William Byrnes' Tax, Wealth, and Risk Intelligence

The tax items for tax year 2015 of greatest interest to most taxpayers include the following dollar amounts –

• The tax rate of 39.6 percent 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 other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds are described in the revenue procedure.
• 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, for tax year 2014. The standard deduction for heads of household rises to $9,250, up from $9,100.
• The limitation for itemized deductions to be claimed on tax year 2015 returns of individuals begins with incomes of $258,250 or more ($309,900 for married couples filing jointly).
• The personal exemption for tax year 2015 rises to $4,000, up from the 2014 exemption of $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 for tax year 2015 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 3 or more qualifying children, up from a total of $6,143 for tax year 2014. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phaseouts.
• Estates of decedents who die during 2015 have a basic exclusion amount of $5,430,000, up from a total of $5,340,000 for estates of decedents who died in 2014.
• For 2015, the exclusion from tax on a gift to a spouse who is not a U.S. citizen is $147,000, up from $145,000 for 2014.
• For 2015, the foreign earned income exclusion breaks the six-figure mark, rising to $100,800, up from $99,200 for 2014.
• 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 (FSA) rises to $2,550, up $50 dollars from the amount for 2014.
• 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 for tax year 2015, up from $25,400 for 2014.

.01 Tax Rate Tables. For taxable years beginning in 2015, the tax rate tables under § 1 are as follows:

TABLE 1 – Section 1(a) – Married Individuals Filing Joint Returns and Surviving Spouses

If Taxable Income Is & The Tax Is:

1. Not over $18,450 10% of the taxable income
2. Over $18,450 but $1,845 not over $74,900 plus 15% of the excess over $18,450
3. Over $74,900 but $10,312.50 not over $151,200 plus 25% of the excess over $74,900
4. Over $151,200 but $29,387.50 not over $230,450 plus 28% of the excess over $151,200
5. Over $230,450 but $51,577.50 not over $411,500 plus 33% of the excess over $230,450
6. Over $411,500 but $111,324 not over $464,850 plus 35% of the excess over $411,500
7. Over $464,850 $129,996.50 plus 39.6% of the excess over $464,850

TABLE 3 – Section 1(c) – Unmarried Individuals (other than Surviving Spouses and Heads of Households)

If Taxable Income Is & The Tax Is:

1. Not over $9,225 10% of the taxable income
2. Over $9,225 but $922.50 not over $37,450 plus 15% of the excess over $9,225
3. Over $37,450 but $5,156.25 not over $90,750 plus 25% of the excess over $37,450
4. Over $90,750 but $18,481.25 not over $189,300 plus 28% of the excess over $90,750
5. Over $189,300 but $46,075.25 not over $411,500 plus 33% of the excess over $189,300
6. Over $411,500 $119,401.25 not over $413,200 plus 35% of the excess over $411,500
7. Over $413,200 $119,996.25 plus 39.6% of the excess over $413,200