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Top Individual Tax Rates Historically
Federal income tax rates have varied widely since first introduced in 1913. Today, the top rate on ordinary income is 37%, significantly below the 90+% rate of the 1950s and early 1960s. But the lower rates don't tell the whole story. Bracket cutoffs have varied widely over the years and different types of income have differed in their taxation, making historical comparisons difficult. (Note: Tax rates after 2023 are extrapolated estimates.)
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Saving for Education With 529 Plans
This chart compares a $10,000 investment in a 529 education savings plan with the same investment made in a taxable account. It assumes an annual return of 6% and a 24% tax rate on the taxable account.
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Tax-Efficient Withdrawal
This example shows how waiting to withdraw tax-deferred assets after taxable assets can help make your retirement nest egg last longer. It assumes a $700,000 original account balance equally distributed in taxable and tax-deferred accounts. It also assumes a $32,000 withdrawal in the first year, that subsequent annual withdrawals will increase to keep pace with a 3% rate of inflation, that investments earn 6% annually, and that withdrawals are taxable at the 22% federal income tax rate.
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The Advantage of Tax Deferral
When taxes are deferred on an investment account and earnings are reinvested, the value of the assets in the account may grow faster than similar assets held in a taxable account. As this chart illustrates, the difference may be significant over time. Keep in mind, however, that you could still owe taxes on amounts withdrawn from the account. Also keep in mind that these taxes may be greater than the taxes that could have been paid on earnings in a non-deferred account.
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Estate and Gift Tax Exemptions and Rates
The 2001 Tax Act gradually lowered estate tax rates and increased exemptions, culminating in the repeal of the estate tax in 2010. Congress reinstated the estate tax for 2011 and 2012 and indexed the exemption amount to inflation. In 2013, Congress set new permanent estate tax rates and made the exemption amount, indexed for inflation, permanent. For estates of decedents dying and gifts made after December 31, 2017, and before January 1, 2026, the Tax Cuts and Jobs Act of 2017 doubled the base estate and gift tax exemption amount from $5 million to $10 million, indexed for inflation occurring after 2011.
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Federal Estate Taxes on a $20 Million Estate
This chart shows what the estimated federal estate tax would be on a estate with gross value of $20 million under the changing estate tax rates and exemptions between 2014 and 2024.
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Roth and Traditional IRA Basics
There are two types of IRAs: the traditional IRA and the Roth IRA. This table compares the rules and potential benefits of each.
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The Bite of Taxes and Inflation, Past 10 Years
This chart shows the potential effects of taxes & inflation on index returns that represent indicated asset classes for the 10-year period from April 1, 2015 to March 31, 2025. Inflation rose at a compound annual rate of 3.00% during this period.
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State Tax Deductions for 529 Contributions in the West, Latest Tax Year
This table shows the deductibility of contributions to 529 college savings plans in the West region for the latest tax year (as of January 2025). This should be used as a guideline only, since tax situations vary and the tax laws may change in your state. You should consult with a tax professional to verify that you qualify for a deduction.
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State Tax Deductions for 529 Contributions in the Southeast, Latest Tax Year
This table shows the deductibility of contributions to 529 college savings plans for states in the Southeast region for the latest tax year (as of January 2025). This should be used as a guideline only, since tax situations vary and the tax laws may change in your state. You should consult with a tax professional to verify that you qualify for a deduction.
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State Tax Deductions for 529 Contributions in the Northeast, Latest Tax Year
This table shows the deductibility of contributions to 529 college savings plans for states in the Northeast region for the latest tax year (as of January 2025). This should be used as a guideline only, since tax situations vary and the tax laws may change in your state. You should consult with a tax professional to verify that you qualify for a deduction.
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State Tax Deductions for 529 Contributions in the Midwest, Latest Tax Year
This table shows the deductibility of contributions to 529 college savings plans for states in the Midwest region for the latest tax year (as of January 2025). This should be used as a guideline only, since tax situations vary and the tax laws may change in your state. You should consult with a tax professional to verify that you qualify for a deduction.
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