Tax Benefits Increase Due to Inflation Adjustments
The IRS recently announced annual inflation adjustments for over 40 tax provisions for the 2015 tax year. With tax season on the horizon, take a look through some of the most relevant adjustments here to see how they’ll affect you:
- The standard deduction for singles and married filing separate rises to $6,300, and $12,600 for married couples filing jointly.
- Singles with an income over $413,200 and married filing joint over $464, 850 have a tax rate of 39.6%.
- The limitation for itemized deductions to be claimed on tax year 2015 returns of individuals begins with incomes of $258,250 or more ($309,900 for married couples filing jointly).
- The personal exemption goes up from $3,950 last season up to $4,000 for tax year 2015. This exemption is subject to a phase-out, starting with an income of $258,250 and $309,900 for married filing jointly.
- The annual exclusion for gifts will stay at $14,000.
- The 2015 maximum Earned Income Credit amount is $6,242 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,143 for tax year 2014. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phaseouts.
- Under the small business health care tax credit, the maximum credit is phased out based on the employer’s number of full-time equivalent employees in excess of 10 and the employer’s average annual wages in excess of $25,800 for tax year 2015, up from $25,400 for 2014.
Further information on inflation adjustments can be found here and, as always, Paragon Accountants is available to assist with any questions or concerns.