2003 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 2003:

Individual Tax Rate Schedules for 2003 (Revised May 6, 2003)
Filing Status Taxable Income ($) Effective Rate (%)
Married Filing Jointly 0 to 14,000 10
14,001 to 56,800 15
56,801 to 114,650 25
114,651 to 174,700 28
174,701 to 311,950 33
311,951 and higher 35
Head of Household 0 to 10,000 10
10,001 to 38,050 15
38,051 to 98,250 25
98,251 to 159,100 28
159,101 to 311,950 33
311,951 and higher 35
Single 0 to 7,000 10
7,001 to 28,400 15
28,401 to 68,800 25
68,801 to 143,500 28
143,501 to 311,950 33
311,951 and higher 35
Married Filing Separately 0 to 7,000 10
7,001 to 28,400 15
28,401 to 57,325 25
57,326 to 87,350 28
87,351 to 155,975 33
155,976 and higher 35
Tax-Exempt and Taxable Yields Compared*
Tax-Exempt Yield (%) Taxable Equivalent Yield (%) for Tax Rate of:
15% Tax Bracket 25% Tax Bracket 28% Tax Bracket 33% Tax Bracket 35% Tax Bracket
2.0 2.35 2.66 2.77 2.98 3.08
2.5 2.94 3.33 3.47 3.73 3.85
3.0 3.53 4.00 4.17 4.48 4.62
3.5 4.18 4.66 4.86 5.22 5.38
4.0 4.71 5.33 5.55 5.97 6.15
4.5 5.29 6.00 6.25 6.71 6.92
5.0 5.88 6.66 6.94 7.46 7.69
5.5 6.47 7.33 7.63 8.20 8.46
6.0 7.06 8.00 8.33 8.95 9.23
6.5 7.65 8.66 9.02 9.70 10.00
7.0 8.24 9.33 9.72 10.44 10.77
*Federal income tax rates only. Does not include state income tax.

If you cannot find a specific rate on the chart you can compare yields by using the following formula:

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

Example: Assume you are in the 25% tax bracket, and have an account with a 4.5% tax-free yield. To get the equivalent taxable yield, divide 4.5% by 75% (100% - 25%). The taxable yield is 6.%.

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 10% and 15% tax brackets 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