The Internal Revenue Service announced on 30th October, 2014 that there was an annual inflation in the United States of America and they made more than 40 adjustments on the tax provisions. The following tax changes have been outlined on the Revenue Procedure 2014-61. If you unsure how to file your taxes with these new changes, consider using a tax program like TaxAct 2014.
According to the Internal Revenue Service, 39.6% of the new tax rate affects unmarried individuals whose income is more than $413,200 as well as married couples whose income exceeds $413,200. In addition to this, the standard deduction for the unmarried will rise to $6,300 while for the married couples whose returns are not the same will rise to $12,600. On the other hand, standard deduction for married couples who fill the same returns will have their standard deduction rise from $6,200 to $12,400. On the same note, each household head will have his/her standard deduction increased from $9.250 to $9,100.
When it comes to personal exemption, as compared to $3,950 that was for the year 2014 it will be expected that in 2015 this will rise to $4,000. However, this will not be realized at once and it will be subjected to a number of phases starting from $258,250 for the unmarried and $309,900 for married couples who fill the same tax returns. The last phase will be $380,750 for the unmarried and $432,400 for couples who are married and they fill the same tax returns.
In terms of the Alternative Minimum Tax exemption, it will be $53,600 for the unmarried and $83,400 for married couples filling the same tax returns for the year 2015. This shows that there is a significant increase as compared to 2014 which was $52,800 for the unmarried and $82,100 for the married couples filling the same tax returns. The Alternative Maximum Earned Income Credit for the year 2015 will be $6,242 for tax payers with more than three children. This is a significant increase as compared to the year 2014 whereby the Alternative Maximum Earned Income Credit was $6,143 for taxpayers with more than three children.
Furthermore as compared to 2014 whereby Estates of Decedents who died were given a basic exclusion of $5,340,000 this basic exclusion for Estates of Decedents who will die in 2014 fiscal year will be increased to $5,430,000. In addition to this, the exclusion from tax on a gift for non-US spouse will be increased from $145,000 (2014) to $147,000 in the year 2015. In addition to this, $99,200 foreign earned income exclusion for the year 2014 will rise significantly in 2015 to $100,800. Furthermore, the maximum credit will be phased out depending on the number of full-time employees. Lastly, the annual dollar limit of employee contribution to Flexible Spending Arrangements will rise from $50 to $2,550 in 2015 fiscal year.