2010 Federal Tax Brackets: Plan Now Before It’s Too Late
2010 Federal Tax Brackets
Since the best tax planning usually comes throughout the year prior to the IRS tax deadline, right now might be a good time to revisit what your overall AGI might be this year and adjust your tax allowances so that you don’t get penalized or reduce your take home pay in other ways such as building up to the 2010 maximum 401K contribution.
You will want to avoid jumping up to the next tax bracket, if possible to prevent getting taxed at a higher level on that income. Here is another look at the 2010 federal tax brackets.
Tax Brackets for Singles:
Tax Brackets for Married Filing Jointly:
10% – $0-$16,750
15% – $16,750-$68,000
25% – $68,000-$137,300
28% – $137,300-$209,250
33% – $209,250-$373,650
35% – $373,650+
Tax Brackets for Married Filing Separately:
10% – $0-$8,375
15% – $8,375-$34,000
25% – $34,000-$68,650
28% – $68,650-$104,625
33% – $104,625-$186,825
35% – $186,825+
Tax Brackets for 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+
Keeping IRS Tax Rates Lower on All Income
Here’s the part of the equation that is a common misconception. Your overall tax rate is not at whatever bracket you fall in. Only the income that falls into that tax bracket is taxed at that rate. As an example, if you are filing single, your tax rate on your first $8,375 of income is at 10%, all income between $8,375 and $34,000 is at 15%, and so on.
So my point in addressing this at the halfway point of the year is this – if you calculate that you might have income that would be considered part of a higher bracket, you may want to take action to keep your income lower and avoid the higher taxes on the income that would fall into the higher bracket.
Don’t Forget the Standard Deduction!
Also, keep in mind that there are standard tax deductions that will lower your income, if you don’t decide to itemize taxes. The standard deductions amounts are as follows:
- $5,700 for single filers
- $11,400 for married filers
- $8,400 for head of household
- $950 for dependents
Other Income Lowering Tax Deductions & Tax Credits:
- You can donate to a 501(c)(3).
- You could donate a car to charity.
- Get a home energy tax credit.
- You could contribute to a traditional IRA.
Tax Bracket Discussion:
- What have you done to stay in a lower tax bracket this year?
- Which tax bracket did you max out in last year? Which are you predicting this year?