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2008 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 2008:

Individual Tax Rate Schedules for 2008
Filing Status Taxable Income ($) Marginal Tax Bracket Rate (%)
Married Filing Jointly 0 to 16,050 10
16,051 to 65,100 15
65,101 to 131,450 25
131,451 to 200,300 28
200,301 to 357,700 33
357,701 and higher 35
Head of Household 0 to 11,450 10
11,451 to 43,650 15
43,651 to 112,650 25
112,651 to 182,400 28
182,401 to 357,700 33
357,701 and higher 35
Single 0 to 8,025 10
8,026 to 32,550 15
32,551 to 78,850 25
78,851 to 164,550 28
164,551 to 357,700 33
357,701 and higher 35
Married Filing Separately 0 to 8,025 10
8,026 to 32,550 15
32,551 to 65,725 25
65,726 to 100,150 28
100,151 to 178,850 33
178,851 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.%.