IRS Announces Various Tax Benefit Increases for 2015

For tax year 2015, the IRS recently announced annual inflation adjustments for many tax provisions, including the tax rate schedules, and other tax changes. IRS Revenue Procedure 2014-61 provides details about these annual adjustments.

The tax items for tax year 2015 of greatest interest to most taxpayers include the following dollar amounts:

Tax Item

2015

2014

Highest tax rate of 39.6 percent Affects singles whose income exceeds $413,200 ($464,850 for married taxpayers filing a joint return) Affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return)
Standard deduction $6,300 for singles and married persons filing separate returns and $12,600 for married couples filing jointly. The standard deduction for heads of household rises to $9,250 $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly. The standard deduction for heads of household rises to $9,100.
Limitation for itemized deductions Begins with incomes of $258,250 or more ($309,900 for married couples filing jointly).  Begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).
Personal exemption $4,000 $3,950
Alternative minimum tax exemption $53,600 ($83,400, for married couples filing jointly) $52,800 ($82,100 for married couples filing jointly)
Maximum Earned Income Credit $6,242 for taxpayers filing jointly who have 3 or more qualifying children. $6,143 for taxpayers filing jointly who have 3 or more qualifying children.
Estates Decedents who die during 2015 have a basic exclusion amount of $5,430,000. Decedents who die during 2014 have a basic exclusion amount of $5,340,000.
Gifts to non-U.S. citizen spouse The exclusion from tax on a gift to a spouse who is not a U.S. citizen is $147,000. The exclusion from tax on a gift to a spouse who is not a U.S. citizen is $145,000.
Foreign earned income exclusion $100,800 $99,200
Annual exclusion for gifts $14,000 $14,000
Kiddie Tax The amount used to reduce the net unearned income reported on a child’s return that is subject to the Kiddie Tax is $1,050 The amount used to reduce the net unearned income reported on a child’s return that is subject to the Kiddie Tax is $1,000.
Flexible spending arrangements (FSAs) The annual dollar limit on employee contributions to employer-sponsored healthcare FSAs is $2,550. The annual dollar limit on employee contributions to employer-sponsored healthcare FSAs is $2,500.
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. 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 $25,400 for tax year 2014.

 

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