Potential Changes In Tax During 2015 – Who Will Be The Benefiting?

According to recent reports, the Internal Revenue Service or the IRS has accounted the annual inflation adjustments for a number of provisions for the year 2015, including tax tables, tax rate schedules and cost-of-living adjustments for certain tax items. The changes will be applicable numbers for the tax yea 2015, in other words it will be effective from 1st January, 2015. They will not be the numbers and rates that you’ll use to prepare your 2014 tax returns in 2015. Instead, these numbers and rates (the changed ones) are those that you will use to prepare your 2015 tax returns in 2016. Did you get it? Good! Now let’s have a look at the changes.

In this article we’ll continue the approach that we’ve taken in the past to discuss the significant and potential tax changes in 2014-2015. That discussion will include changes to the Social Security and Medicare, mileage deduction rates, tax standard deduction rates, earned income credits, Hope and Lifetime Learning tax credits and changes to the retirement accounts like the 401(k), IRAs and Roth plans.

Individual tax payers

If the taxable income is between:
Then the tax due is:
                               0 - $9,225
10% of the taxable income
$9,226 - $37,450
$922.50 + 15% of the amount over $9,225
$37,451 - $90,750
$5,156.25 + 25% of the amount over $37,450
$90,751 - $189,300
$18,481.25 +28% of the amount over $90,750
$189,301- $411,500
$46,075.25 + 33% of the amount over $189,300
$411,501 - $413,200
$119,401.25 + 35% of the amount over $411,500
$413,201 and above
$119,996.25 + 39.6% of the amount over $413,200

Standard deductions: All taxpayers will now see a slight increase in the standard deduction. The standard deduction rises to $6300 for singles and the married couples filing seperate returns and $12,600 for married couples who are filing jointly, up from $6200 and $12,400 respectively for the tax year 2014. The standard deduction for heads of household rises to $9240 up from $9100.

Filing Status
Standard Deduction Amount
Married filing jointly
Married filing separately
Head of Household
Surviving Spouse

Itemized deductions: There are limitations for itemized deductions too – The pease limitations, which has been named after former Rep. Don Pease – for 2015 will be introduced for individuals with incomes of $258,250 or more. The Pease Limitations were slated to be reduced from the beginning of 2006 and then it was eliminated in 2010; as with other tax cuts, the elimination was then extended throughout the end of 2012. The limitations were then brought back in 2013 according to the original threshlds, indexed for inflation. The particular result of those changes is basically an increase in the top marginal tax rates.

Therefore, if you’re wondering about taking out a huge loan for some big purchase, you should be considered about the taxes. Take into account the above mentioned tax changes that are to be introduced in 2015 so that you can measure and weigh your decisions in the near future.

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