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.