Be Prepared for Federal Income Tax Rates in 2014

If you earn money in the United States, chances are that some of that money will be subject to federal income tax rates. 2014, like every year, brings changes to those rates. While Congress can always change the law, the Internal Revenue Service does a great job of publishing the updated federal income tax rates. 2014 numbers, current as of Dec. 10, 2013, appear below.

Federal income tax rates 2014 edition:

Source: Internal Revenue Service, 2014 Form W-4S, as of Dec. 10, 2013. 

 "Line 5" in the above chart refers to your taxable income, which is your income after any deductions and exemptions that you are entitled to claim.

Of course, not much is simple in the world of taxes. These tax rates, which are in addition to the Social Security and Medicare taxes that are withheld from your paycheck, apply to ordinary income you may earn. Long-term capital gains and dividends are taxed at different rates, an additional Medicare tax of 0.9% now applies to high earners, as does an additional 3.8% net investment income tax.

What you need to do about it
If you've got a decent salary, chances are good that some of your income will be subject to these federal income tax rates. 2014 taxes, like in most years, will need to be paid through withholding from your paycheck or through the quarterly estimated tax process.

Chances are, you don't yet know exactly what your 2014 income or tax burden will be. While you may be subject to penalties if you underpay your estimated taxes by too much, the Internal Revenue Service lets you estimate and get close. The key is to pay enough through timely estimated tax payments or payroll withholdings to be covered by a safe harbor provision. That way, you won't owe penalties if you pay your remaining 2014 income tax due by its anticipated due date of April 15, 2015.


Your reward after a career of paying taxes
After you've completed your career of working while dutifully paying your taxes, it's time to reap the rewards. Social Security plays a key role in your financial security and is one of the most common benefits available to American retirees.

After your lifetime of effort to fund your Social Security benefit, be sure to maximize the value of the payment you get from it. In our brand-new free report, "Make Social Security Work Harder For You," our retirement experts give their insight on making the key decisions that will help ensure a more comfortable retirement for you and your family. Click here to get your copy today.


Read/Post Comments (5) | Recommend This Article (22)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 14, 2013, at 3:43 PM, prginww wrote:

    No complaints Libdroids!

  • Report this Comment On December 14, 2013, at 9:23 PM, prginww wrote:

    These charts mean nothing. They dont take into account all the deductions people get like Interest on home loans and charitable contributions. So the actual rates kick in after your income is determined. However, the taxes for SS are taken out before your actual income is determined. So the government could increase the SS Tax or the tax for Medicare and that may do more to increase taxes than anything you can possibly imagine.

  • Report this Comment On December 14, 2013, at 9:26 PM, prginww wrote:

    SS is not a reward. You paid it to the Federal Govt.

  • Report this Comment On December 15, 2013, at 9:38 AM, prginww wrote:

    In democratic institution everybody has equal rights then why somebody who is working overtime and has more income and uses same amounts of general resources and has to pay more tax?

  • Report this Comment On December 17, 2014, at 6:45 PM, prginww wrote:

    Great article. Thanks for the info, it’s easy to understand. BTW, if anyone needs to fill out an ERM -14 Form, I found a blank form here

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