The federal income tax brackets are a fickle thing. Between political meddling and inflation, something changes almost every year. Of course, knowing about these tax changes in advance, makes it easier for you to plan your taxes and hopefully save money.
There are two things that can happen to the tax brackets every year: the tax rates may change and the tax brackets canbe adjusted for inflation.
When the tax rates change, you can blame Congress formessingwith the tax laws (unless it’s in your favor).
Otherwise, the federal tax brackets are indexed to inflation. This prevents inflation creep from pushing you into a higher tax bracket. The IRS looks at the CPI data (Consumer Price Index) over a twelve month period. If inflation is high enough, the IRS will make adjustments to the income limits for each bracket.
Each October, the IRS announces the inflation adjustments to the federal income tax brackets for next year, along with many other tax credits and deductions. This gives you a two month head start to plan for next year.
You can plan ahead on your own with tax tools, a spreadsheet, or a good accountant. I use TurboTax to simplify the process. Alittle extra planning helps lower your taxable income before youfile your taxes each year.
Before we get to the tax tables, here’s one last reminder. Don’t be too concerned if your income rose this year and you find yourself in a higher bracket. Based on how the tax brackets work, your tax bill might go up but so does your after tax income.
| Choose the Tax Year |
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 |
2017 Federal Income Tax Brackets
These tax tables are for the 2016 tax year, with taxes due in April 2017.
Single Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $9,325 | 10% | 10% of the amount over $0 |
| $9,325 – $37,950 | 15% | $932.50 plus 15% of the excess over $9,325 |
| $37,950 – $91,900 | 25% | $5,226.25 plus 25% of the excess over $37,950 |
| $91,900 – $190,650 | 28% | $18,713.75 plus 28% of the excess over $91,900 |
| $190,650 – $416,700 | 33% | $46,643.75 plus 33% of the excess over $191,650 |
| $416,700 – $418,400 | 35% | $120,910.25 plus 35% of the excess over $416,700 |
| Over $418,400 | 39.6% | $121,505.25 plus 39.6% of the excess over $418,400 |
Married, Filing Jointly Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $18,650 | 10% | 10% of the amount over $0 |
| $18,650– $75,900 | 15% | $1,855 plus 15% of the amount over$18,550 |
| $75,900 – $153,100 | 25% | $10,368 plus 25% of the amount over $75,300 |
| $153,100 – $233,350 | 28% | $29,518 plus 28% of the amount over $151,900 |
| $233,350 – $416,700 | 33% | $51,792 plus 33% of the amount over $231,450 |
| $416,700 – $470,700 | 35% | $111,819 plus 35% of the amount over $413,350 |
| Over $470,700 | 39.6% | $130,579 plus 39.6% of the amount over $466,950 |
Head of Household Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $13,350 | 10% | 10% of the amount over $0 |
| $13,350 – $50,800 | 15% | $1,335 plus 15% of the excess over $13,350 |
| $50,800 – $131,200 | 25% | $6,952.50 plus 25% of the excess over $50,800 |
| $131,200 – $212,500 | 28% | $27,052.50 plus 28% of the excess over $131,200 |
| $212,500 – $416,700 | 33% | $49,816.50 plus 33% of the excess over $212,500 |
| $416,700 – $444,500 | 35% | $117,202.50 plus 35% of the excess over $416,701 |
| Over $444,500 | 39.6% | $126,950 plus 39.6% of the excess over $444,550 |
Married, Filing Separately Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $9,325 | 10% | 10% of the amount over $0 |
| $9,325 – $37,950 | 15% | $932.50 plus 15% of the amount over $9,325 |
| $37,950 – $76,550 | 25% | $5,226.25 plus 25% of the amount over $37,950 |
| $76,550 – $116,675 | 28% | $14,876.25 plus 28% of the amount over $76,550 |
| $116,675 – $208,350 | 33% | $26,111.25 plus 33% of the amount over $116,675 |
| $208,350 – $235,350 | 35% | $56,364 plus 35% of the amount over $208,350 |
| Over $235,350 | 39.6% | $65,814 plus 39.6% of the amount over $235,350 |
2016 Standard Deduction
The 2016 standard deductions are based off the 2013 numbers and adjusted for inflation.
