Review of Tax Rates for 2015

 As we approach the conclusion of 2015, the holiday season and taxes are probably the two most prevalent subjects on the minds of most people. Therefore, we thought providing you information concerning tax changes might help provide you a better picture concerning what to expect on your tax return.
Tax Rates
The only change are the thresholds for the 39.6 percent tax bracket. The new lower limits are:
Single (unmarried): $413,200
Married filing separately: $232,425
Head of household: $439,000
Married filing jointly: $464,850
Standard Deductions
If you are among the majority of taxpayers, you will claim the standard deduction on your tax return. The standard deduction amounts did change for 2015 and are as follows:
Single (unmarried): $6,300 (a $100 increase)
Married filing separately: $6,300 (a $100 increase)
Head of household: $9,250 (a $150 increase)
Married filing jointly and qualifying widows (or widowers): $12,600 (a $200 increase)
Obamacare Penalty for No Health Insurance
For 2015, the Individual Shared Responsibility fee for not having insurance is $325 per adult and $162.50 per child (up to $975 for a family) or two percent of your taxable income – whichever is greater. The monthly fee is 1/12 of the total fee for each month you don’t have coverage or an exemption. (For tax year 2016, these fees will more than double!)
Medicare and Social Security
The tax for Medicare remains at 1.45 percent. Those who are unmarried with earnings in excess of $200,000 and taxpayers who are married and earned over $250,000 are taxed an additional 0.9 percent.
Social Security tax remains 6.2 percent. However, the Social Security maximum was raised by $1,500 to $118,500. Also, the cost of living adjustment is 1.7 percent, which raises the limit to $2,663 per month.
Retirement Accounts
Contribution limits for 401(k)s and 403(b)s are now $18,000, while catch up contributions are limited to $6,000. The simple retirement plan maximum is now $12,500, however, the catch up limit remains at $2,500.
Tax Planning
The solution to minimize your annual tax liability is to tax plan. Those who are clients of our practice are welcome to receive complimentary tax planning advice through our EZ2 program.
*A “Sunset provision” is legislation that provides an automatic repeal of the entire sections of a law once a specific date is reached. Once arrived at, the legislation is rendered void.
Professional Tax & Financial Services is located at 25124 Springfield Ct., Ste. 260, in Valencia. For more information, please call 661-259-1967 or 1-800-998-4829. You may also visit our tax services website at www.scvprotaxservices.com.