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A Preview of the 2008 Federal Income Tax Brackets

By JLP | September 26, 2007

Here’s a look at the expected Federal Income Tax brackets for 2008. The official brackets from the IRS won’t be available until later this year. I found these numbers in an article in today’s Wall Street Journal, which has the following three individuals listed as the source for their information:

William Massey, RIA tax analyst at Thomson Tax & Accounting
George Jones, CCH
James C. Young, Professor at Northern Illinois University

The brackets:

2008 Federal Income Tax Brackets (Married Filing Jointly)

2008 Federal Income Tax Brackets (Most Single Filers)

In addition, the basic standard deduction is supposed to increase to $10,900 (up $200 from 2007) for married filing jointly and for most single filers it will increase to $5,450 (up $100 from 2007). The personal exemption will increase to $3,500, which is a $100 increase over 2007.

A lot of this won’t mean diddly to a lot of filers if congress doesn’t do something with the AMT, which is expected to impact 25 million people in 2008 if something isn’t done. OUCH! Long-time readers know my distaste for the AMT.

For those who are interested, here’s some additional tax posts I have done that you might find helpful:

Tax Stuff You Need to Keep In Your Records

50 of the Most Easily Overlooked Tax Deductions

2007 Federal Income Tax Brackets

401(k) Contribution Limits for 2007

What is Modified Adjusted Gross Income?

Tax Links: Online Tax Resources

How to Calculate Tax-Equivalent Yield

Social Security Wage Base for 2007

Topics: Tax Planning, Taxes | 38 Comments »


38 Responses to “A Preview of the 2008 Federal Income Tax Brackets”

  1. Sean Says:
    September 26th, 2007 at 4:23 pm

    I see a mistake….

    single filer for 35% in 2008 should be a little bit higher ….at least thats what I hope

  2. Miguel Says:
    September 26th, 2007 at 5:14 pm

    “AMT… expected to impact 25 million people in 2008 if something isn’t done”

    Heh, heh, heh, welcome to my AMT world…

  3. Mrs. Micah Says:
    September 26th, 2007 at 7:41 pm

    I’d love to be in the 35% bracket, even if I had to pay all those taxes. *sighs*

  4. MONEY CLIPPED » Jump Start On Your 2008 Taxes Says:
    September 26th, 2007 at 9:31 pm

    […] AllFinancialMatters has a preview of the 2008 Federal Income Tax Brackets and is kind enough to provide you with the tax rate tables for “Married, Filing Jointly” and “Most Single Filers” plus the new personal exemption and standard deduction amounts. […]

  5. BuildandSucceed Says:
    September 26th, 2007 at 10:08 pm

    Wow… If you made $1,000,000 you’d be giving away $350,000+… That’s crazy

  6. Tim Says:
    September 27th, 2007 at 2:26 pm

    If you made $1,000,000 a lot of it would not likely be salary income, much of it would be capital gains, taxed at a different rate.

  7. Free Money Finance Says:
    September 28th, 2007 at 5:19 am

    Star Money Articles for the Week of September 24

    Here are some recent interesting posts from the MoneyBlogNetwork and beyond: Consumerism Commentary says Best Buy wants to train us hi-def novices. AllFinancialMatters previews 2008 tax brackets. MightyBargainHunter gives his thoughts on Maxed Out. Fiv…

  8. Weekly Roundup, Redesign Edition on Consumerism Commentary: A Personal Finance Blog Says:
    September 28th, 2007 at 2:34 pm

    […] A Preview of the 2008 Federal Income Tax Brackets. AllFinancialMatters is way ahead of the game. I haven’t started by 2007 taxes yet. […]

  9. Buildandsucceed Says:
    September 28th, 2007 at 2:58 pm

    @Tim
    True, but you would still be taxed heavily.

    And there are tons of CEO’s with $1,000,000+ salaries.

