IRS Announces Various Tax Benefit Increases for 2015
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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. |
