More than 40 tax provisions will change because of inflation rates in 2015. Here is a brief summary of the changes and how they may affect you.
Income taxes: The ordinary income tax rates are the same this year: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent and 39.6 percent. The income limits, however, for all brackets and all filers, will be adjusted for inflation. Please consult with your financial advisor to determine how these new income tax brackets affect you.
Larger standard deduction amounts: Most taxpayers claim the standard deduction. In 2015, that amount, which is different for each filing status, also will increase. The standard deduction rises to $6,300 for singles and married persons filing separate returns, and $12,600 for married couples filing jointly. It increases to $9,250 for heads of household.
Personal exemptions: In 2015, personal exemptions increase to $4,000. However, the exemption is subject to a phaseout that begins with individuals with adjusted gross incomes of $258,250 or more, and for married couples filing jointly of $309,900 or more.
Itemized deductions: Itemized deductions, including charitable deductions, are reduced for individuals earning $258,250 or more and for married couples filing jointly earning $309,900 or more. This does not apply to deductions for medical expenses, investment interest, casualty and theft losses, and gambling losses.
Estate, gift and generation-skipping taxes: In 2015, the basic exclusion amount for estate, gift and generation-skipping taxes is now $5,430,000. The top estate and gift tax rate is 40 percent. The annual gift tax exclusion—the amount you can give to anyone gift tax–free each year—is $14,000 ($28,000 for married couples).
Health care flexible spending arrangements: The annual dollar limit on employee contributions to employer-sponsored health care flexible spending arrangements increases to $2,550.
Contact Your Tax Advisor Today
Consult your tax advisor to determine how these changes could impact your financial situation.
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The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.