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Yearly Tax Rates

2009 Federal Income Tax Brackets

Income
Tax Rate
Single Married Filing Jointly / Qualifying Widower Married Filing Separately Head of Household LTCG/
QD*

 

over up to over up to over up to over up to Rate
10% 0 8,350 0 16,700 0 8,350 0 11,950 0%
15% 8,350 33,950 16,700 67,900 8,350 33,950 11,950 45,500 0%
25% 33,950 82,250 67,900 137,050 33,950 68,525 45,500 117,450 15%
28% 82,250 171,550 137,050 208,850 68,525 104,425 117,450 190,200 15%
33% 171,550 372,950 208,850 372,950 104,425 186,475 190,200 372,950 15%
35% 372,950   372,950   186,475   372,950   15%

* Long-Term Capital Gains and Qualified Dividend

2008 Federal Income Tax Brackets

The previous year’s numbers are also provided to give you an idea of some of the changes.

Income
Tax Rate
Single Married Filing Jointly / Qualifying Widower Married Filing Separately Head of Household LTCG/
QD*

 

over up to over up to over up to over up to Rate
10% 0 8,025 0 16,050 0 8,025 0 11,450 0%
15% 8,025 32,550 16,050 65,100 8,025 32,550 11,450 43,650 0%
25% 32,550 78,850 65,100 131,450 32,550 65,725 43,650 112,650 15%
28% 78,850 164,550 131,450 200,300 65,725 100,150 112,650 182,400 15%
33% 164,550 357,700 200,300 357,700 100,150 178,850 182,400 357,700 15%
35% 357,700   357,700   178,850   357,700   15%

* Long-Term Capital Gains and Qualified Dividend

Changes in Federal Income Tax Rate for 2009

The marginal tax rates are pegged to inflation and numbers are annually revised. Thus you will note that there are quite a few changes for the 2009 tax year compared to the year before. To summarize, here are some of the more notable tax rate changes for 2009 and even a quick blurb about some of the key tax benefits that did not change based on official IRS releases thus far:

  • Tax-bracket thresholds: Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $67,900, up from $65,100 in 2008.
  • Personal and dependency exemption: The value of each personal and dependency exemption, available to most taxpayers, is $3,650 (up $150 from 2008).
  • Standard deduction: The new standard deduction is $11,400 for married couples filing a joint return (up $500), $5,700 for singles and married individuals filing separately (up $250) and $8,350 for heads of household (up $350). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
  • Earned income tax credit: The maximum earned income tax credit for low and moderate income workers and working families with two or more children is $5,028, up from $4,824 (up $204). The income limit for the credit for joint return filers with two or more children is $43,415, up from $41,646 (up $1,769).
  • Gift exclusion: The annual gift exclusion rises to $13,000, up from $12,000 in 2008 (up $1,000).
  • Social Security Contribution and Wage Benefit Base: Increased to $106,800 from $102,000 (up $4,800). Income over $106,800 will not be subject to Social Security taxation, and at the current Social Security tax rate of 6.20%, the maximum Social Security taxes for 2009 is $6,621.60.
  • Traditional and Roth IRA Contribution Limits: No change from 2008. The Traditional IRA and Roth IRA contribution limits will be staying the same at $5,000 per year for those under age 50, and $6,000 per year for those 50 or above.

Although the information in this article helps summarize the changes in Federal Income Tax, you should consult the official IRS.gov web site and a professional tax advisor as needed.