| Filing Status | Standard Deduction |
| Single | $6,350 |
| Married, Filing Jointly | $12,700 |
| Head of Household | $9,350 |
| Married, FilingSeparately | $6,350 |
Other 2016 Tax Changes
Several other tax changes are made due to the inflation adjustment. Some of the important changes are highlighted below with links to the respective pages:
- 401k limits
- IRA limits– both deduction and income limits
- Limits on other retirement plans
- Saver’s Credit
- Dividend and capital gains taxesare tied to your tax brackets
Alternative Minimum Tax
The Alternative Minimum Tax (AMT) exemption isfinally tied to the inflation index. The 2016 AMT exemption for single filers is $53,900, for those married filing jointly is $83,800, and for married filing separately is $41,900.
Student Loan Interest Deduction
The student loan interest deduction allows you to deduct up to $2,500 in paid interest every year. This deduction has a phase-out period based on your modified adjustable gross income. The phase-out will begin for single filers at $65,000 and for married filing jointly at $130,000. The phase-out will end for single filers at $80,000 and for married filing jointly at $160,000.
Estate Taxes
Estate taxes were also tied to the inflation index last year. For 2015, the estate tax exclusion will be $5,430,000. Any amount over that will be taxed at 40%. If your net worth is hovering near this amount, I recommend talking with an estate tax attorney. They can help you build a solid estate plan that makes sure most of your estate goes where you want it to go and not to the government.
Previous Year Federal Tax Brackets
2016 Federal Income Tax Brackets
These tax tables are for the 2016 tax year, with taxes due in April 2017.
Single Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $9,275 | 10% | 10% of the amount over $0 |
| $9,275 – $37,650 | 15% | $928 plus 15% of the amount over $9,275 |
| $37,650 – $91,150 | 25% | $5,184 plus 25% of the amount over $37,650 |
| $91,150 – $190,150 | 28% | $18,558 plus 28% of the amount over $91,150 |
| $190,150 – $413,350 | 33% | $46,279 plus 33% of the amount over $190,150 |
| $413,350– $415,050 | 35% | $119,935 plus 35% of the amount over $413,350 |
| Over $415,050 | 39.6% | $120,530 plus 39.6% of the amount over $415,050 |
Married, Filing Jointly Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $18,550 | 10% | 10% of the amount over $0 |
| $18,550– $75,300 | 15% | $1,855 plus 15% of the amount over$18,550 |
| $75,300 – $151,900 | 25% | $10,368 plus 25% of the amount over $75,300 |
| $151,900 – $231,450 | 28% | $29,518 plus 28% of the amount over $151,900 |
| $231,450 – $413,350 | 33% | $51,792 plus 33% of the amount over $231,450 |
| $413,350 – $466,950 | 35% | $111,819 plus 35% of the amount over $413,350 |
| Over $466,950 | 39.6% | $130,579 plus 39.6% of the amount over $466,950 |
Head of Household Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $13,250 | 10% | 10% of the amount over $0 |
| $13,250 – $50,400 | 15% | $1,325 plus 15% of the amount over $13,250 |
| $50,400 – $130,150 | 25% | $6,898 plus 25% of the amount over $50,400 |
| $130,150 – $210,800 | 28% | $26,835 plus 28% of the amount over $130,150 |
| $210,800 – $413,350 | 33% | $49,417 plus 33% of the amount over $210,800 |
| $413,350 – $441,000 | 35% | $116,259 plus 35% of the amount over $413,350 |
| Over $441,000 | 39.6% | $125,936 plus 39.6% of the amount over $441,000 |
Married, Filing Separately Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $9,275 | 10% | 10% of the amount over $0 |
| $9,275 – $37,650 | 15% | $928 plus 15% of the amount over $9,275 |
| $37,650 – $75,950 | 25% | $5,184 plus 25% of the amount over $37,650 |
| $75,950 – $115,725 | 28% | $14,759 plus 28% of the amount over $75,950 |
| $115,725 – $206,675 | 33% | $25,896 plus 33% of the amount over $115,725 |
| $206,675 – $233,475 | 35% | $55,909 plus 35% of the amount over $206,675 |
| Over $233,475 | 39.6% | $65,289 plus 39.6% of the amount over $233,475 |
2015 Tax Brackets
These tax tables are for the 2015 tax year, with taxes due in April 2016.
