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Federal Income Tax Rates for the Year 2014

Personal tax rates and tax brackets for 2014

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The following tax rates apply to ordinary income. That is, these tax rates apply to most types of income. There are special tax rates that apply to specific types of income such as long-term capital gains and qualified dividends.

Each tax rate applies to a specific range of taxable income, which is called a tax bracket. Taxable income is total worldwide income after various deductions have been subtracted.

Note: These tax rate schedules are provided for tax planning purposes. To compute your actual income tax, please consult tax calculation worksheets in the 2014 Instructions for Form 1040 and the 2014 Tax Tables.

Single Filing Status

[Tax Rate Schedule X, Internal Revenue Code section 1(c)]

  • 10% on taxable income from $0 to $9,075, plus
  • 15% on taxable income over $9,075 to $36,900, plus
  • 25% on taxable income over $36,900 to $89,350, plus
  • 28% on taxable income over $89,350 to $186,350, plus
  • 33% on taxable income over $186,350 to $405,100, plus
  • 35% on taxable income over $405,100 to $406,750, plus
  • 39.6% on taxable income over $406,750.

Married Filing Jointly or Qualifying Widow(er) Filing Status

[Tax Rate Schedule Y-1, Internal Revenue Code section 1(a)]

  • 10% on taxable income from $0 to $18,150, plus
  • 15% on taxable income over $18,150 to $73,800, plus
  • 25% on taxable income over $73,800 to $148,850, plus
  • 28% on taxable income over $148,850 to $226,850, plus
  • 33% on taxable income over $226,850 to $405,100, plus
  • 35% on taxable income over $405,100 to $457,600, plus
  • 39.6% on taxable income over $457,600.

Married Filing Separately Filing Status

[Tax Rate Schedule Y-2, Internal Revenue Code section 1(d)]

  • 10% on taxable income from $0 to $9,075, plus
  • 15% on taxable income over $9,075 to $36,900, plus
  • 25% on taxable income over $36,900 to $74,425, plus
  • 28% on taxable income over $74,425 to $113,425, plus
  • 33% on taxable income over $113,425 to $202,550, plus
  • 35% on taxable income over $202,550 to $228,800, plus
  • 39.6% on taxable income over $228,800.

Head of Household Filing Status

[Tax Rate Schedule Z, Internal Revenue Code section 1(b)]

  • 10% on taxable income from $0 to $12,950, plus
  • 15% on taxable income over $12,950 to $49,400, plus
  • 25% on taxable income over $49,400 to $127,550, plus
  • 28% on taxable income over $127,550 to $206,600, plus
  • 33% on taxable income over $206,600 to $405,100, plus
  • 35% on taxable income over $405,100 to $432,200, plus
  • 39.6% on taxable income over $432,200.

Other Tax Rates in Effect for 2014

In addition to the federal income taxes on ordinary income, there are other taxes that may apply to personal income:

Social Security Tax at a rate of 12.4% on wages and self-employment income up to the annual Social Security wage base of $117,000.

Medicare Tax at a rate of 2.9% on wages and self-employment income.

Additional Medicare Tax at a rate of 0.9% on wages and self-employment income over the following thresholds:

  • Married Filing Jointly: $250,000
  • Single or Head of Household or Qualifying Widow(er): $200,000
  • Married Filing Separately: $125,000

Alternative Minimum Tax (AMT)

For Married Filing Separately:

  • 26% on taxable income (as recalculated under the AMT rules) under $91,250
  • 28% on AMT taxable income over $91,250

For Single, Head of Household, Married Filing Jointly, and Qualifying Widow(er):

  • 26% on AMT taxable income under $182,500
  • 28% on AMT taxable income over $182,500

Net investment income tax at a rate of 3.8% on the lower of net investment income or modified adjusted gross income over the following thresholds:

  • Married Filing Jointly or Qualifying Widow(er): $250,000
  • Single or Head of Household: $200,000
  • Married Filing Separately: $125,000
Capital Gains tax rates vary depending on whether the gains are short-term or long-term.

Short-term gains taxed at ordinary income tax rates.

Long-term gains and qualified dividends taxed at

  • 0% if taxable income falls in the 10% or 15% marginal tax brackets
  • 15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets
  • 20% if taxable income falls in the 39.6% marginal tax bracket
  • 25% on Depreciation Recapture
  • 28% on Collectibles
  • 28% on qualified small business stock after exclusion

 

How to Utilize your Marginal Tax Rates

Individuals can use the tax rate schedules in a number of ways to help plan their finances. You can use these tax rates to figure out how much tax you will pay on extra income you earn. For a taxpayer in the 25% tax bracket, extra income will be taxed at that rate until the taxpayer's income reaches the next tax bracket of 28%.

Remember that different intervals of income are taxed at different rates, and the income intervals at which the rates apply are based on a person's filing status. For example, a person who files as Head of Household earning $48,600 per year would have the first $12,950 of their taxable income taxed at the 10% rate, and their taxable income between $12,950 and $48,600 taxed at the 15% rate. A Head of Household filer earning $200,000 a year would fall within the 28% tax bracket, although some of their income is taxed at the 10%, 15%, and 25% rates.

Alternatively, you can use these tax rates to figure out how much tax you will save by increasing your deductions. A taxpayer in the 28% tax bracket, for example, will save 28 cents in federal tax for every dollar spent on a tax-deductible expense, such as mortgage interest or charity.

Be aware that marginal tax rates interact with other tax rates, especially the alternative minimum tax, which can push income into a higher tax rate or eliminate the tax savings of certain types of deductions.

Source: the official tax brackets for 2014 were published by the Internal Revenue Service in Revenue Procedure 2013-35 (pdf).

 

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