Tax Rate Schedules

The tax rate schedules below are provided to help you determine your marginal tax bracket at both a federal and state level.  Locate your taxable income in the appropriate tax filing (single, joint, etc.) to estimate which marginal tax bracket you are in. 

It is important to know your marginal tax bracket to understand the tax consequences of additional income.  For example, if you earn $120,000 from your job and have $20,000 of various deductions, your taxable income would be $100,000.  As a single person living in California, you would be in the 28% tax bracket at the federal level and 9.55% at the state level, for a combined tax rate of 37.55%.  That means that any additional income would be taxed at 37.55%. 

Additional taxable income may come from interest from bank accounts and/or dividends and capital gains from taxable investments.  In this scenario, if you earned an additional $5,000 in interest and dividends, your additional tax liability would be approximately $1,878 ($5,000 * 37.55%) leaving you really with $3,122.  With this knowledge, a few questions arise:

Tax efficient investing is important to not only reduce your current tax liabilities, but to manage your future tax liabilities as well.  It also helps generate better after-tax returns.

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Federal 2009 Tax Rates

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Married Filing Jointly
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Married Filing Separately
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Head of Household
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