The Internal Revenue Service has announced annual inflation adjustments for 2015 on more than 40 tax provisions, with highlights including:

  • The 39.6 percent tax rate affects singles whose income exceeds $413,200 ($464,850 for married taxpayers filing a joint return), up from $406,750 and $457,600, respectively.
  • The standard deduction rises to $6,300 for singles and married persons filing separate returns and $12,600 for married couples filing jointly, up from $6,200 and $12,400, respectively. The standard deduction for heads of household rises to $9,250, up from $9,100.
  • The limitation for itemized deductions of individuals begins with incomes of $258,250 or more ($309,900 for married couples filing jointly).
  • The personal exemption rises to $4,000, up from $3,950. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $258,250 ($309,900 for married couples filing jointly). It phases out completely at $380,750 ($432,400 for married couples filing jointly.)
  • The Alternative Minimum Tax exemption amount is $53,600 ($83,400, for married couples filing jointly). The 2014 exemption amount was $52,800 ($82,100 for married couples filing jointly).
  • The 2015 maximum Earned Income Credit amount is $6,242 for taxpayers filing jointly who have three or more qualifying children, up from a total of $6,143 for tax year 2014.
  • Estates of decedents who die during 2015 have a basic exclusion amount of $5,430,000, up from $5,340,000.
  • The exclusion from tax on a gift to a spouse who is not a U.S. citizen is $147,000, up from $145,000.
  • The foreign earned income exclusion breaks the six-figure mark, rising to $100,800, up from $99,200.
  • The annual exclusion for gifts remains at $14,000 for 2015.
  • The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements rises $50 to $2,550.
  • 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 $25,800, up from $25,400.

For tax assistance, contact Doeren Mayhew’s tax advisors in Michigan, Houston or Ft. Lauderdale.