for thought.

  17. ras says:

    The reward for being successful is you make more money and wind up keeping more, a lot more.

    We are just in the 33% bracket (after deductions &c) and save over $70,000/yr pretax; between 2 401ks, deferred income, and 2 employers matches. This is before several thousand in charitable contributions and over $20,000yr of mortgage interest deductions. The means of doing the same are avail. to most people.

    The people who have the most legitimate complaint are those making less than $50,000/yr household who cannot for budgetary reasons take full advantage of 401k savings.

    The great myth is that the tax system punishes people for making more money, it actually rewards people at an accelerating rate. The next dollar you make above the SS maximum is taxed at a 6.3% lower rate.

    yours,
    ras

  18. OBAMA YO MAMA says:

    Increasing taxes slows economic growth. This is not the time to be increasing taxes...in a recession... If you want to increase taxes ... do so when times are good ... not now ...

    I pity those who actually think this tax increase is actually going to helping them by making the economy stronger ... Please educate yourself ... Ignorance is bliss ... until you no longer can ignore ... or want to know the truth...

    Get out and challenge yourselves to understand how to fix this country as individuals.

  19. Rob says:

    I think the current tax system is pretty fair. Afterall, it's not like if you make 100k you pay 25% of taxes on all of it. You only pay 25% on the last 32k that you make. That means the system is perfectly fair relation wise between the brackets. So, if you make just enough to get into a bracket, it's not like your getting screwed.

    The only change I would make is have poor people a little. Like Maybe make a 5% bracket for the next level down. I think it's a problem when only 50% of americans pay income taxes...I mean really. Everyone uses our countries servies about the same. Police, army, mail, roads, etc.

    The last change I would make is to have more brackets after 35%. It is unfair that someone who makes 500k a year gets taxed at the same rate that a person who makes 10 million does. We should have atleast a 38% and maybe a 41% tax bracket as we get into the millions.

    There are also a lot of loopholes that could use fixing. One's that come into mind include hedge fund manager loopholes which have a maximum tax of 15%.

  20. Amanda says:

    wow. comments have been posted to this for almost a year. i bet that's a record.

Leave a Reply



If you liked this site, please Add To Bookmark and/or Subscribe To A FeedReader

Search this site