2001 Marginal Tax Brackets

Your marginal tax bracket determines how much of the earnings from savings and investments you get to keep after taxes. Below are the four individual tax rate schedules for 2001:

Individual Tax Rate Schedules for 2001
  Taxable Income ($) Effective Rate (%)
Married Filing Jointly 0 to 45,200 15
45,201 to 109,250 27.5
109,251 to 166,450 30.5
166,451 to 297,300 35.5
More than 297,300 39.1
Head of Household 0 to 36,250 15
36,251 to 93,600 27.5
93,601 to 151,600 30.5
151,601 to 297,300 35.5
More than 297,300 39.1
Single 0 to 27,050 15
27,051 to 65,550 27.5
65,551 to 136,750 30.5
136,751 to 297,300 35.5
More than 297,300 39.1
Married Filing Separately 0 to 22,600 15
22,601 to 54,625 27.5
54,626 to 83,225 30.5
83,226 to 148,650 35.5
More than 148,650 39.1
NOTE: Since 1/1/93, higher 36% and 39.6% marginal tax brackets are also in effect for upper income taxpayers with incomes exceeding the upper limit of the 31% rate.
Tax-Exempt and Taxable Yields Compared*
Tax-Exempt Yield (%) Taxable Equivalent Yield (%) for Tax Rate of:
15% Tax Bracket 28% Tax Bracket 31% Tax Bracket
2.0 2.35 2.77 2.90
2.5 2.94 3.47 3.62
3.0 3.53 4.17 4.35
3.5 4.18 4.86 5.07
4.0 4.71 5.55 5.80
4.5 5.29 6.25 6.52
5.0 5.88 6.94 7.25
5.5 6.47 7.64 7.97
6.0 7.06 8.33 8.70
6.5 7.65 9.03 9.42
7.0 8.24 9.72 10.14
7.5 8.82 10.42 10.87
8.0 9.41 11.11 11.59
*Federal income tax rates only. Does not include state income tax.

If you cannot find a specific rate on the chart, you can compare tax-exempt and taxable yields by using the following formula:

Taxable equivalent yield = tax-free yield divided by (100% - marginal tax bracket %)

EXAMPLE: Assume you are in the 28% tax bracket, and have an investment with a 6.5% tax-free yield. To get the equivalent taxable yield, divide 6.5% by 72% (100% - 28%). The taxable yield is 9.03%.

Once you know how to calculate tax equivalent yields, it's time to go shopping and compare rates of return offered on various investment products. Next, determine which will pay a higher after-tax rate.

Generally speaking, people in the 15% tax bracket earn more after taxes with taxable saving and investment products. Those in higher tax brackets, usually do better with tax-exempts.


  1. Rutgers
  2. Executive Dean of Agriculture and Natural Resources
  3. School of Environmental and Biological Sciences