IRS Issues Inflation-Adjusted Tax Amounts for 2016 Tax Year
Standard deductions and the personal exemption will both increase slightly for the 2016 tax year according to the Revenue Procedure 2015 document released by the IRS October 21. Revised tax tables are shown below. Beginning in 2016, the allowable itemized deductions are $311,300 in the case of a joint return or a surviving spouse, $285,350 in the case of a head of household, $259,400 in the case of an individual who is not married and who is not a surviving spouse or head of household, $155,650 in the case of a married individual filing a separate return.
There will also be changes to the Hope Scholarship, American Opportunity and Lifetime Learning credits as well as to the Earned Income credit, Medical Savings Accounts and a whole host of other items. If you have questions about the credits and deductions you are entitled to take to lower your tax burden, give us a call.
| 2016 Tax Rate Tables | |
|---|---|
| Standard Deductions | |
| Married Individuals Filing Joint Returns and Surviving Spouses | $12,600 |
| Heads of Households | $9,300 |
| Unmarried Individuals (other than Surviving Spouses and Heads of Households) | $6,300 |
| Married Individuals Filing Separate Returns | $6,300 |
| Married Individuals Filing Joint Returns and Surviving Spouses | |
| If Taxable Income Is: | The Tax Is: |
| Not over $18,550 | 10% of the taxable income |
| Over $18,550 but not over $75,300 | $1,855 plus 15% of the excess over $18,550 |
| Over $75,300 but not over $151,900 |
$10,367.50 plus 25% of the excess over $75,300 |
| Over $151,900 but not over $231,450 | $29,517.50 plus 28% of the excess over $151,900 |
| Over $231,450 but not over $413,350 | $51,791.50 plus 33% of the excess over $231,450 |
| Over $413,350 but not over $466,950 | $111,818.50 plus 35% of the excess over $413,350 |
| Over $466,950 | $130,578.50 plus 39.6% of the excess over $466,950 |
| Heads of Households | |
| Not over $13,250 | 10% of the taxable income |
| Over $13,250 but not over $50,400 | $1,325 plus 15% of the excess over $13,250 |
| Over $50,400 but not over $130,150 | $6,897.50 plus 25% of the excess over $50,400 |
| Over $130,150 but not over $210,800 | $26,835 plus 28% of the excess over $130,150 |
| Over $210,800 but not over $413,350 | $49,417 plus 33% of the excess over $210,800 |
| Over $413,350 not over $441,000 | $116,258.50 plus 35% of the excess over $413,350 |
| Over $441,000 | $125,936 plus 39.6% of the excess over $441,000 |
| Unmarried Individuals | |
| Not over $9,275 | 10% of the taxable income |
| Over $9,275 but not over $37,650 | $927.50 plus 15% of the excess over $9,275 |
| Over $37,650 but not over $91,150 | $5,183.75 plus 25% of the excess over $37,650 |
| Over $91,150 but not over $190,150 | $18,558.75 plus 28% of the excess over $91,150 |
| Over $190,150 but not over $413,350 | $46,278.75 plus 33% of the excess over $190,150 |
| Over $413,350 not over $415,050 | $119,934.75 plus 35% of the excess over $413,350 |
| Over $415,050 | $120,529.75 plus 39.6% of the excess over $415,050 |
| Married Individuals Filing Separate Returns | |
| Not over $9,275 | 10% of the taxable income |
| Over $9,275 but not over $37,650 | $927.50 plus 15% of the excess over $9,275 |
| Over $37,650 but not over $75,950 | $5,183.75 plus 25% of the excess over $37,650 |
| Over $75,950 but not over $115,725 | $14,758.75 plus 28% of the excess over $75,950 |
| Over $115,725 but not over $206,675 | $25,895.75 plus 33% of the excess over $115,725 |
| Over $206,675 not over $233,475 | $55,909.25 plus 35% of the excess over $206,675 |
| Over $233,475 | $65,289.25 plus 39.6% of the excess over $233,475 |