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2015 Inflation Adjustments and Other Tax Changes

Carolyn A. Hegge

January 2, 2015

The IRS has announced the annual inflation adjustments for the 2015 tax year as well as other 2015 tax changes resulting from recently passed legislation.  The following table gives you a general overview of the 2015 adjustments and changes.  As always, you should consult your own tax advisor for information and advice on how these rates and changes apply to your specific situation.

Gift Tax 2015 2014
Annual gift tax exclusion (per recipient other than a spouse) $14,000 $14,000
Annual gift tax exclusion for gifts to a spouse who is US citizen Unlimited Unlimited
Annual gift tax exclusion for gifts to a spouse who is not a US citizen $147,000 $145,000
Estate Tax 2015 2014
Federal estate tax exemption amount $5,430,000 $5,340,000
Maximum federal estate tax rate 40% 40%
IRAs-Roth and Traditional 2015 2014
IRA contribution limit (not to exceed 100% of earned income) $5,500 $5,500
IRA catch-up contributions (not to exceed to 100% of earned income) for account owners age 50 or older $1,000 $1,000
Income Limits for Contributing to a Roth IRA 2015 2014
Limitation on ROTH IRA contributions by married couples and surviving spouses filing joint returns Begins at AGI of $183,000 Begins at AGI of $181,000
Limitation on ROTH IRA contributions by unmarried individuals and heads of households Begins at AGI of $116,000 Begins at AGI of $114,000
Limitation on ROTH IRA contributions by married individuals filing separate returns Begins at AGI of $-0- Begins at AGI of $-0-
Deduction Phase-Out for Traditional IRAs 2015 2014
Married couple filing joint returns where the IRA contributor is covered by a workplace retirement plan AGI between $98,000 and $118,000  AGI between $96,000 and $116,000
Married couple filing joint returns where the IRA contributor is not covered by a workplace retirement plan but the spouse is covered AGI between $183,000 and $193,000 AGI between $181,000 and $191,000
Unmarried individuals and heads of households covered by a workplace retirement plan AGI between $61,000 and $71,000 AGI between   $60,000 and $70,000
Married individual covered by a workplace retirement plan and filing a separate return AGI between   $0 and $10,000 AGI between   $0 and $10,000
401(k), 403(b), Profit-Sharing Plan Limits 2015 2014
Maximum annual compensation amount taken into account when determining employer and employee contributions $265,000 $260,000
Elective deferrals for traditional and safe harbor 401(k) plans and for 403(b) plans $18,000 $17,500
Elective deferrals for SIMPLE 401(k) plans $12,500 $12,000
Catch-up contributions for traditional 401(k) plans, safe harbor 401(k) plans, and 403(b) plans for employees age 50 or older $6,000 $5,500
Catch-up contributions for SIMPLE 401(k) plans for employees age 50 or older $3,000 $2,500
Total annual contribution limit for all accounts maintained by one employer (not to exceed 100% of compensation) $52,000 (plus catch-up contributions for employees 50 or older) $52,000 (plus catch-up contributions for employees 50 or older)
Income Tax-Standard Deduction 2015 2014
Standard deduction for unmarried individuals and for married individuals filing separately $6,300 $6,200
Standard deduction for married couples filing joint returns $12,600 $12,400
Standard deduction for heads of households $9,250 $9,100
Income Tax-Itemized Deductions 2015 2014
Itemized deduction limitation for unmarried individuals (other than surviving spouses filing joint returns or heads of households) Begins at AGI of $258,250 Begins at AGI of $254,200
Itemized deduction limitation for married couples and surviving spouses filing joint returns Begins at AGI of $309,900 Begins at AGI of $305,050
Itemized deduction limitation for heads of households Begins at AGI of $284,050 Begins at AGI of $279,650
Itemized deduction limitation for married individuals filing  separate returns Begins at AGI of $154,950 Begins at AGI of $152,525
Income Tax-Personal Exemption 2015 2014
Personal exemption amount $4,000 $3,950
Phase out of personal exemption for unmarried individuals (other than surviving spouses and heads of households) AGI between $258,250 and $380,750 AGI between $254,200 and $376,700
Phase out of personal exemption for married couples and surviving spouses filing joint returns AGI between $309,900 and $432,400 AGI between $305,050 and $427,550
Phase out of personal exemption for heads of households AGI between $284,050 and$406,550 AGI between $279,650 and$402,150
Phase out of personal exemption for married individuals filing separate returns AGI between $154,950 and $216,200 AGI between $152,525 and $213,775
Employer Sponsored Flex Plans 2015 2014
Annual limit on employee contributions to employer-sponsored healthcare flexible spending arrangements $2,550 $2,500
Domestic Employees-Social Security and Medicare 2015 2014
Threshold wage amount for withholding Social Security (FICA) and Medicare taxes from cash wages paid to child care, house cleaning, etc. employees who are over 18 and not members of the employer’s immediate family, and threshold wage amount for the employer to be required pay its portion of such taxes $1,900 $1,900
Social Security Tax to be withheld from each employee’s wages 6.2% of the first $118,500 of wages 6.2% of the first $117,000 of wages
Medicare Tax to be withheld from each employee’s wages 1.45% of wages 1.45% of wages
Additional Medicare Tax to be withheld from each employee’s wages 0.9% of wages in excess of $200,000 ($250,000 for married filing jointly) 0.9% of wages in excess of $200,000 ($250,000 for married filing jointly)
Employer’s portion of Social Security Tax Amount equal to 6.2% of the first $118,500 of employee’s wages Amount equal to 6.2% of the first $117,000 of employee’s wages
Employer’s portion of Medicare Tax Amount equal to 1.45% of  employee’s wages Amount equal to 1.45% of  employee’s wages
Employer’s share of Additional Medicare Tax -0- -0-
Standard Mileage Rates for Computing Deductible Costs of Operating Automobiles for Business, Medical, Moving and Charitable Purposes 2015 2014
Miles driven for business $.575/mile $.56/mile
Miles driven for medical or moving purposes $.23/mile $.235/mile
Miles driven in service of charitable organizations $.14/mile $.14/mile

 

Sources:  Rev. Proc. 2014-61; IR-2014-99; IR-2014-104; Notice 2014-79; IR-2013-95; IR-2013-4; IR-2012-95; Rev. Proc. 2013-15; IRS Topic 756; http://www.irs.gov/Retirement-Plans/COLA-Increases-for-Dollar-Limitations-on-Benefits-and-Contributions; http://www.ssa.gov/news/press/factsheets/colafacts2015.pdf;

If you have any questions about how the information in this article may affect you or your business, please contact Carolyn Hegge at chegge@stroudlaw.com or (608) 257‑2281 or your Stroud attorney.


DISCLAIMER: The information in this article is provided for general informational purposes only, is not necessarily updated to account for changes in the law, and should not be considered tax or legal advice.  This article is not intended to create, nor does the receipt of it constitute, an attorney-client relationship.  You should consult with your own legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.