I just went through this as I was doing my taxes. Look at your taxable income ('adjusted gross income = income - exemptions and deductions). If you can plan ahead it's great to keep your taxable income under 29,050 (single). For every dollar after that, the rate jumps to 25%. Note that the rates flatten out after that big 10% jump.
Qualified corporate dividends and long term capital gains are taxed at:
15% for taxpayers in the 25% bracket and up.
5% for the taxpayers in the 10% and 15% brackets.
I try to optimize my bond allocation so that my taxible bonds and interest don't push me into a high bracket. Then, the munis kick in (since the spread only works in my favor if I'm in a higher 'bracket').
Bush has been very very good to me.
Single:
Rates Taxable Income up to
10% $7,150.00
15% $29,050.00
25% $70,350.00
28% $146,750.00
33% $319,101.00
35%
Married Joint Return:
Rates Taxable Income up to
10% $14,300
15% $58,100
25% $117,250
28% $178,650
33% $319,100
35%
Head of Household
Rates Taxable Income up to
10% $10,200
15% $38,900
25% $1000,500
28% $162,700
33% $319,100
35%