Single Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $9,225 | 10% | 10% of the amount over $0 |
| $9,225 – $37,450 | 15% | $923 plus 15% of the amount over $9,225 |
| $37,450 – $90,750 | 25% | $5,156 plus 25% of the amount over $37,450 |
| $90,750 – $189,300 | 28% | $18,481 plus 28% of the amount over $90,750 |
| $189,300 – $411,500 | 33% | $46,075 plus 33% of the amount over $189,300 |
| $411,500– $413,200 | 35% | $119,401 plus 35% of the amount over $411,500 |
| Over $413,200 | 39.6% | $119,996 plus 39.6% of the amount over $413,200 |
Married, Filing Jointly Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $18,450 | 10% | 10% of the amount over $0 |
| $18,450– $74,900 | 15% | $1,845 plus 15% of the amount over$18,450 |
| $74,900 – $151,200 | 25% | $10,313 plus 25% of the amount over $74,900 |
| $151,200 – $230,450 | 28% | $29,388 plus 28% of the amount over $151,200 |
| $230,450 – $411,500 | 33% | $51,578 plus 33% of the amount over $230,450 |
| $411,500 – $464,850 | 35% | $111,324 plus 35% of the amount over $411,500 |
| Over $464,850 | 39.6% | $129,997 plus 39.6% of the amount over $464,850 |
Head of Household Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $13,150 | 10% | 10% of the amount over $0 |
| $13,150 – $50,200 | 15% | $1,315 plus 15% of the amount over $13,150 |
| $50,200 – $129,600 | 25% | $6,873 plus 25% of the amount over $50,200 |
| $129,600 – $209,850 | 28% | $26,723 plus 28% of the amount over $129,600 |
| $209,850 – $411,500 | 33% | $49,193 plus 33% of the amount over $209,850 |
| $411,500 – $439,000 | 35% | $115,737 plus 35% of the amount over $411,500 |
| Over $439,000 | 39.6% | $125,362 plus 39.6% of the amount over $439,000 |
Married, Filing Separately Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $9,225 | 10% | 10% of the amount over $0 |
| $9,225 – $37,450 | 15% | $923 plus 15% of the amount over $9,225 |
| $37,450 – $75,600 | 25% | $5,156 plus 25% of the amount over $37,450 |
| $75,600 – $115,225 | 28% | $14,694 plus 28% of the amount over $75,600 |
| $115,225 – $205,750 | 33% | $25,789 plus 33% of the amount over $115,225 |
| $205,750 – $232,425 | 35% | $55,662 plus 35% of the amount over $205,750 |
| Over $232,425 | 39.6% | $64,989 plus 39.6% of the amount over $232,425 |
2014 Tax Brackets
These tables are for the 2014 tax year, with taxes due April 2015.
