2014 Federal Tax Brackets

The 2014 Federal tax brackets are out: a little different this year after the Fiscal Cliff agreements passed by Congress.  In fact this was one of the most closely watched tax debates ever, and concluded with lots of changes to the 2014 federal tax brackets.

What’s New With 2014 Federal Tax Brackets?

Starting with tax year 2013, there’s a new federal tax bracket at the top of the heap: 39.6% for top-earning taxpayers making over $400,000. This new tax bracket exists for all filing status categories, as follows:

2014 IRS Tax Brackets Filing Status: Individual
Taxable Income Marginal Tax Rate
up to $8,925 10.00%
$8,925-$36,250 15.00%
$36,250 To $87,850 25.00%
$87,850 To $183,250 28.00%
$183,250 To $398,350 33.00%
$398,350 To $400,000 35.00%
Over $400,000 39.60%

Many feared the 10% rate would go away but luckily publication of the 2014 federal tax brackets by the IRS showed that it remained intact.  Here’s how the rest turned out:

2014 IRS Tax Brackets Filing Status: Married Filing Jointly
Taxable Income Marginal Tax Rate
up to $17,850 10.00%
$17,850 To $72,500 15.00%
$72,500 To $146,400 25.00%
$146,400 To $223,050 28.00%
$223,050 To $398,350 33.00%
$398,350 To $450,000 35.00%
Over $450,000 39.60%

 

2014 IRS Tax Brackets Filing Status: Head of Household
Taxable Income Marginal Tax Rate
up to $12,750 10.00%
$12,750 To $48,600 15.00%
$48,600 To $125,450 25.00%
$125,450 To $203,150 28.00%
$203,150 To $398,350 33.00%
$398,350 To $425,000 35.00%
Over $425,000 39.60%

A glance at the 2014 Federal Tax Brackets will show that most of us will pay under 30% in federal income taxes.  And don’t forget, these are marginal tax rates.  That means you don’t pay 28% or 33% or whatever rate your tax bracket shows, on all of your taxable income.  You only pay your top rate on the bit that’s in that bracket.  The rest of your income is taxed at rates corresponding to the tax brackets below your marginal tax rate.

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