2014 Federal Tax Rates and IRS Tax Brackets

2014 Federal Tax Rates, Personal Exemptions, and Standard Deductions

IRS Tax Brackets and Deduction Amounts for Tax Year 2014

Below are the tax rates and related numbers that you will need to prepare your 2014 income tax return, which is due by April 15, 2015.

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2014 IRS Tax Brackets – Your 2015 Tax Refund

There are 7 tax brackets for the Federal income tax: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The amount of tax you owe is based on your filing status and income level.

It’s important to understand that moving into a higher tax bracket does not mean that all of your income will be taxed at that higher rate. Rather, only the money that you earn within a particular bracket is subject to that particular tax rate.

Single:

Taxable Income Tax Rate
$0 to $9,075 10%
$9,076 to $36,900 $907.50 plus 15% of the amount over $9,075
$36,901 to $89,350 $5,081.25 plus 25% of the amount over $36,900
$89,351 to $186,350 $18,193.75 plus 28% of the amount over $89,350
$186,351 to $405,100 $45,353.75 plus 33% of the amount over $186,350
$405,101 to $406,750 $117,541.25 plus 35% of the amount over $405,100
$406,751 or more $118,118.75 plus 39.6% of the amount over $406,750

 

Married Filing Jointly or Qualifying Widow(er):

Taxable Income Tax Rate
$0 to $18,150 10%
$18,151 to $73,800 $1,815 plus 15% of the amount over $18,150
$73,801 to $148,850 $10,162.50 plus 25% of the amount over $73,800
$148,851 to $226,850 $28,925 plus 28% of the amount over $148,850
$226,851 to $405,100 $50,765 plus 33% of the amount over $226,850
$405,101 to $457,600 $109,587.50 plus 35% of the amount over $405,100
$457,601 or more $127,962.50 plus 39.6% of the amount over $457,600

 

Married Filing Separately:

Taxable Income Tax Rate
$0 to $9,075 10%
$9,076 to $36,900 $907.50 plus 15% of the amount over $9,075
$36,901 to $74,425 $5,081.25 plus 25% of the amount over $36,900
$74,426 to $113,425 $14,462.50 plus 28% of the amount over $74,425
$113,426 to $202,550 $25,382.50 plus 33% of the amount over $113,425
$202,551 to $228,800 $54,793.75 plus 35% of the amount over $202,550
$228,801 or more $63,981.25 plus 39.6% of the amount over $228,800

 

Head of Household:

Taxable Income Tax Rate
$0 to $12,950 10%
$12,951 to $49,400 $1,295 plus 15% of the amount over $12,950
$49,401 to $127,550 $6,762.50 plus 25% of the amount over $49,400
$127,551 to $206,600 $26,300 plus 28% of the amount over $127,550
$206,601 to $405,100 $48,434 plus 33% of the amount over $206,600
$405,101 to $432,200 $113,939 plus 35% of the amount over $405,100
$432,201 or more $123,424 plus 39.6% of the amount over $432,200

 

2014 Personal Exemption Amounts

For tax year 2014, the personal exemption amount is $3,950.

When preparing your Federal tax return, you can claim one (1) personal exemption for yourself and one (1) for your spouse, if married. However, if someone else can declare you as a dependent on their tax return, then you are not allowed to claim a personal exemption for yourself.

The personal exemption amount starts to phase out for individuals with $254,200 AGI (adjusted gross income) and married joint filers with $305,050 AGI. It completely phases out at $376,700 for individuals and $427,550 for married joint filers.

2014 Standard Deduction Amounts

There are 2 main types of tax deductions: the standard deduction and itemized deductions. The standard deduction, which is subtracted from your AGI, reduces your taxable income and usually changes each year to reflect inflation.

Filing Status Standard Deduction
Single $6,200
Married Filing Jointly $12,400
Married Filing Separately $6,200
Head of Household $9,100

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With so many electronic filing programs and online tools, some people may not know much about their tax bracket these days. Your tax bracket plays a role in the amount of taxes that you pay. Those with higher income amounts should pay more than those in lower income groups, based on these brackets — at least, that’s the way it’s supposed to be. Other factors, like your capital gains and losses, your filing status, and your applicable deductions, impact the amount of tax you’re liable for throughout the year, as well.

Which tax bracket are you in?

Your marginal tax bracket is the highest percentage of taxes to which your income corresponds. For instance, a single person who earns $25,000 would be in the 15% tax bracket, and an individual earning $100,000 would be in the 28% tax bracket.

Your tax bracket is not the same, however, as your average tax rate, as you pay lower-percentage amounts on your lower levels of income that are included in your average rate. If you are a single person in the 28% tax bracket, for instance, only the amounts of money you earn over $89,351 are taxed at the 28% rate. The amounts you earn between $36,901 and $89,350 are taxed at 25%, and so on. Your tax bracket percentage should also not be used to compute the amount of tax you owe for the tax year, as simply multiplying your bracket by your income will likely produce an amount that’s much higher than what you actually owe.

Tax-Brackets-2014

How are tax brackets and increases determined?

The IRS uses inflation data to determine any adjustments in tax brackets and other tax benefits. For 2014, the IRS made these adjustments (among others) from the previous year:

  • Increased income amounts that correspond to tax brackets.
  • “The standard deduction [rose] to $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly, up from $6,100 and $12,200, respectively, for tax year 2013. … The limitation for itemized deductions claimed on tax year 2014 returns of individuals begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).”
  • “The maximum Earned Income Credit amount is $6,143 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,044 for tax year 2013,” reports the IRS.

What’s in store for next year?

In October, the IRS announced the changes it would be making for the 2015 tax year. For the next tax year, the income amounts with each tax bracket will rise yet again. For instance, a single person will be in the 39.6% bracket if he or she earns more than $413,200, as opposed to $406,571. The standard deduction will rise by $100 for single filers and by $200 for married filers. We will also see increases in other areas, like the maximum earned income credit and the Alternative Minimum Tax exemption amount.

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