Single Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $9,075 | 10% | 10% of the amount over $0 |
| $9,075 – $36,900 | 15% | $908 plus 15% of the amount over $9,075 |
| $36,900 – $89,350 | 25% | $5,081 plus 25% of the amount over $36,900 |
| $89,350 – $186,350 | 28% | $18,194 plus 28% of the amount over $89,350 |
| $186,350 – $405,100 | 33% | $45,354 plus 33% of the amount over $186,350 |
| $405,100– $406,750 | 35% | $117,541 plus 35% of the amount over $405,100 |
| Over $406,750 | 39.6% | $118,189 plus 39.6% of the amount over $406,750 |
Married, Filing Jointly Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $18,150 | 10% | 10% of the amount over $0 |
| $18,150– $73,800 | 15% | $1,815 plus 15% of the amount over$18,150 |
| $73,800 – $148,850 | 25% | $10,163 plus 25% of the amount over $73,800 |
| $148,850 – $226,850 | 28% | $28,925 plus 28% of the amount over $148,850 |
| $226,850 – $405,100 | 33% | $50,765 plus 33% of the amount over $226,850 |
| $405,100 – $457,600 | 35% | $109,588 plus 35% of the amount over $405,100 |
| Over $457,600 | 39.6% | $127,963 plus 39.6% of the amount over $457,600 |
Head of Household Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $12,950 | 10% | 10% of the amount over $0 |
| $12,950 – $49,400 | 15% | $1,295 plus 15% of the amount over $12,950 |
| $49,400 – $127,550 | 25% | $6,763 plus 25% of the amount over $49,400 |
| $127,550 – $206,600 | 28% | $26,300 plus 28% of the amount over $127,550 |
| $206,600 – $405,100 | 33% | $48,434 plus 33% of the amount over $206,600 |
| $405,100 – $432,200 | 35% | $113,939 plus 35% of the amount over $405,100 |
| Over $432,200 | 39.6% | $123,424 plus 39.6% of the amount over $432,200 |
Married, Filing Separately Tax Brackets
| Taxable Income | Tax Rate | The Tax Is: |
| $0 – $9,075 | 10% | 10% of the amount over $0 |
| $9,075 – $36,900 | 15% | $908 plus 15% of the amount over $9,075 |
| $36,900 – $74,425 | 25% | $5,081 plus 25% of the amount over $36,900 |
| $74,425 – $113,425 | 28% | $14,463 plus 28% of the amount over $74,425 |
| $113,425 – $202,550 | 33% | $25,383 plus 33% of the amount over $113,425 |
| $202,550 – $228,800 | 35% | $54,794 plus 35% of the amount over $202,550 |
| Over $228,800 | 39.6% | $63,981 plus 39.6% of the amount over $228,800 |
2013 Tax Brackets
These tax tables are for the 2013 tax year, with taxes due in April 2014.
| Tax Rate | Single | Married, Filing Jointly | Married, Filing Separately | Head of Household |
| 10% | $0 – $8,925 | $0 – $17,850 | $0 – $8,925 | $0 – $12,750 |
| 15% | $8,925 – $36,250 | $17,850 – $72,500 | $8,925 – $36,250 | $12,750 – $48,600 |
| 25% | $36,250 – $87,850 | $72,500 – $146,400 | $36,250 – $73,200 | $48,600 – $125,450 |
| 28% | $87,850 – $183,250 | $146,400 – $223,050 | $73,200 – $111,525 | $125,450 – $203,150 |
| 33% | $183,250 – $398,350 | $223,050 – $398,350 | $111,525 – $199,175 | $203,150 – $398,350 |
| 35% | $398,350 – $400,000 | $398,350 – $450,000 | $199,175 – $225,000 | $398,350 – $425,000 |
| 39.6% | Over $400,000 | Over $450,000 | Over $225,000 | Over $425,000 |
2012 Tax Brackets
These tax tables are for the 2012tax year, with taxes due in April 2013.
| Tax Rate | Single | Married, Filing Jointly | Married, Filing Separately | Head of Household |
| 10% | $0 – $8,700 | $0 – $17,400 | $0 – $8,700 | $0 – $12,400 |
| 15% | $8,700 – $35,350 | $17,400 – $70,700 | $8,700 – $35,350 | $12,400 – $47,350 |
| 25% | $35,350 – $85,650 | $70,700 – $142,700 | $35,350 – $71,350 | $47,350 – $122,300 |
| 28% | $85,650 – $178,650 | $142,700 – 217,450 | $71,350 – $108,725 | $122,300 – $198,050 |
| 33% | $178,650 – $388,350 | $217,450 – $388,350 | $108,725 – $194,175 | $198,050 – $388,350 |
| 35% | Over $388,350 | Over $388,350 | Over $194,175 | Over $388,350 |
FAQs
Short-term capital gains taxes range from 0% to 37%. Long-term capital gains taxes run from 0% to 20%. High income earners may be subject to an additional 3.8% tax called the net investment income tax on both short-and-long term capital gains.
