6 Exciting Tax Benefit Increases for 2015

While thinking about your income taxes may not be inherently exciting, we surmise that once you read about these tax benefit increases that will be in effect for the 2015 tax year, you just might be able to tolerate the idea of those forms and figures after all.

Here is a look at some of the most interesting tax benefits that are set take effect for the 2015 tax year (or, in other words, for the tax returns you’ll be preparing next year).  Reference: IR-2014-104, Oct. 30, 2014

• Increased Standard Deduction: The new standard deduction for singles and married persons filing separate returns is $6,300, while for married couples filing jointly the number rises to $12,600 – up from $6,200 and $12,400, respectively. Standard deduction for head of household is also up from $9,100 to $9,250.

• Increased Tax Threshold for High-Income Earners: The 39.6% tax rate affects singles with an income exceeding $413,200 and married taxpayers filing jointly whose income exceeds $464,850, which is up from $406,750 and $457,600, respectively.

• Increased Personal Exemptions: Up from $3,950 in 2014, the new personal exemption for tax year 2015 is $4,000. Taxpayers should be aware that a phase-out rule exists starting at adjusted gross incomes of $258,250 for singles, or $309,900 for married couples filing jointly.

• Increased Earned Income Credit: For the 2015 tax year, the maximum EIC amount is $6,242 for taxpayers filing jointly who have 3 or more qualifying children. This is up from $6,143 in 2014.

• Increased Estate Tax Deduction: The income tax code has changed for 2015 regarding estate tax deductions. Up from $5.34 million in 2014, the new $5.43 million limit means that anything above this new limit will be taxed by the IRS. For couples, the limit simply doubled to $10.8 million.

• Increased Maximum Health Care Credit for Small Business: For the 2015 tax year, the maximum credit under the small business health care tax credit is phased out based on the employer’s total number of employees and average annual wages in excess of $25,800, up from $25,400 in 2014.

We understand that these particular tax benefit increases may not apply to every individual; therefore, we encourage you to talk with your accountant and tax preparer to discuss how you can prepare for the most impactful modifications throughout the year. You can also visit the IRS website for more details on revisions for tax year 2015.