Federal Income Tax Brackets

Tax Rates for the Years 2015 and 2014 by Filing Status

Chart showing the seven tax brackets in effect for 2015.
© William Perez EA

The United States imposes tax on income using progressive rates. That means that a person's tax liabilities gradually increases as income increases. There are currently seven tax brackets, ranging from ten percent to 39.6 percent.

Tax Rates are displayed by year and filing status. First are tax rates for 2015 by filing status. Next comes tax rates for 2014 by filing status.

Single
2015 Tax Brackets
If your taxable income is over
but not over
Marginal tax rate on ordinary income:Marginal rate on long-term capital gains:
$ 0$ 9,22510%0%
9,22537,45015%0%
37,45090,75025%15%
90,750189,30028%15%
189,300411,50033%15%
411,500413,20035%15%
413,200--39.60%20%
    
Head of Household
2015 Tax Brackets
If your taxable income is over
but not over
Marginal tax rate on ordinary income:Marginal rate on long-term capital gains:
$ 0$ 13,15010%0%
13,15050,20015%0%
50,200129,60025%15%
129,600209,85028%15%
209,850411,50033%15%
411,500439,00035%15%
439,000--39.60%20%
    
Married Filing Separately
2015 Tax Brackets
If your taxable income is over
but not over
Marginal tax rate on ordinary income:Marginal rate on long-term capital gains:
09,22510%0%
9,22537,45015%0%
37,45075,60025%15%
75,600115,22528%15%
115,225205,75033%15%
205,750232,42535%15%
232,425--39.60%20%
    
Married Filing Jointly / Qualifying Widow or Widower
2015 Tax Brackets
If your taxable income is over
but not over
Marginal tax rate on ordinary income:Marginal rate on long-term capital gains:
018,45010%0%
18,45074,90015%0%
74,900151,20025%15%
151,200230,45028%15%
230,450411,50033%15%
411,500464,85035%15%
464,850--39.60%20%
    
Single
2014 Tax Brackets
If your taxable income is over
but not over
Marginal tax rate on ordinary income:Marginal rate on long-term capital gains:
09,07510%0%
9,07536,90015%0%
36,90089,35025%15%
89,350186,35028%15%
186,350405,10033%15%
405,100406,75035%15%
406,750--39.60%20%
    
Head of Household
2014 Tax Brackets
If your taxable income is over
but not over
Marginal tax rate on ordinary income:Marginal rate on long-term capital gains:
012,95010%0%
12,95049,40015%0%
49,400127,55025%15%
127,550206,60028%15%
206,600405,10033%15%
405,100432,20035%15%
432,200--39.60%20%
    
Married Filing Separately
2014 Tax Brackets
If your taxable income is over
but not over
Marginal tax rate on ordinary income:Marginal rate on long-term capital gains:
09,07510%0%
9,07536,90015%0%
36,90074,42525%15%
74,425113,42528%15%
113,425202,55033%15%
202,550228,80035%15%
228,800--39.60%20%
    
Married Filing Jointly / Qualifying Widow or Widower
2014 Tax Brackets
If your taxable income is over
but not over
Marginal tax rate on ordinary income:Marginal rate on long-term capital gains:
018,15010%0%
18,15073,80015%0%
73,800148,85025%15%
148,850226,85028%15%
226,850405,10033%15%
405,100457,60035%15%
457,600--39.60%20%

 

Terminology

We speak of marginal tax brackets to refer to the tax imposed on the next dollar earned. This is a useful concept for tax planning, as it enables people to analyze the tax impact of additional income or additional deductions. The marginal tax bracket is the highest tax rate imposed on your income.

Ordinary income tax rates apply to most kinds of income. Ordinary rates are distinguished from the capital gains tax rate imposed on long-term gains and qualified dividends.

The Marginal Tax Brackets

There are seven marginal tax brackets:

  • 10%
  • 15%
  • 25%
  • 28%
  • 33%
  • 35%
  • 39.6%

These rates are imposed by Congress and found in section 1 of the Internal Revenue Code. The income to which these rates apply adjusts every year. The IRS updates the official tax rates to take into account inflation.

The Hidden Zero Percent Tax Bracket

Everyone is entitled to a standard deduction or itemized deductions and one or more personal exemptions.

Together these constitute a zero percent tax bracket, in the sense that there's no tax imposed the income represented by these deductible expenses.

Progressive Structure of the Tax Rates

The ordinary income tax rates are called progressive because the tax rate that applies progressively increases as a person's income increases.

A person with $1 million in income, just to take an example, would have their income taxed at all the tax brackets. Progressive tax rates are distinguished from a flat tax (in which there's one tax rate that applies to all income) or regressive tax rates (in which tax rates decrease as income increases).

Average Tax Rates versus Marginal Tax Rates

Marginal tax rates only tell half the story when it comes to tax planning. Also important is a person's average tax rate. This rate is a person's total federal tax liability divided by his or her total income. Average tax rates indicate, on average, what the federal government taxes on a person's income. To find your own average tax rate, take your total federal tax liability and divide by your taxable income.

Continue Reading...