While official numbers for 2016 are not yet released by the Internal Revenue Service (IRS), many figures are formulas set within the Internal Revenue Code (IRC) or are based on the Consumer Price Index (CPI) published by the Department of Labor. Using the release of recent CPI figures, a number of reference sources are projecting key figures for 2016. While many are unchanged from 2015 they are noted here for your planning purposes.
Tax Brackets: While the actual income brackets for tax rates are not set for 2016, the rate of inflation that impacts the income levels for each tax rate is anticipated to raise the income brackets by approximately 0.4 – 0.5%.
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 (kiddie tax) |
1,050
|
1,050
|
65 or Blind: Married |
Add $1,250
|
Add $1,250
|
Single |
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 Limit |
$5,500
|
$5,500
|
Caution: Remember, these are early figures using the recently announced Consumer Price Index. Official numbers are released by the IRS later in the year.