Tax Brackets and Tax Rates

Elizabeth Rosen
by Elizabeth Rosen, Contributor

MARGINAL TAX BRACKETS

Many people do not understand marginal income tax and how it affects them. One of the most common misconceptions is that moving into a higher tax bracket (e.g., from a salary increase) has a negative impact for the taxpayer because more tax is due.

For example, if you move from the 25% tax bracket to the 28% tax bracket, you may think that all of your income is taxed at that higher rate. However, only the money that you earn within the 28% bracket is taxed at that rate.

The marginal income tax rate system is known as a “gradual tax schedule.” That basically means: as you make more money, you pay more tax.

There are currently 6 marginal income tax brackets for each filing status:
10 %, 15 %, 25 %, 28 %, 33 %, and 35 %

Your marginal tax bracket is the highest tax rate that you will pay on your income.

TAX RATES

2010

Listed below are the 2010 individual income tax rates, organized by federal filing status.

Single (Rate Schedule X)
Taxable income between $0 and $8,375 ― 10% tax rate
Taxable income between $8,376 and $34,000 ― 15% tax rate
Taxable income between $34,001 and $82,400 ― 25% tax rate
Taxable income between $82,401 and $171,850 ― 28% tax rate
Taxable income between $171,851 and $373,650 ― 33% tax rate
Taxable income of $373,651 or more ― 35% tax rate

Married Filing Jointly or Qualifying Widow/er (Rate Schedule Y-1)
Taxable income between $0 and $16,750 ― 10% tax rate
Taxable income between $16,751 and $68,000 ― 15% tax rate
Taxable income between $68,001 and $137,300 ― 25% tax rate
Taxable income between $137,300 and $209,250 ― 28% tax rate
Taxable income between $209,251 and $373,650 ― 33% tax rate
Taxable income of $373,651 or more ― 35% tax rate

Married Filing Separately (Rate Schedule Y-2)
Taxable income between $0 and $8,375 ― 10% tax rate
Taxable income between $8,376 and $34,000 ― 15% tax rate
Taxable income between $34,001 and $68,650 ― 25% tax rate
Taxable income between $68,651 and $104,625 ― 28% tax rate
Taxable income between $104,626 and $186,825 ― 33% tax rate
Taxable income of $186,826 or more ― 35% tax rate

Head of Household (Rate Schedule Z)
Taxable income between $0 and $11,950 ― 10% tax rate
Taxable income between $11,951 and $45,550 ― 15% tax rate
Taxable income between $45,551 and $117,650 ― 25% tax rate
Taxable income between $117,651 and $190,550 ― 28% tax rate
Taxable income between $190,551 and $373,650 ― 33% tax rate
Taxable income of $373,651 or more ― 35% tax rate

2011

Listed below are the 2011 individual income tax rates, organized by federal filing status.

Single
Taxable income between $0 and $8,500 ― 10% tax rate
Taxable income between $8,501 and $34,500 ― 15% tax rate
Taxable income between $34,501 and $83,600 ― 25% tax rate
Taxable income between $83,601 and $174,400 ― 28% tax rate
Taxable income between $174,401 and $379,150 ― 33% tax rate
Taxable income of $379,151 or more ― 35% tax rate

Married Filing Jointly or Qualifying Widow/er
Taxable income between $0 and $17,000 ― 10% tax rate
Taxable income between $17,001 and $69,000 ― 15% tax rate
Taxable income between $69,901 and $139,350 ― 25% tax rate
Taxable income between $139,351 and $212,300 ― 28% tax rate
Taxable income between $212,301 and $379,150 ― 33% tax rate
Taxable income of $379,151 or more ― 35% tax rate

Married Filing Separately
Taxable income between $0 and $8,500 ― 10% tax rate
Taxable income between $8,501 and $34,500 ― 15% tax rate
Taxable income between $34,501 and $69,675 ― 25% tax rate
Taxable income between $69,676 and $106,150 ― 28% tax rate
Taxable income between $106,151 and $189,575 ― 33% tax rate
Taxable income of $189,576 or more ― 35% tax rate

Head of Household
Taxable income between $0 and $12,150 ― 10% tax rate
Taxable income between $12,151 and $46,250 ― 15% tax rate
Taxable income between $46,251 and $119,400 ― 25% tax rate
Taxable income between $119,401 and $193,350 ― 28% tax rate
Taxable income between $193,351 and $379,150 ― 33% tax rate
Taxable income of $379,151 or more ― 35% tax rate