Where can I get IRS tax booklets? ›
These forms and publications are available on the Internet, on CD-ROM, through fax on demand, over the telephone, through the mail, at local IRS offices, at some banks, post offices, and libraries, and even at some grocery stores, copy centers and office supply stores.
What is the standard deduction for 2017 for over 65? ›
An additional standard deduction of $1,250 is allowed for a married individual (filing jointly or separately) or qualifying widow(er) who is 65 or older or blind, $2,500 if 65 or older and blind.
When did the US have a 90% tax rate? ›
For tax years 1944 through 1951, the highest marginal tax rate for individuals was 91%, increasing to 92% for 1952 and 1953, and reverting to 91% 1954 through 1963. For the 1964 tax year, the top marginal tax rate for individuals was lowered to 77%, and then to 70% for tax years 1965 through 1981.
At what age is social security no longer taxed? ›
There is no age at which you will no longer be taxed on Social Security payments. So, if those payments when combined with your other forms of income, exceed one of the two thresholds, then you will have to pay at least federal taxes on either 50% or 85% of the benefits you receive.
What is the IRS tax rate for investment income? ›
Long-term capital gains are taxed at 0%, 15%, or 20%. Some exceptions: High-earning individuals may also need to account for the net investment income tax (NIIT), an additional 3.8% tax that can be triggered if your income exceeds a certain limit.
What were the IRS brackets in 2017? ›
Taxpayers for 2017 fall into one of seven brackets, depending on their taxable income: 10%, 15%, 25%, 28%, 33%, 35% or 39.6%. Because the U.S. tax system is a progressive one, as income rises, increasingly higher taxes are imposed. But those in the highest bracket don't pay the highest rate on all their income.
Do seniors over 65 get an extra tax deduction? ›
If you're married, filing jointly or separately, the extra standard deduction amount was $1,500 per qualifying individual. If you are 65 or older and blind, the extra standard deduction for 2024 is $3,900 if you are single or filing as head of household.
What is the standard deduction for 2012? ›
For 2012, the standard deductions are $11,900 for married couples filing jointly, $5,950 for married couples filing separately and singles, and $8,700 for heads of household.
Do the rich pay more taxes than the middle class? ›
In sum, Treasury and CBO data show that federal tax rates at the bottom average about 0 percent or less, tax rates in the middle average less than 15 percent, and rates at the top average around 30 percent. Average tax rates at the top are twice the tax rates in the middle.
The top individual marginal income tax rate tended to increase over time through the early 1960s, with some additional bumps during war years. The top income tax rate reached above 90% from 1944 through 1963, peaking in 1944, when top taxpayers paid an income tax rate of 94% on their taxable income.
When did the rich pay the most taxes? ›
A Brief History of the Top Tax Rate
The top individual rate reached a high of 94 percent in 1944-45, and the top corporate rate reached a high of 53 percent in 1968-69. [4] However, the top rate has not always applied to every type of income.
How much tax do I pay on investment income? ›
Capital gains
They're usually taxed at ordinary income tax rates (10%, 12%, 22%, 24%, 32%, 35%, or 37%). Long-term capital gains are profits from selling assets you own for more than a year. They're usually taxed at lower long-term capital gains tax rates (0%, 15%, or 20%).
Do you have to pay taxes on investor money? ›
In many cases, you won't owe taxes on earnings until you take the money out of the account—or, depending on the type of account, ever. But for general investing accounts, taxes are due at the time you earn the money. The tax rate you pay on your investment income depends on how you earn the money.
Who pays the 3.8 investment tax? ›
As an investor, you may owe an additional 3.8% tax called net investment income tax (NIIT). But you'll only owe it if you have investment income and your modified adjusted gross income (MAGI) goes over a certain amount.
How do investors avoid taxes? ›
Invest in Municipal Bonds
Assuming you hold the bond until maturity, you don't have to pay federal income tax on the interest—or state and local taxes either, if you live in the locality where the bond was issued. Tax-free interest payments make municipal bonds attractive to investors.
The federal income tax brackets are a fickle thing. Between political meddling and inflation, something changes almost every year. Of course, knowing about these tax changes in advance, makes it easier for you to plan your taxes and hopefully save money.