Each year about this time, the IRS releases updated figures for the new year to adjust for inflation. Here are the tax rates that have been announced in Revenue Procedure 2015-53 – stay tuned for a future announcement on employee benefit plans and mileage rates for 2016 once they’re released.
Tax Rates – The 39.6% tax rate will apply to single taxpayers with income exceeding $415,050 and married taxpayers filing jointly whose income exceeds $466,950. Information about the other marginal rates of 10, 15, 25, 28, 33, and 35% can be found in the Revenue Procedure link above.
Standard Deduction – The standard deduction level for single and married taxpayers remains the same for 2016 at $6,300 and $12,600 respectively. The standard deduction for a head of household filer will rise to $9,300 for 2016.
Personal Exemption – 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).
Estate Planning – The basic exclusion amount for individuals who die in 2016 will be $5,450,000, up from the amount of $5,430,000 for those who die in 2015.
Late Filing Penalty – Partnership Return – $195 per partner per return
Late Filing Penalty – S-Corporation Return – $195 per stockholder per return