Where Will You Be in the 2014 Income Tax Brackets?

Couple stresses over finances.

Although many have finished their taxes  for the 2013 tax year, the start of the new year is also an ideal time to look ahead for the current tax year. This is especially true if you haven't looked over the updated 2014 income tax brackets, which the Internal Revenue Service adjusted for inflation and released in late October 2013. The adjustments increased the brackets by about 1.6 percent over figures from 2013.

The New 2014 Income Tax Brackets

The 2014 income tax brackets are outlined below. These figures are for the current tax year, for which taxpayers will be filing in April 2015. The 2013 income tax brackets will be used for calculating tax for income earned last year and filed by April 15, 2014.

Tax Rate

Single

Head of Household

Married Filing Jointly and Qualifying Widow/Widowers

Married, Filing Separately

10%

Up to $9,075

Up to $12,950

Up to $18,150

Up to $9,075

15%

$9,076 to $36,900

$12,951 to $49,400

$18,151 to $73,800

$9,076 to $36,900

25%

$36,901 to $89,350

$49,401 to $127,550

$73,801 to $148,850

$36,901 to $74,425

28%

$89,351 to $186,350

$127,551 to $206,600

$148,851 to $226,850

$74,426 to $113,425

33%

$186,351 to $405,101

$206,601 to $405,100

$226,851 to $405,100

$113,426 to $202,550

35%

$405,101 to $406,750

$405,101 to $432,200

$405,101 to $457,600

$202,551 to $228,800

39.60%

$406,751 or more

$432,201 or more

$457,601 or more

$228,801 or more

The tax brackets set forth by the IRS are progressive, meaning the increased percentage applies only to income that falls within that range. So, for instance, every taxpayer that is filing singly will be taxed the same $907.50 on the first $9,075 they earn, and so on.

Other Changes for the 2014 Tax Year

In addition to these adjustments to the 2014 income tax brackets, the IRS also announced adjustments to the following tax benefits:

  • Standard deduction is up to $6,200 for single and married persons filing separate returns, $12,400 for married couples filing jointly, and $9,100 for heads of household.
  • Limitation for itemized deductions starts at incomes of $254,200 for singles, or $305,050 for married couples filing jointly.
  • Personal exemption rose to $3,950, over $3,900 from 2013. The IRS notes, "However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $254,200 ($305,050 for married couples filing jointly). It phases out completely at $376,700 ($427,550 for married couples filing jointly)."
  • Alternative minimum tax exemption amount for tax year 2014 is $52,800 ($82,100, for married couples filing jointly). The 2013 exemption amount was $51,900 ($80,800 for married couples filing jointly).

This article was contributed by Elyssa Kirkham of GOBankingRates, a leading consumer banking and personal finance website that specializes in connecting consumers with the best interest rates nationwide.

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