  10. Roundup for week of 23 September 2007: Plumbing fixtures edition at Mighty Bargain Hunter Says:
    September 30th, 2007 at 11:44 pm

    […] All Financial Matters gives a sneak peek at the 2008 tax brackets. […]

  11. Ben Says:
    October 1st, 2007 at 9:39 am

    @Buildandsucceed

    You wouldn’t be paying the full 35% on a $1000000 income. Depending if you are single or married, you would pay 10% on the first bracket, 15% on the next bracket, 25% on the next, and so on. That’s why its called a progressive income tax. As your income progresses, you pay an addition percentage.

  12. Stephanie Says:
    January 17th, 2008 at 3:36 pm

    Does anyone know: Is the tax bracket you’re in based on what your pre-tax and other deductions income is, or is it based on what you’re in after all the deductions.
    For example, could contributing to my 401(k) put me in a lower tax bracket?

  13. JLP Says:
    January 17th, 2008 at 3:50 pm

    Stephanie,

    Your bracket is based on your taxable income. So, your 401(k) contributions could put you in a lower bracket.

  14. ernie Says:
    January 19th, 2008 at 1:58 pm

    It is time to stop taxing Social Security or at least increase the $32000 limit for married filers and increase it with the cost of living.
    Thank you Bill Clinton for taxing my hard earned retirement payments.

  15. Diane Says:
    January 24th, 2008 at 1:47 pm

    Hi, If you had the choice between taking out $40,000.00 of your inherited cash which is part of a larger IRA to pay off debts (but didnt have to sell stocks to get that $ & your tax bracket is $15% but perhaps less since I am on SSD & earn less than 14,000.00 a year) or take out a 9% re-fi on a 2nd home, which is being rented for $1000.00 a month that will be sold in 3 years with a contract)- is it as simple as comparing interest rates to decide that a 9% re-fi is a better deal than a 15% deal? ( the 9% is non-negotiable as I can only get a “no doc/no asset loan” at that rate unfortunately)or are there other matters to consider. One that I can think of is thats the re-fi includes $5000.00 in closing costs put into the loan & the rule that states that one should not re-fi if you are going to sell within 3 years due to being unable to recoup the closing costs – comes to mind. All reliable info welcome but it has to come asap. Greatly appreciate anyone’s attention to help. Diane

  16. Spinoff question...how do I see if dh switching jobs will help us tax wise - AmityMama.com Says:
    February 23rd, 2008 at 1:08 pm

    […] Spinoff question…how do I see if dh switching jobs will help us tax wise I don’t really understand it. I say this is a spin-off because of the other post here in the forum about my dh thinking about moving out of administration and into teaching which would be a big pay cut. Someone mentioned checking the tax brackets. I looked at this site here: A Preview of the 2008 Federal Income Tax Brackets—AllFinancialMatters Ok, I also looked at this years tax return and we use the form: 1040 Do I look at our total income and then check that number on the tax brackets? Or do I look at line 43 that says "taxable income" and use that number when looking at the tax brackets? The two numbers are vastly different. (our taxable income is around $40K less than our total income) How do I "guesstimate" what tax bracket we’d be in if dh switches jobs? Do I look at what his teaching salary most likely would be and then add mine to it?…..but if he switches jobs, his income would not change until August 2008. Does this make sense? I sure hope so. When I look at those tax brackets, it looks like there is a big jump from being in the 15% bracket up to a 25% bracket! Michelle __________________ "If it has to do with following rules, then it sure aint’ grace!" My feedback thread: http://www.amitymama.com/vb/showthread.php?t=83439 [img]http://im1.shutterfly.com/procserv/47b4ce25b3127cce99c876b7033800000040108IatGbNy3bW […]

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    June 3rd, 2008 at 6:22 pm

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  18. federal tax brackets Says:
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  19. 2008 federal tax bracket Says:
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    July 8th, 2008 at 4:57 pm

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  21. Karen Says:
    July 21st, 2008 at 10:58 pm

    Quote:
    Diane Says:
    January 24th, 2008 at 1:47 pm
    Hi, If you had the choice between taking out $40,000.00 of your inherited cash which is part of a larger IRA to pay off debts (but didnt have to sell stocks to get that $ & your tax bracket is $15% but perhaps less since I am on SSD & earn less than 14,000.00 a year) or take out a 9% re-fi on a 2nd home, which is being rented for $1000.00 a month that will be sold in 3 years with a contract)- is it as simple as comparing interest rates to decide that a 9% re-fi is a better deal than a 15% deal?

