2009 IRS Federal Income Tax Brackets

As part of my Thursday routine, I am going to try and provide tax info along with my frugal posts.

The chart below shows how much of each dollar you earn will be taxed and at what rate:



How do you determine your taxable income?

• First, add up all your taxable income. This includes your wages, your traditional IRA withdrawals, bank account interest, dividends, gambling winnings, unemployment compensation, stock gains/losses, rental income/loss, etc.
• Second, subtract any adjustments. The IRS allows several adjustments. The most common are student loan interest, traditional IRA contributions, moving expenses, educator classroom expenses, health savings account contributions, half of self-employment taxes, and college tuition and fees (if you didn't take the credit).
• Third, subtract personal exemptions. This one is easy. In 2009, take the number of people you are claiming and multiply it by $3,650. If your child was born on or before December 31st, he or she counts for the whole year! This exemption is phased out beginning at $250,000 for married-filing-joint returns and $125,000 for single filers.
• Finally, subtract your itemized or standard deduction. Single filers get a $5,700 standard deduction ($11,400 for MFJ filers). But if your itemized deductions (medical expenses, taxes paid, mortgage interest, charitable contributions, casualties and losses, and miscellaneous itemized deductions) are larger, you get to subtract the larger number.

Whew! After all that math, you now have your taxable income (can you see why people pay me to do this stuff for them?)


So take a look at the chart above, and you can get a good idea of how much your federal tax bill will be. Of course, you're still not done yet! Now you have to subtract or add to your tax bill with tax credits or additional taxes, penalties, or interest! But we'll save that for another week...