2010 Federal Income Tax Brackets & IRS Tax Rates

Since we are half way through 2010, I figured now was a good time to check out what the 2010 Federal tax rates were so you still had 6 months to make any changes to your withholdings if necessary. Every year there are always small changes to the absurdly wordy tax code, and 2010 is no different. (Good thing I have my brother, an accountant, to keep track of this stuff for me!) So if you were wondering, here are the marginal Federal tax rates for 2010, along with some other small changes that you may not have even noticed.

2010 Federal Income Tax Brackets

Singles:

• 10% Tax Bracket – $0-$8,375
• 15% Tax Bracket – $8,375-$34,000
• 25% Tax Bracket – $34,000-$82,400
• 28% Tax Bracket – $82,400-$171,850
• 33% Tax Bracket – $171,850-$373,650
• 35% Tax Bracket – $373,650+

Married Filing Jointly:

• 10% Tax Bracket – $0-$16,750
• 15% Tax Bracket – $16,750-$68,000
• 25% Tax Bracket – $68,000-$137,300
• 28% Tax Bracket – $137,300-$209,250
• 33% Tax Bracket – $209,250-$373,650
• 35% Tax Bracket – $373,650+

Married Filing Separately:

• 10% Tax Bracket – $0-$8,375
• 15% Tax Bracket – $8,375-$34,000
• 25% Tax Bracket – $34,000-$68,650
• 28% Tax Bracket – $68,650-$104,625
• 33% Tax Bracket – $104,625-$186,825
• 35% Tax Bracket – $186,825+

Head Of Household:

• 10% Tax Bracket – $0-$11,950
• 15% Tax Bracket – $11,950-$45,550
• 25% Tax Bracket – $45,550-$117,650
• 28% Tax Bracket – $117,650-$190,550
• 33% Tax Bracket – $190,550-$373,650
• 35% Tax Bracket – $373,650+

Please keep in mind that you don’t just pay the tax rate that matches your income. If you single file and your income is $40,000 per year (falling in the 25% tax bracket), you pay a 10% tax on the first $8,375 of income, 15% on $8,375-$34,000, and 25% on the final $34,000 – $40,000. You do not pay 25% on the entire $40,000 of income, a mistake many people make.

And here are a few more important pieces of information to keep in mind as we move forward in 2010:

Standard Deductions

• $5,700 for single filers
• $8,400 for head of household
• $11,400 for married filers
• $950 for dependents

Amount You Can Save In Your 401K Retirement Account

• Under 50? You can contribute $16,500 each year.
• Over 50? You can contribute $22,000 each year.

Amount You Can Save In A Traditional Or Roth IRA Account

• Under 50? You can contribute $5,000 each year.
• Over 50? You can contribute $6,000 each year.

The Mileage Deduction Has Decreased.

• In 2009 you were able to deduct $.55 per mile, but in 2010 this is now $.50 per mile. Medical travel is at $.165 per mile, and charitable travel is $.14 per mile.

Gift Tax Exclusion

• The gift tax exclusion stays the same at $13,000.This means you can give up to $13,000 tax free to anyone else, up to a maximum of $1 million in your life.

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