# Current Tax Brackets

Before you go, we thought you'd like these...
For 2008, the six income tax rates for individual taxpayers are 10%, 15%, 25%, 28%, 33%, and 35%.
In addition to cutting tax rates, the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 created the 10% tax bracket for lower incomes.
In 2007 for single taxpayers and married persons filing a separate return, the first \$8,025 of income is taxed at this rate. For married persons filing a joint return, the first \$16,050 is taxed at 10%. For persons filing as head of household, the first \$11,450 is taxed at the 10% rate.
It helps to think of your tax rate in terms of a marginal tax rate. This is the tax rate on the last dollar of income that you earned. As your taxable income increases, you are taxed at a higher tax rate as a result of being bumped into a higher income tax bracket.
The following tables show the cutoff points in taxable income for 2008 that mark each income tax bracket:
Table A: Single tax return:
 If taxable income is: Amount of taxthat you owe is: More than: However, not over: This amount (or %) plus % of: Amount over: \$0 \$7,550 10% -- \$8,025 \$32,550 \$803 + 15% \$8,025 \$32,550 \$78,850 \$4,481 + 25% \$32,550 \$78,850 \$164,550 \$16,056 + 28% \$78,850 \$164,550 \$357,700 \$40,052 + 33% \$164,550 \$357,700 -- \$103,792 + 35% \$357,700

Table B: Married Filing Jointly (MFJ) or Qualifying Widow(er):
 If taxable income is: Amount of taxthat you owe is: More than: However, not over: This amount (or %) plus % of: Amount over: \$0 \$16,050 10% -- \$16,050 \$65,100 \$1,605 + 15% \$16,050 \$65,100 \$131,450 \$8,963 + 25% \$65,100 \$131,450 \$200,300 \$25,550 + 28% \$131,450 \$200,300 \$357,700 \$44,828 + 33% \$200,300 \$357,700 -- \$86,770 + 35% \$357,700

Table C: Head of Household tax return:
 If taxable income is: Amount of taxthat you owe is: More than: However, not over: This amount (or %) plus % of: Amount over: \$0 \$11,450 10% -- \$11,450 \$43,650 \$1,145 + 15% \$11,450 \$43,650 \$112,650 \$5,975 + 25% \$43,650 \$112,650 \$182,400 \$23,225 + 28% \$112,650 \$182,400 \$357,700 \$44,828 + 33% \$200,300 \$357,700 -- \$96,770 + 35% \$357,700

Table D: Married Filing Separate (MFS) return:
 If taxable income is: Amount of taxthat you owe is: More than: However, not over: This amount (or %) plus % of: Amount over: \$0 \$8,025 10% -- \$8,025 \$32,550 \$803 + 15% \$8,025 \$32,550 \$65,725 \$4,481 + 25% \$32,550 \$65,725 \$100,150 \$12,775 + 28% \$65,725 \$100,150 \$178,850 \$22,414 + 33% \$100,150 \$178,850 -- \$48,385 + 35% \$178,850

For example, say you file a single return and have taxable income of \$40,000 in 2008. Using Table A, above, your tax liability would be \$4,481 plus 25% of income above \$32,550, or \$7,450 in your case. That works out to be \$1,863 for a total federal income tax liability of \$6,344.
To prevent you from being bumped into the next-higher bracket as a result of a cost-of-living wage increase, the IRS adjusts upward the amount of income that can be earned for each tax bracket every year. This phenomenon of being bumped into the next-higher tax bracket is sometimes called "bracket creep."
2008-07-21 17:03:58