The IRS recently announced the 2015 annual inflation adjustments, which will impact tax rate schedules and deduction levels. The most notable tax rate changes include the rate of 39.6 percent, which affects singles with an income of more than $413,200 and married taxpayers who file jointly and have income of at least $464,850. The IRS adjustments mark an increase from $406,750 and $457,600 respectively.
Standard deduction rates also increased. The 2015 rates are $6,300 for single taxpayers, $12,600 for married couples filing separately, $12,400 for married persons who will file a joint return, and $9,250 for heads of household. For individuals, the limitation on itemized deductions to be claimed on 2015 tax returns begins with incomes that equal or exceed $258,250. For married couples that file jointly, the limit begins with incomes of $309,900.
Exemptions will also be affected by the change. Although the personal exemption has been increased to $4,000 from $3,950 in 2014, a phase-out that begins with adjusted gross incomes of $258,250 for single taxpayers and $309,900 for married couples filing jointly will apply. The exemption phases out completely at $380,750 for singles and $432,400 for married couples filing jointly. The Alternative Minimum Tax for 2015 is $53,600 for singles and $83,400 for married persons who will file jointly.
The Earned Income Credit amount for taxpayers who will file jointly and have a minimum of three qualifying children has been increased from $6,143 in 2014 to $6,242 in the 2015 tax year. The IRS has provided a table in the revenue procedure to indicate maximum credit amounts for other categories in addition to income thresholds and phaseouts.
Whether filing individually or jointly, most taxpayers will find it helpful to consult a knowledgeable CPA for tax planning and tax return preparation. CPAs must always remain abreast to the latest IRS adjustments; therefore, they are qualified to provide the most helpful, up-to-date information to their clients. Gary Kaplan is available to assist taxpayers in New York, Maryland, Washington, D.C., Florida, and Utah with all their planning and tax preparation needs. More information is available at gkaplancpa.com
