We have chosen to wait until the official numbers have been released. Here are the official 2016 amounts.
Revenue Procedure 2015-53 contains most of these inflation adjusted amounts for 2016. A copy of the Rev. Proc. can be found at www.irs.gov/pub/ by clicking on irs‑drop and clicking on rp-15-53.
- Tax Rates - Ceilings
10% bracket tops at $9,275
15% tops at $37,650
25% tops at $91,150
28% tops at $190,150
33% tops at $413,350
35% tops at $415,050
39.6% applies to anything over $415,050
MFJ
10% bracket tops at $18,550
15% tops at $75,300
25% tops at $151,900
28% tops at $231,450
33% tops at $413,350
35% tops at $466,950
39.6% applies to anything over $466,950
Head of Household
10% bracket tops at $13,250
15% tops at $50,400
25% tops at $130,150
28% tops at $210,800
33% tops at $413,350
35% tops at $441,000
39.6% applies to anything over $441,000
MFS
10% bracket tops at $9,275
15% tops at $37,650
25% tops at $75,950
28% tops at $115,725
33% tops at $206,675
35% tops at $233,475
39.6% applies to anything over $233,475
Estates & Trusts
15% bracket tops at $2,550
25% tops at $5,950
28% at $9,050
33% at $12,400
39.6% applies to anything over $12,400
- Exemption amount is $4,050.
- Standard deduction amounts are: MFJ-$12,600, Single & MFS-$6,300, HH-$9,300, Additional amounts for aged/blind-$1,550 for unmarried and $1,250 for married status.
- Exemption and itemized deduction phase outs begin for MFJ at $311,300, HH at $285,350, S/HH at $259,400, and MFS at $155,650.
- Kiddie Tax
Standard Deduction is $1,050, the next $1,050 is taxed at child’s rate, and the excess is taxed at parent’s rate. AMT Exemption amount is the child’s earned income plus $7,400.
- AMT – The exemption amounts are:
MFJ/QW = $83,800
S/HH = $53,900
MFS = $41,900
Estates/trusts = $23,900
The excess taxable income level (where the 28% AMT rate applies) is:
MFJ/QW/S/HH = $186,300
MFS = $93,150
- Adoption Credit - $13,460 is the maximum for the credit or assistance amounts. The phase out starts at $201,920 and is completely phased out at $241,920.
- Child Tax Credit – refundable portion uses an income base of $3,000.
- Education Credits. The phaseout for the American Opportunity Credit starts at $80,000 ($160,000 for MFJ). The phaseout for the Lifetime Learning Credit $55,000 ($111,000 for MFJ)
- EIC maximum AGI/earned income for MFJ is $44,846 for one child, $50,198 for two children, $53,505 for three or more children, and $20,430 for no children. The EIC maximum AGI/earned income for other taxpayers is $39,296 for one child, $44,648 for two children, $47,955 for three or more children, and $14,880 for no children. Excessive investment income level for EIC is $3,400.
- Transportation Fringe maximum exclusion for monthly parking is $255/month and for commuter highway vehicle and transit passes is $130.
- Savings Bonds for Education phase out level starts at $116,300 for MFJ and $77,550 for other filing statuses. This is completely phased out at $146,300 for MFJ and $92,550 for other filing statuses.
- §179 election maximum is $25,000.
- Foreign Earned Income exclusion is $101,300.
- Long-term care premiums are limited to:
Age
40 or less-------$390
>40, but not >50------$730
>50, but not >60------$1,460
>60, but not >70------$3,900
>70------$4,870
- Long-term care contract benefit amount is $340 per day.
- Student loan interest maximum is $2,500, with a phase out starting at $65,000 ($130,000 for MFJ). This is completely phased out at $80,000 ($160,000 for MFJ)
- Annual gift tax exclusion is $14,000, while the limit on gifts to noncitizen spouses is at $148,000.
- Attorney Fee Awards are limited to $200 per hour.
- MSA
Self-only coverage annual deductible is not less than $2,250 nor more than $3,350, with out-of-pocket limits not in excess of $4,450.
Family coverage annual deductible is not less than $4,450 nor more than $6,700, with out-of-pocket limits not in excess of $8,150.
- Cafeteria Plan – The dollar limitation for §125 health FSAs remains at $2,550.
- Nanny Tax – The wage threshold for the Nanny tax for 2016 is $2,000.
- Small Business Health Insurance Credit – The dollar amount for purposes of limiting this credit is $25,900.
- Exclusion amount for Estate/Gift tax is $5,450,000.
Many penalties are now indexed every five years. 2016 is the year of the first indexed amounts. Three common penalties are:
- Penalty for failure to file a Partnership or S corporation return remains $195 per month per Schedule K-1.
- Penalty for failure to file correct Forms 1099 is $260.
- Penalty for failing to exercise due diligence in connection with EIC claims is $510.
This text has been shared with you courtesy of: David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (fax 920-496-9111).
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