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Year 2010 Income Bracket & Marginal Tax Rate

Marginal Tax Rate


Married Filing Jointly or Qualified Widow (er)

Married Filing Separately

Head of Household


$0 – $8,375

$0 – $16,750

$0 – $8,375

$0 – $11,950


$8,376 – $34,000

$16,751 – $68,000

$8,376 – $34,000

$11,951 – $45,550


$34,001 – $82,400

$68,001 – $137,300

$34,001 – $68,650

$45,551 – $117,650


$82,401 – $171,850

$137,301 – $209,250

$68,651 – $104,625

$117,651 – $190,550


$171,851 – $373,650

$209,251 – $373,650

$104,626 – $186,825

$190,551 - $373,650






Can I take a tax deduction for a Hobby loss on my tax return?

The IRS defines a hobby as an activity that you pursue without expecting to make a taxable profit - such as coin or stamp collecting, as opposed to setting up your own dealership.

The IRS assumes you're trying to make a taxable profit if you actually made money in at least three tax years of the past five tax years, including the current tax year. For horse breeding, racing, training, or showing the test is taxable profits in two (2) tax years of seven (7) consecutive tax years. However, regardless of whether or not you meet the above taxable profit tests, the IRS may still try to rebut the presumption and disallow your tax deductions on your tax return.

If, in the early tax years, the IRS tries to disallow your tax loss on your tax return you may make a tax election on Form 5213 to postpone the determination of whether the above tax tests apply. You must make the tax election and file the form within three (3) tax years of the due date of the first tax return for the activity. The postponement is until the end of the fourth tax year (sixth tax year for horses) following the first tax year of the activity. By filing the form you agree to waive all statute of limitations issues for that activity. You can file Form 5213 within sixty (60) days after receiving a tax notice from the IRS disallowing your tax deductions on your tax return so long as you are still within the three (3) tax years described above.

If you lose money pursuing a hobby, you cannot deduct your hobby loss from your other income on your tax return, but you can deduct your expenses up to the amount of your hobby income on your tax return. A hobby loss is a miscellaneous tax deduction on your tax return, though, and limited by the 2% of AGI threshold.

A profitable sale of your hobby collection, such as stamps or coins, is taxable as a capital gain on your tax return. A loss upon the sale is not tax deductible on your tax return.