What You Need To Know about the Federal Income Tax Brackets 2011 – The six different federal income tax brackets are 10%, 15%, 25%, 28%, 33%, and 35%. Which bracket you fall in depends not just on your income, but on your filing status as well. The four different filing statuses are single, head-of-household, married separate, and married joint.
Single
| Taxable income over | But not over | Rate |
| $0.00 | $8,700.00 | 10.00% |
| $8,700.00 | $35,350.00 | 15.00% |
| $35,350.00 | $85,650.00 | 25.00% |
| $85,650.00 | $178,650.00 | 28.00% |
| $178,650.00 | $388,350.00 | 33.00% |
| $388,350.00 | 35.00% |
Married, Joint
| Taxable income over | But not over | Rate |
| $0.00 | $17,400.00 | 10.00% |
| $17,400.00 | $70,700.00 | 15.00% |
| $70,700.00 | $142,700.00 | 25.00% |
| $142,700.00 | $217,450.00 | 28.00% |
| $217,450.00 | $388,350.00 | 33.00% |
| $388,350.00 | 35.00% |
Married, Separate
| Taxable income over | But not over | Rate |
| $0.00 | $8,700.00 | 10.00% |
| $8,700.00 | $35,350.00 | 15.00% |
| $35,350.00 | $71,350.00 | 25.00% |
| $71,350.00 | $108,725.00 | 28.00% |
| $108,725.00 | $194,175.00 | 33.00% |
| $194,175.00 | 35.00% |
Head of Household
| Taxable income over | But not over | Rate |
| $0.00 | $12,400.00 | 10.00% |
| $12,400.00 | $47,350.00 | 15.00% |
| $47,350.00 | $122,300.00 | 25.00% |
| $122,300.00 | $198,050.00 | 28.00% |
| $198,050.00 | $388,350.00 | 33.00% |
| $388,350.00 | 35.00% |
But…these tax brackets might not end up applying. If the IRS feels a taxpayer has reduced his or her income tax too much based on total income, the IRS is allowed by law to assess an Alternative Minimum Tax, or AMT for short. The AMT is imposed at a nearly flat rate on an adjusted amount of taxable income above a certain threshold (exemption).
This exemption is substantially higher than the exemption from regular income tax. Regular taxable income is adjusted for certain items and computed differently for AMT, such as depreciation and medical expenses. No deduction is allowed for state income taxes or miscellaneous itemized deductions in computing AMT income. Taxpayers with incomes above the exemption rate, whose regular Federal Income Tax is below the amount of AMT, must pay the higher AMT amount.
There are also separate AMT tax brackets:
| Status | Single | Married Joint | Married Separate | Trust | Corporation |
| Tax Rate: Low | 26% | 26% | 26% | 26% | 20% |
| Tax Rate: High | 28% | 28% | 28% | 28% | 20% |
| High Rate Starts | $175,000 | $175,000 | $87,500 | $87,500 | n/a |
| Exemption 2009 | $46,700 | $70,950 | $35,475 | $22,500 | $40,000 |
| Exemption 2010 | $47,450 | $72,450 | $36,225 | $22,500 | $40,000 |
| Exemption phase-out starts at | $112,500 | $150,000 | $75,000 | $75,000 | $150,000 |
| Zero 2009 exemption at | $299,300 | $433,800 | $216,900 | $165,000 | $310,000 |
| Zero 2010 exemption at | $302,300 | $439,800 | $219,900 | $165,000 | $310,000 |
| Capital gain rate | 25% | 25% | 25% | 25% | 20% |
The AMT has most likely outlived its useful life. It was first passed in 1969, but due to years of reform and reconciliation, the tax code has changed dramatically. Tax shelters that were available then are no longer available today, and have not been for awhile.
The AMT is particularly punitive to high income earners in high tax jurisdictions. Not only do they have to pay high local and state taxes, but the IRS does not allow the full deduction simply because they make a lot of money. Therefore, they wind up paying more in federal taxes as well.
If you're confused and need assistance with your tax preparation, contact us. We can help. Call us at 888-727-8796 or email info@irsmedic.com.
