It’s hard to believe 2015 is already coming to a close. The IRS just reminded us of that by issuing the 2016 inflation adjustments and tax tables for individuals, estates and trusts. The release was made on October 21, 2015 in Revenue Procedure 2015-53.
These inflation-adjusted amounts generally apply to tax years beginning in 2016 and include more than 50 tax provisions, including tax rate schedules and other tax changes. Following are a few items of interest to most taxpayers:
- The personal exemption for tax year 2016 rises $50 to $4,050, up from the 2015 exemption of $4,000. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly). It phases out completely at $381,900 ($433,800 for married couples filing jointly.)
- For tax year 2016, the 39.6% tax rate affects single taxpayers whose income exceeds $415,050 ($466,950 for married taxpayers filing jointly), up from $413,200 and $464,850, respectively.
- The standard deduction for heads of household rises to $9,300 for tax year 2016, up from $9,250, for tax year 2015. The other standard deduction amounts for 2016 remain as they were for 2015: $6,300 for singles and married persons filing separate returns and $12,600 for married couples filing jointly.
- For tax year 2016, the monthly limitation for the qualified transportation fringe benefit remains at $130 for transportation, but rises to $255 for qualified parking, up from $250 for tax year 2015.
- Estates of decedents who die during 2016 have a basic exclusion amount of $5,450,000, up from a total of $5,430,000 for estates of decedents who died in 2015.
The complete listing provided in Revenue Procedure 2015-53 can be accessed by visiting the IRS website at https://www.irs.gov/pub/irs-drop/rp-15-53.pdf.