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2010 and 2011 tax rates, income brackets

January 23, 2011

When we file our taxes, we want the bottom line: Just what do we owe?

That amount depends upon into which tax bracket our taxable income falls.

Thanks to the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 that became law on Dec. 17, 2010, the six federal income tax rates that apply to our 2010 taxes are in place for 2011 (and 2012, too).

The tables below show which of the tax rates apply to what chunks of our money for the 2010 and 2011 tax years. The IRS will update the 2012 income tax bracket ranges for inflation later this year.

2010 Income Tax Rates, Tax Brackets
Tax
Rate
Single       
Head of
Household 
Married
Filing Jointly
or Surviving Spouse         
Married
Filing Separately
10%

up to $8,375 up to $11,950 up to
$16,750
up to $8,375
15%

$8,376 to $34,000 $11,951 to $45,550 $16,751 to $68,000 $8,376 to $34,000
25%

$34,001 to $82,400 $45,551 to $117,650 $68,001 to $137,300 $34,001 to $68,650
28%

$82,401 to $171,850 $117,651 to $190,550 $137,301 to $209,250 $68,651 to $104,625
33%

$171,851    to $373,650 $190,551    to $373,650 $209, 251
to $373,650
$104,626 
to $186,825
35%

$373, 651 or more $373, 651 or more $373,651
or more
$186,826
or more

Note that the income ranges for married couples who file a joint return are double that of a single taxpayer in both the 10 percent and 15 percent tax brackets. This helps ease somewhat a possible marriage tax penalty.

That duplication of the two lower tax rate/tax bracket amounts to lessen the marriage tax continues this tax year.

And speaking of 2011, for your tax planning purposes — yes, some obsessive, annoying, crazy, Type A, smug incredibly tax-savvy people are already planning their 2011 tax strategies — here's a look at this year's tax rates and brackets table.

2011 Income Tax Rates, Tax Brackets
Tax
Rate
Single       
Head of
Household 
Married
Filing Jointly
or Surviving Spouse         
Married
Filing Separately
10%

up to $8,500

up to $12,150 up to
$17,000
up to $8,500
15%

$8,501 to $34,500 $12,151 to $46,250 $17,001 to $69,000 $8,501 to $34,500
25% $34,501 to $83,600 $46,251 to $119,400 $69,001 to $139,350 $34,501 to $69,675
28%

$83,601 to $174,400 $119,401 to $193,350 $139,351 to $212,300 $69,676 to $106,150
33% $174,401    to $379,150 $193,351    to $379,150

$212,301 to $379, 150

$105,151 to $189, 575

35%

$379,151 or more $379,151 or more $379,151
or more
$189,576
or more

Marginal vs. effective taxes: Tax tables are always interesting to look at, but keep in mind that just because your income falls into a certain tax bracket, that not the percentage of your earnings that you'll pay Uncle Sam.

Our tax system is progressive. The amount of income taxes you pay increases as your income increases, but it does so in steps.

So even if a single taxpayer makes $50,000 in 2011, she's not going to owe $12,500, or 25 percent of her income since it's in the 25 percent income tax bracket, to the IRS.

The first $8,500 a single taxpayer earns is taxed at 10 percent, with the next $26,000 at 15 percent and then the final $15,500 of her income taxed at her top rate of 25 percent.

That makes her tax bill $8,625 instead of $12,500. Here's the down-and-dirty math:

$8,500 x 10 percent = $850
$26,000 x 15 percent = $3,900
$15,500 x 25 percent = $3,875

And $850 + $3,900 + $3,875 = $8,625

So her real, effective or average (pick your term) tax rate on the $50,000 is 17.25 percent even though her marginal tax rate, which is the rate applied to the last dollar of income she earned, is 25 percent.

And remember that my very simple, for-illustration-purposes-only example uses a hypothetical taxpayer's gross earnings, not her final taxable income amount.

Adjustments, deductions and exemptions are going to reduce that $50,000 to a lower taxable income level.

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It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • In last year’s State of the Union, Obama declared job creation his “No. 1 focus,” then spent much of 2010 on other priorities like overhauling healthcare and Wall Street rules.
    With the elevated unemployment rate still ranking as Americans’ top concern, there is little doubt jobs will again be the centerpiece of Obama’s speech.
    But more than ever before, Obama is also expected to use the annual address to cast himself as more of a fiscal hawk, possibly a tough sell for a leader presiding over trillion-dollar-plus annual budget deficits.

  • Richard Solis

    Thanks a whole bunch for the info. It does help clear some stuff up.

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