IRS Tax Year 2010 Inflation Adjustments + Tax Rates

Among the tax code provisions that must be adjusted annually for inflation are personal exemptions and standard deductions. Rev. Proc. 2009-50 provides the full details, but here's a thumbnail sketch:

• Personal exemptions will remain the same, at $3,650
• Standard deductions for MFJ taxpayers will remain the same, at $11,400
• Standard deductions for single and MFS taxpayers will remain the same, at $5,700
• Standard deductions for HoH taxpayers will increase $50, to $8,400
• The annual gift tax exclusion will remain unchanged, at $13,000
• The maximum EITC for families with two qualifying children will increase $8, to $5,036, while the income limit for the credit for MFJ filers with two qualifying children will be $45,295 (for more EITC information, check IRS' website for the EITC Tax Preparer Toolkit)
• The foreign earned income exclusion will increase $100, to $91,500

Additionally, the revenue procedure presents the tax brackets for 2010.

• For single taxpayers, the brackets fall out as follows:
• Taxable income up to $8,375 = 10%
• Taxable income over $8,375 to $34,000 = 15%
• Taxable income over $34,000 to $82,400 = 25%
• Taxable income over $82,400 to $171,850 = 28%
• Taxable income over $171,850 to $373,650 = 33%
• Taxable income over $373,650 = 35%

Accordingly, the brackets for MFJ are:

• Taxable income up to $16,750 = 10%
• Taxable income over $16,750 to $68,000 = 15%
• Taxable income over $68,000 to $137,300 = 25%
• Taxable income over $137,300 to $209,250 = 28%
• Taxable income over $209,250 to $373,650 = 33%
• Taxable income over $373,650 = 35%

John R. Dundon, EA - www.1040.com/jd - Taxpayer Advocate - Enrolled with the United States Department of Treasury to Practice before the IRS - Under contract with the United States Department of Treasury as a Certified ITIN Acceptance Agent - Direct phone # 720-234-1177