More than 50 tax provisions, including the tax rate schedules, and other tax changes are adjusted for inflation in 2016. Let’s take a look at the ones most likely to affect taxpayers like you.<\/p>\n
The tax rate of 39.6 percent affects singles whose income exceeds $415,050 ($466,950 for married taxpayers filing a joint return), up from $413,200 and $464,850, respectively. The other marginal rates–10, 15, 25, 28, 33 and 35 percent–and related income tax thresholds–are found at IRS.gov.<\/p>\n
The standard deduction remains at $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 $9,300, up from $9,250.<\/p>\n
The limitation for itemized deductions to be claimed on tax year 2016 returns of individuals begins with incomes of $259,400 or more ($311,300 for married couples filing jointly).<\/p>\n
The personal exemption for tax year 2016 rises to $4,050, up from the 2015 exemption of $4,000. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly). It phases out completely at $381,900 ($433,800 for married couples filing jointly.)<\/p>\n
The Alternative Minimum Tax exemption amount for tax year 2016 is $53,900 and begins to phase out at $119,700 ($83,800, for married couples filing jointly for whom the exemption begins to phase out at $159,700). The 2015 exemption amount was $53,600 ($83,400 for married couples filing jointly). For tax year 2016, the 28 percent tax rate applies to taxpayers with taxable incomes above $186,300 ($93,150 for married individuals filing separately).<\/p>\n
For 2016, the maximum Earned Income Credit amount is $6,269 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,242 for tax year 2015. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phase-outs.<\/p>\n
Estates of decedents who die during 2016 have a basic exclusion amount of $5,450,000, up from a total of $5,430,000 for estates of decedents who died in 2015.<\/p>\n
For 2016, the exclusion from tax on a gift to a spouse who is not a U.S. citizen is $148,000, up from $147,000 for 2015.<\/p>\n
For 2016, the foreign earned income exclusion rises to $101,300, up from $100,800 in 2015.<\/p>\n
The annual exclusion for gifts remains at $14,000 for 2016.<\/p>\n
The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) remains at $2,550.<\/p>\n
Under the 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 $25,900 for tax year 2016, up from $25,800 for 2015.<\/p>\n
Need help with tax planning in 2016? Help is just a phone call away!<\/p>\n","protected":false},"excerpt":{"rendered":"
More than 50 tax provisions, including the tax rate schedules, and other tax changes are adjusted for inflation in 2016. Let’s take a look at the ones most likely to affect taxpayers like you. The tax rate of 39.6 percent affects singles whose income exceeds $415,050 ($466,950 for married taxpayers filing a joint return), up […]<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-2825","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/posts\/2825","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/comments?post=2825"}],"version-history":[{"count":1,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/posts\/2825\/revisions"}],"predecessor-version":[{"id":2826,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/posts\/2825\/revisions\/2826"}],"wp:attachment":[{"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/media?parent=2825"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/categories?post=2825"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/tags?post=2825"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}