    Gee Diane….You’re on tax deferred disability benefits, AND own a second home to consider refinancing? Look no further. I now know one reason why my tax liabilities are so high! Someone has to pay the bills for others that are “poor”!

  22. 2008 individual federal tax rates Says:
    August 2nd, 2008 at 10:22 am

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  23. AFM Reader: I Want to Pay Cash for a House in 12 Years! | AllFinancialMatters Says:
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  24. Gail Says:
    September 8th, 2008 at 11:35 am

    I am 62. If I take $6,000 out of my 401K will I be charged a 20% withdrawel fee, as well as paying 25% income tax on it? If so, isn’t that double taxation?

  25. Juan Says:
    October 3rd, 2008 at 10:51 am

    Huh?

  26. mookie Says:
    October 27th, 2008 at 4:21 pm

    Why is the presidential campaign always talking about $250,000 as being the highest bracket that will be affected by Barack tax plan. I don’t see $250k on the list?
    Please help edecuate me before the election.
    Thanks,

  27. Denise Cave Says:
    November 1st, 2008 at 9:26 am

    mookie if you listen the $250K has been reduced to $120K. AND Obamma said to a crowd yesterday that he thought those that do not want to “share” are selfish. Hope that helps. Ask anyone who is old enough to remember the Carter years what that was like – I predict this will be even worse.

  28. Rick Says:
    November 6th, 2008 at 8:49 am

    My girlfriend and her two children have lived with me the entire year. She is seperated going through a divorce. Even though she is still considered as being married do I have a right to claim her and her children? She has received no child support.

  29. Nick Says:
    November 16th, 2008 at 10:35 pm

    I’m looking at earning 34,000 for my first full time job. Looking at these brackets, makes me realize why so many people end up marrying. Besides the majority of people who claim love, I have to think there are some people who are enticed by a different incentive. The differences in tax brackets for single and married are HUGE(especially when counted twice for partners). The 32,000-78,000 single bracket is 25% while the 16,000-65,000 married bracket is only 15%. If I’m not mistaken, having two incomes would be easier to live off of than one, so, honestly, why is there such a huge incentive? I know the defense is “well they probably have kids,” but not every married couple has children, and I think(not sure) there are other benefits on top of the married benefit for having dependents. I’m not saying people don’t marry for love, I’m just upset that there is such a large difference. Am I the only one?

  30. Jeremy Says:
    November 18th, 2008 at 9:27 am

    Nick,

    If you think that a man gains financially by getting married……..I just don’t know what to say :)

    But you’ve obviously never been married.

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  32. BizzyBlog » Geithner’s Tax Troubles: There’s Much More, and the Press Is Virtually Ignoring It Says:
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  35. Geithner’s Tax Troubles: There’s Much More, and the Press Is Virtually Ignoring It | Got Access News Says:
    January 22nd, 2009 at 1:30 am

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    […] mean that Geithner withdrew $20000, and paid about $7000 in federal and state taxes (assuming federal rates of 28% or 33% plus roughly 5% for Maryland). If he had paid all of his taxes and the penalty on time, Geither […][Continue Reading] […]

  38. Troy Says:
    March 19th, 2009 at 12:46 pm

    Is this total? What i mean is I’m a W2 employee so I pay half my taxes the company i work for pays half. If I decide to go into business for myself I’m responsible for the entire payment. Are these percentages the whole 100% so if I was in the 25% bracket, do I actually pay 12.5% and my employer pays 12.5%?

Comments