The Internal Revenue Service (IRS) made the announcement on the annual inflation adjustment for the year 2015. This announcement includes multiple provisions such as tax tables, tax rate schedules and also cost of living regulation for some tax items. And these rules will be effective from the 1st January 2015. The new tax rules will not be applicable for the tax returns of 2015; it will be applicable for the tax returns of 2016. Here is the some important information of Income Tax Brackets for the individual taxpayer.
• If your individual income is in between 0 – $9,225 then you will have to pay 10% tax.
• If it is in between $9,226 -$37,450 then the tax due is 15%.
• If your earning is in between $37, 451-$90,750 then the tax payment will be 25%
• If your income is in between $90, 751- $ 189, 300 then the tax amount will be 28 %
• If it is in between $ 189, 301- $411, 500 then the tax due will be 33%
• If your earning is in between $ 411,501- $413,200 then the tax due is 35%
• And if your individual earning is $411,201+ then the tax due is 39.6%
If you are married individuals and filing joint returns then your tax due will be less such as if your income is in between the $0- $18, 450 then you will have to pay 10% tax but in case of individual tax payer you need to pay 10% tax for $0- $9, 225 only. If you are a married individual, but filing for separate returns then your tax due will be more. And the tax due also varies according to the income and the position of the taxpayer.
Standard Deduction: In this announcement, taxpayers will find a slight bump in the standard deduction since it rises to $6,300 for individuals and also for married couple who wants to file separate returns and $12,600 for the married couples who want to file joint returns. And also for the head of the households the standard deduction rises to $9,250.
Itemized Deductions: Itemized deductions will rise for the individuals whose income is $258,250 or more and $309,900 for the married couples who filed the returns jointly.
Personal Exemptions: The personal amount also goes up for the year of 2015. It rises to $4,000, up from $3,950 of 2014. This exemption acts as a fillip for millions of people.
Here are the some updates of the family-related tax items.
• Earned Income Tax Credit (EITC): If the taxpayers filing jointly for one child the amount will be $3,359, for two children it will be $5,548 and for three or more children it will be $6,242 and for no children it will be $503.
• Child & Dependent Care Credit. The value used to decide the sum of credit that might be refundable is $3,000. Remember that this amount is not the actual credit amount. This is the value of the operating cost that is used to decide the credit.
• Kiddie Tax: For the year 2015, the Kiddie tax is $1,050.
• Adoption Credit: For adopting a child with some special care $13,400 credit is allowed and the maximum credit is allowed for any kind of adoption is $13, 400.
These are the updates of the 2015 Income Tax brackets. IRS announcement also includes tax returns on education, health and retirement plans.