IRS issues 2014 tax brackets

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The Internal Revenue Service has announced its annual inflation adjustments for more than 40 tax provisions.

We’ll get to most of them eventually, but let’s start with the one that you’re most interested in: What’s your coming tax rate bracket?

Because the changes are minimal, most of us will likely stay in the same income bracket as this year. But to be sure, check out the table below that details by filing status how much income falls into the seven income tax rates.

2014 Tax Brackets (for taxes due April 15, 2015)

Tax rate Single filers Married filing jointly or qualifying widow/widower Married filing separately Head of household
10% Up to $9,075 Up to $18,150 Up to $9,075 Up to $12,950
15% $9,076 to $36,900 $18,151 to $73,800 $9,076 to $36,900 $12,951 to $49,400
25% $36,901 to $89,350 $73,801 to $148,850 $36,901 to $74,425 $49,401 to $127,550
28% $89,351 to $186,350 $148,851 to $226,850 $74,426 to $113,425 $127,551 to $206,600
33% $186,351 to $405,100 $226,851 to $405,100 $113,426 to $202,550 $206,601 to $405,100
35% $405,101 to $406,750 $405,101 to $457,600 $202,551 to $228,800 $405,101 to $432,200
39.6% $406,751 or more $457,601 or more $228,801 or more $432,201 or more

Progressive tax rates, brackets

Remember, even if your taxable income falls into a higher tax bracket, that’s not the full tax rate you’ll pay. Because of our tax system’s progressiveness, only your last dollars in your final tax bracket are taxed at that rate.

For example, you are a single taxpayer with taxable income of $90,000. This is your gross income less any adjustments (such as moving expenses when you relocated for your new job), your personal exemption amount (which in 2014 will be $3,950) and your itemized or standard deduction (look for next year’s amounts in a future blog post). That’s a nice chunk of change; no wonder you moved for that job!

That income level puts you in the 28 percent tax bracket.

But only $649 is taxed at that rate. The rest of your taxable income is taxed at the rates — 10 percent, 15 percent and 25 percent — leading up to the 28 percent tax rate bracket.

Planning purposes only

Also remember that these tax brackets are for your 2014 income. You’ll use them when you file your 2014 tax return in 2015.

For the coming tax season that will begin a bit late next year, you’ll use the 2013 tax year income tax brackets to figure your tax bill.

Yes, it can be confusing. But for folks who want to get a head start on 2014 tax planning, have fun!


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Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and co-author of the e-book “Future Millionaires’ Guidebook.”