Update Of Key 2016 Tax Figures

The following 2016 information is an update of the “Preview Of Some Key 2016 Tax Figures” article originally published last October (2015). The October 2015 publication was presented using estimated figures for 2016.

However, the IRS has recently released official 2016 tax figures. This being the case, what better time is there to start thinking about implementing a tax planning initiative focused on tax year 2016 activity? The following up-to-date figures will assist you with that initiative:

Tax Brackets For Taxable Years Beginning in 2016 (Per Rev. Proc. 2015-53):

TABLE 1 - 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                                    $1,855 plus 15% of
not over $75,300                                     the excess over $18,550

Over $75,300 but                                    $10,367.50 plus 25% of
not over $151,900                                   the excess over $75,300

Over $151,900 but                                  $29,517.50 plus 28% of
not over $231,450                                   the excess over $151,900

Over $231,450 but                                  $51,791.50 plus 33% of
not over $413,350                                   the excess over $231,450

Over $413,350 but                                  $111,818.50 plus 35% of
not over $466,950                                   the excess over $413,350

Over $466,950                                        $130,578.50 plus 39.6% of
                                                                the excess over $466,950

TABLE 2 – Heads of Households

If Taxable Income Is:                            The Tax Is:

Not over $13,250                                    10% of the taxable income

Over $13,250 but                                    $1,325 plus 15% of
not over $50,400                                     the excess over $13,250

Over $50,400 but                                    $6,897.50 plus 25% of
not over $130,150                                   the excess over $50,400

Over $130,150 but                                  $26,835 plus 28% of
not over $210,800                                   the excess over $130,150

Over $210,800 but                                  $49,417 plus 33% of
not over $413,350                                   the excess over $210,800

Over $413,350 but                                  $116,258.50 plus 35% of
not over $441,000                                   the excess over $413,350

Over $441,000                                        $125,936 plus 39.6% of
                                                                the excess over $441,000

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

If Taxable Income Is:                            The Tax Is:

Not over $9,275                                      10% of the taxable income

Over $9,275 but                                      $927.50 plus 15% of
not over $37,650                                     the excess over $9,275

Over $37,650 but                                    $5,183.75 plus 25% of
not over $91,150                                     the excess over $37,650

Over $91,150 but                                    $18,558.75 plus 28% of
not over $190,150                                   the excess over $91,150

Over $190,150 but                                  $46,278.75 plus 33% of
not over $413,350                                   the excess over $190,150

Over $413,350 but                                  $119,934.75 plus 35% of
not over $415,050                                   the excess over $413,350

Over $415,050                                        $120,529.75 plus 39.6% of
                                                                the excess over $415,050

TABLE 4 – Married Individuals Filing Separate Returns

If Taxable Income Is:                            The Tax Is:

Not over $9,275                                      10% of the taxable income

Over $9,275 but                                      $927.50 plus 15% of
not over $37,650                                     the excess over $9,275

Over $37,650 but                                    $5,183.75 plus 25% of
not over $75,950                                     the excess over $37,650

Over $75,950 but                                    $14,758.75 plus 28% of
not over $115,725                                   the excess over $75,950

Over $115,725 but                                  $25,895.75 plus 33% of
not over $206,675                                   the excess over $115,725

Over $206,675 but                                  $55,909.25 plus 35% of
not over $233,475                                   the excess over $206,675

Over $233,475                                        $65,289.25 plus 39.6% of
                                                                the excess over $233,475

TABLE 5 – Estates and Trusts

If Taxable Income Is:                            The Tax Is:

Not over $2,550                                      15% of the taxable income

Over $2,550 but                                      $382.50 plus 25% of
not over $5,950                                       the excess over $2,550

Over $5,950 but                                      $1,232.50 plus 28% of
not over $9,050                                       the excess over $5,950

Over $9,050 but                                      $2,100.50 plus 33% of
not over $12,400                                     the excess over $9,050

Over $12,400                                          $3,206 plus 39.6% of
                                                                the excess over $12,400

Personal Exemption:                            $4,050 in 2016 ($4,000 in 2015)

Standard Deductions:

Deduction                                                Tax Year 2016                  Tax Year 2015

Single                                                        $6,300                               $6,300
Head of Household                                   $9,300                               $9,250
Married Filing Joint                                   $12,600                             $12,600
Married Filing Separately                          $6,300                               $6,300

Dependents (claimed on                           $1,050                               $1,050
another’s return)

65 or Blind: Married or Single                   Add $1,250                        Add $1,250
                                                                  Add $1,550                        Add $1,550

Other Key figures:

Estate & Gift Tax Exclusion                      $5.45 Million                      $5.43 Million
Annual Gift Tax Exclusion                        $14,000                              $14,000
Roth and Traditional IRA Contribution      $5,550                               $5,500

LIMIT
Exclusion from tax on a gift to a spouse    $148,000                          $147,000
who is not a U.S. citizen

Foreign earned income exclusion              $101,300                          $100,800

Phase in limitation for itemized                  $311,300                          $309,900
deductions to be claimed on returns of
individuals - Married

The annual dollar limit on employee          $2,550                              $2,550
contributions to employer-sponsored
healthcare flexible spending
arrangements (FSA).

Refer to IRC.gov (various) and Rev. Proc. 2015-53 for additional details concerning 2016 rates.