2015 Tax Brackets & Standard Deductions Increased

G.E. Miller for 20somethingfinance.com writes: The IRS just released it’s 2015 tax brackets and standard deduction amounts, and there will be a number of inflation adjustments over the 2014 tax brackets and standard deductions.

As I noted in my open enrollment post, this would be a good time to estimate what your modified adjusted gross income might be next year and adjust your tax allowances so that you don’t end up getting penalized for owing too much in taxes or getting too large of a refund (which is basically lending your money to the government, interest-free).

Before getting to the tax bracket changes, it’s important to know that the highlighted rates represent the income tax rate you owe for the portion of your taxable income that falls into that bracket. As an example with the below rates, if you are married filing jointly and your combined taxable income is $78,000. Your tax tax rate on your first $18,450 of taxable income is 10%, while taxable income between $18,450 and $74,900 is taxed at 15%, and your income from $74,900 to $78,000 is taxed at 25%.

Many incorrectly assume that if your total income peaks at the 35% tax bracket, for example, all of your income is taxed at that rate – not so. The United States federal income tax system is a “progressive” system and the result is your actual tax rate is less than the tax rate in the top bracket you are in. With that in mind, here are the 2015 tax brackets.

2015 Tax Bracket Rates

2015 Tax Brackets for Singles:

10% – $0-$9,225 (up from $9,075)
15% – $9,225-$37,450 (up from $9,075-$36,900)
25% – $37,450-$90,750 (up from $36,900-$89,350)
28% – $90,750-$189,300 (up from $89,350-$186,350)
33% – $189,300-$411,500 (up from $186,350-$405,100)
35% – $411,500-$413,200 (up from $405,100-$406,750)
39.6% – $413,200+ (up from $406,750)

2015 Tax Brackets for Married Filing Jointly:

10% – $0-$18,450 (up from $0-$18,150)
15% – $18,450-$74,900 (up from $18,150-$73,800)
25% – $74,900-$151,200 (up from $73,800-$148,850)
28% – $151,200-$230,450 (up from $148,850-$226,850)
33% – $230,450-$411,500 (up from $226,850-$405,100)
35% – $411,500-$464,850 (up from $405,100-$457,600)
39.6% – $464,850+ (up from $457,600)

2015 Tax Brackets for Married Filing Separately:

10% – $0-$9,075 (up from $0-$9,075)
15% – $9,225-$37,450 (up from $9,075-$36,900)
25% – $37,450-$75,600 (up from $36,900-$74,425)
28% – $75,600-$115,225 (up from $74,425-$113,425)
33% – $115,225-$205,750 (up from $113,425-$202,550)
35% – $205,750-$232,425 (up from $202,550-$228,800)
39.6% – $232,425+ (up from $228,800+)

2015 Tax Brackets for Head Of Household:

10% – $0-$13,150 (up from $0-$12,950)
15% – $13,150-$50,200 (up from $12,950-$49,400)
25% – $50,200-$129,600 (up from $49,400-$127,550)
28% – $129,600-$209,850 (up from $127,550-$206,600)
33% – $209,850-$411,500 (up from $206,600-$405,100)
35% – $411,500-$439,000 (up from $405,100-$432,200)
39.6% – $439,000+ (up from $432,200+)

2015 Standard Deductions

Standard tax deductions will lower your taxable income by the following, if you don’t decide to itemize taxes. The 2015 standard deductions have also increased due to inflation adjustments:

• $6,300 for single filers (up from $6,200)
• $6,300 for married, filing separately (up from $6,200)
• $12,600 for married filing jointly (up from $12,400)
• $9,250 for head of household (up from $9,100)
• $1,050 for dependents (up from $1,000)