As the 2009 tax year draws to a close, figures for 2010 tax brackets are coming to light. With low inflation and a slow economy, there are only marginal changes from the 2009 tax brackets. Consumer Price Index (CPI) data released recently by the Bureau of Labor Statistics (BLS), used by the IRS in calculating 2010 tax parameters, has been reviewed by many tax experts and organizations with consensus estimates showing that the personal exemption amount, standard deduction, federal income-tax brackets and many other figures will barely change next year, Here are some notable changes reported which are important to factor into your 2010/2011 tax planning and setting of 2010 employer withholdings:

- The personal exemption ($3,650) will remain unchanged for this year, along with the $5,700/$11,400 standard deduction for most taxpayers (except for a $50 increase for heads of household filers). This marks the first time that no increase in these parameters has taken place.

- Due to low levels of inflation over the last year (0.2%), most workers won't receive as large an increase in take-home pay in January 2010 as they did last January given the automatic inflation adjustments (assuming pre-tax wages stay the same).

- The annual gift-tax exclusion of $13,000 also won't change. This means a person can give away as much as $13,000 each to anyone he or she wishes without any tax considerations. Many wealthy people take advantage of this provision each year as part of their estate-planning strategy. One can give away even more than the exclusion amount by paying someone else's tuition or medical bills, but must make those payments directly to the medical or educational provider.

Indexing brackets lowers tax bills when there is inflation by including more of one's income in a lower bracket, such as the 15% rather than the 25% bracket. The lack of change for 2010 creates a level playing field for taxpayers from all brackets, but those with high incomes actually stand to benefit in 2010 because "stealth taxes," those that don't involve changing tax rates, are being phased out. Among them are limits on itemized deductions and personal exemption amounts.

The August CPI figure is a key statistic used by the IRS in calculating important tax parameters for tax year 2010, which are officially released in late fall. I will provide an update when the final figures are available - so ensure you subscribe (free) via Email or RSS to get the latest updates. (Click on Graphic to Expand)

Taxpayer savings from inflation adjustments can vary tremendously, depending on an individual's circumstances. A married couple filing jointly with total taxable income of $100,000 should pay $12.50 less in income taxes in 2010 than on the same income for 2009, compared with a $312.50 savings between 2008 and 2009. A single filer with taxable income of $50,000 should owe $6.25 less next year due to the adjustments, compared to a $156.25 savings with significantly higher inflation between 2008 and 2009.

Sources: WSJ ,The Tax Foundation

Related Posts:
~ Simplifying 401K and IRA Rules Around Automatic Enrollment, Unused Vacation Contributions and Rollover Payments
~ Can't afford to pay my taxes! What happens if I file late and can I get an extension
~ Updates & Taxes on the 2009-2010 Economic Stimulus Credits and Payments
~ Capital Gains and Losses : Tax Facts and Figures
~ Where to Invest $50,000 - Stocks, Gold or Real Estate