IRS Announces 2015 Annual Inflation Adjustments The IRS announced this week the 2015 annual inflation adjustments for various tax items. See below for a listing of the items of greatest interest to most taxpayers. • The 39.6% tax rate affects singles with income over $413,200 (up from $406,750), and for couples married filing jointly, income over $464,850 (up from $457,600). The other marginal rates – 10%, 15%, 25%, 28%, 33% and 35% – and the related income tax thresholds are described in the revenue procedure. • The standard deduction rises to $6,300 for singles and married persons filing separate returns and $12,600 for married couples filing jointly, up from $6,200 and $12,400, respectively, in tax year 2014. The standard deduction for heads of household rises to $9,250, up from $9,100. • 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 for tax year 2015 rises to $4,000, up from the 2014 exemption of $3,950. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $258,250 ($309,900 for married couples filing jointly). It phases out completely at $380,750 ($432,400 for married couples filing jointly.) • The Alternative Minimum Tax exemption amount for tax year 2015 is $53,600 ($83,400, for married couples filing jointly). The 2014 exemption amount was $52,800 ($82,100 for married couples filing jointly). • 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. • Estates of decedents who die during 2015 have a basic exclusion amount of $5,430,000, up from a total of $5,340,000 for estates of decedents who died in 2014. • For 2015, the exclusion from tax on a gift to a spouse who is not a U.S. citizen is $147,000, up from $145,000 in 2014. • For 2015, the foreign earned income exclusion breaks the six-figure mark, rising to $100,800, up from $99,200 in 2014. • The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) rises to $2,550 from $2,500 in 2014. • Under the small business health care tax credit, the maximum credit is phased out for 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 in 2014. Details on these inflation adjustments and others not listed in this release can be found in Revenue Procedure 2014-61, which will be published in Internal Revenue Bulletin 2014-47 on Nov. 17, 2013. The pension limitations for 2015 were announced on Oct. 23, 2014.
Posted on: Mon, 10 Nov 2014 16:53:20 +0000
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