Though for many people, the 2008 tax season just started, it’s never too early to plan ahead for what will happen next year. Part of the planning is to know your tax rate for 2009, so you can adjust your tax strategies for the new year accordingly.
At the end of 2008, the IRS published its 2009 marginal tax brackets. Comparing to 2008 tax brackets, we saw increases in all taxable income ranges, thanks to the inflation, because the federal taxable income levels are inflation adjusted each year, as shown in the following tables. Remember that these are marginal tax rates, which means, based on your income level, you pay a basis tax plus tax for income exceeding the floor of your income range. For example, if you earn $80,000 taxable income (married couple filing jointly) in 2009, your federal tax will equal to
Federal income tax = $9,350 + 25% * ($80,000 – $67,900) = $12,375
Also, the income is taxable income, which is your gross income minus deductions, exemptions and all other applicable adjustments.
Married Individuals Filing Joint Returns and Surviving Spouses
| Taxable Income | 2009 Tax Rate |
| Not over $16,700 | 10% of the taxable income |
| Over $16,700 but not over $67,900 | $1,670 plus 15% of the excess over $16,700 |
| Over $67,900 but not over $137,050 | $9,350 plus 25% of the excess over $67,900 |
| Over $137,050 but not over $208,850 | $26,637.50 plus 28% of the excess over $137,050 |
| Over $208,850 but not over $372,950 | $46,741.50 plus 33% of the excess over $208,850 |
| Over $372,950 | $100,894.50 plus 35% of the excess over $372,950 |
Heads of Households
| Taxable Income | 2009 Tax Rate |
| Not over $11,950 | 10% of the taxable income |
| Over $11,950 but not over $45,500 | $1,195 plus 15% of the excess over $11,950 |
| Over $45,500 but not over $117,450 | $6,227.50 plus 25% of the excess over $45,500 |
| Over $117,450 but not over $190,200 | $24,215 plus 28% of the excess over $117,450 |
| Over $190,200 but not over $372,950 | $44,585 plus 33% of the excess over $190,200 |
| Over $372,950 | $104,892.50 plus 35% of the excess over $372,950 |
Unmarried Individuals
| Taxable Income | 2009 Tax Rate |
| Not over $8,350 | 10% of the taxable income |
| Over $8,350 but not over $33,950 | $835 plus 15% of the excess over $8,350 |
| Over $33,950 but not over $82,250 | $4,675 plus 25% of the excess over $33,950 |
| Over $82,250 but not over $171,550 | $16,750 plus 28% of the excess over $82,250 |
| Over $171,550 but not over $372,950 | $41,754 plus 33% of the excess over $171,550 |
| Over $372,950 | $108,216 plus 35% of the excess over $372,950 |
Married Individuals Filing Separate Returns
| Taxable Income | 2009 Tax Rate |
| Not over $8,350 | 10% of the taxable income |
| Over $8,350 but not over $33,950 | $835 plus 15% of the excess over $8,350 |
| Over $33,950 but not over $68,525 | $4,675 plus 25% of the excess over $33,950 |
| Over $68,525 but not over $104,425 | $13,318.75 plus 28% of the excess over $68,525 |
| Over $104,425 but not over $186,475 | $23,379.75 plus 33% of the excess over $104,425 |
| Over $186,475 | $50,447.25 plus 35% of the excess over $186,475 |
In addition, the IRS also adjusted standard deduction for 2009 tax year. Depending on the filing status, the 2009 standard deductions are as follows:
| Filing Status | 2009 Standard Deduction |
| Married Individuals Filing Joint Returns and Surviving Spouses | $11,400 |
| Heads of Households | $8,350 |
| Unmarried Individuals | $5,700 |
| Married Individuals Filing Separate Returns | $5,700 |
Comparing to 2008, the standard deductions also increased across the board. For instance, for married couple filing joint returns, the standard deduction increased by $500 from $10,900 for 2008 to $11,400 for 2009.
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[…] 7.2009 Federal Income Tax Brackets At the end of 2008, the IRS published its 2009 marginal tax brackets. Comparing to 2008 tax brackets, we saw increases in all taxable income ranges, thanks to the inflation, because the federal taxable income levels are inflation adjusted each year, as shown in the following tables. http://www.personalfinancereviews.com/2009-federal-income-tax-brackets/ […]