The 2011 Tax brackets have now been finalized. The new 2011 tax brackets for all filing status is available below.
What has changed in 2011 Tax Bracket vs 2010 Tax Bracket
The recent tax changes in the tax cut deal has extended most of the bush tax cuts, which means a lot of deductions are still available for claiming and some new deductions are in place. The new tax cut deal also includes 2011 Payroll tax cut but lowering the employee part of the social security taxes by 2%, which mean tax payers will pay 4.2% in 2011 instead of 6.2% they paid in 2010. On the flip side the making work pay credit won’t be available for 2011.
2011 Tax Rates & Tax Brackets
The IRS recently released the federal income tax rates for 2011. Here is what the 2011 tax brackets look like:
| Tax Rate | Single | Married Filing Joint | Married Filing Separate | Head of Household |
|---|---|---|---|---|
| 10% | Up to $8,500 | Up to $17,000 | Up to $8,500 | Up to $12,150 |
| 15% | $8,501 – $34,500 | $17,001 – $69,000 | $8,501 – $34,500 | $12,151 – $46,250 |
| 25% | $34,501 – $83,600 | $69,001 – $139,350 | $34,501 – $69,675 | $46,251 – $119,400 |
| 28% | $83,601 – $174,400 | $139,351 – $212,300 | $69,676 – $106,150 | $119,401 – $193,350 |
| 33% | $174,401 – $379,150 | $212,301 – $379,150 | $106,151 – $189,575 | $193,351 – $379,150 |
| 35% | Over $379,150 | Over $379,150 | Over $189,575 | Over $379,150 |
As a comparison, this is how 2010 Tax brackets looked like -
2010 Tax Rates & Tax Brackets
| Tax Rate | Single | Married Filing Joint | Married Filing Separate | Head of Household |
|---|---|---|---|---|
| 10% | Up to $8,375 | Up to $16,750 | Up to $8,375 | Up to $11,950 |
| 15% | $8,376 – $34,000 | $16,751 – $68,000 | $8,376 – $34,000 | $11,951 – $45,500 |
| 25% | $34,001 – $82,400 | $68,001 – $137,300 | $34,001 – $68,650 | $45,501 – $117,650 |
| 28% | $82,401 – $171,850 | $137,301 – $209,250 | $68,651 – $104,625 | $117,651 – $190,550 |
| 33% | $171,851 – $373,650 | $209,251 – $373,650 | $104,626 – $186,825 | $190,551 – $373,650 |
| 35% | Over $373,650 | Over $373,650 | Over $186,825 | Over $373,650 |
As you can see the fix for marriage penalty has been extended again. I wish they just make it permanent. If you want to know more about the recent tax changes, read – 2011 tax changes post. To know how your tax will be affected and to plan accordingly, Tax foundation has an excellent calculator -
2011 Tax calculator
{ 2 comments… read them below or add one }
My CPA tells me that if my gross sales in my business plus my wife’s gross salary is over $250K that my new tax rate could be as high as 55% … Is this correct?
Thanks
Erik
Erik, I am not sure where he is getting the 55% from. For federal you will pay $27,087.50 plus 28% of the excess over $139,350, if you file married/jointly. And if you are taking gross sales, you will have a lot small business deductions, expenses, regular deductions, personal exemptions… Your taxable pay could be much less than $250k.
May be he is including the Social Security + medicare + state tax and giving you the combined % net.
Federal taxes : $27,087.50 plus 28% of the excess over $139,350, if you file married/jointly. Federal tax is a graduated tax, for example you won’t a flat rate for your entire salary. If your income is $100000, the first $11,600 is tax free (standard deduction), then the next $17,000 is taxed at 10% rate, and from $17,000- $69,000 you will pay $1,700 plus 15% of the excess over $17,000 and so on…
Social security taxes : 10.4% on earnings up to $106,800 (for your business) + 4.2% on earnings up to $106,800 (for your wife, if she is salaried employee)
Medicare : 2.9% on all earnings (for you as a self employed business owner) + 1.45% on all earnings (for your wife, if she is salaried employee)
State tax : If you are living in a high tax state that could be another 7-10%
Federal tax alone as far as I know cannot be 55% for 250k gross.
{ 2 trackbacks }