The IRS just issued Rev Proc 2015-53 which adjusts various items for inflation for 2016.
INDIVIDUAL TAX RATES
- The individual income tax rate of 39.6% now applies for single taxpayers with income above $415,050 (up from $413,200) and $466,950 for married taxpayers filing a joint return (increased from $464,850).
- The standard deduction for heads of households is increased to $9,300 (increased from $9,250). The other standard deduction amounts for 2016 are unchanged at 6,300 for singles and married persons filing separate returns, and $12,600 for married couples filing jointly.
- The limitation for itemized deductions in tax year 2016 begins with incomes of $259,400 or more ($311,300 for married couples filing jointly).
- The personal exemption amount moves from $4,000 in 2015 to $4,050 in 2016. The exemption is subject to a phase-out that begins in 2016 with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly) and phases out completely at $381,900 ($433,800 for married couples filing jointly.)
- The alternative minimum tax (AMT) exemption amount for tax year 2016 is $53,900 ($83,800 for married couples filing jointly). The 2015 exemption amount was $53,600 ($83,400 for married couples filing jointly).
ESTATE AND GIFT RATES
- Estates of decedents who die during 2016 have an exclusion amount of $5,450,000 (increased from $5,430,000 in 2015).
- The annual exclusion for gifts remains at $14,000 for 2016.