Happy New Year! As you prepare your taxes to be filed by April 15th based on 2014 IRS requirements, it’s smart to look ahead to some of the 2015 tax law changes that will impact your filing situation this year – and when you file in April 2016.
Here is an overview of the most important changes to the federal IRS tax code that you should be aware of:
- As usual, the IRS has adjusted the income tax brackets for 2015. The highest tax rate of 39.6% now applies to individual taxpayers who earn over $413,200 and married couples who make over $464,850 this year.
- The standard mileage rate for self-employed professionals and small business owners who use their vehicles for business trips has increased to 57.5 cents per mile in 2015, up from 56 cents per mile in 2014.
- The standard deduction amounts for 2015 have increased from 2014. They are as follows;
Single filers: $6,300
Joint filers: $12,600
Married filing separately: $6,300
Head-of-household filers: $9,250
Surviving spouses: $12,600
- The personal exemption amount for tax year 2015 is set at $4,000 – up from the $3,950 limit from last year.
- If your small business receives payments in 2015 in virtual currency like Bitcoin payments, you must include the fair market value of them with your income, meaning that the IRS considers it taxable income. Keep in mind that different calculations apply if you invest in virtual currency or receive it as compensation for services your business provides to customers.
- The Affordable Care Act requires taxpayers to have health insurance or pay a tax penalty. In 2014, the penalty was the greater of 1% of your household income or $95 per person. For 2015, the penalty for being uninsured is now 2% of total household income or $325 per person – whichever is greater.
- The limit on employee contributions to a 401(k) retirement plan has increased to $18,000, up $500 from 2014. So be sure to let the person who handles payroll at your employer know that you want to adjust your contribution to maximize your 2015 retirement savings. In addition, the annual limit on employee contributions to flexible spending accounts (FSAs) has gone up to $2,550 for qualified health care expenses. This is a $50 increase from a year ago, so be sure to take advantage of this new maximum limit.
- The Alternative Minimum Tax (AMT) exemption amount for tax year 2015 is now set at $53,600 for individuals or $83,400 for joint filers. These figures have increased from roughly 1.5% from 2014.
To learn more about tax law changes for 2015, and for all of your tax-filing needs, turn to 1-800Accountant. Call 1-800-222-6868 or check out the “Services” page on www.1-800Accountant.
Image credit: The image included in this blog post is used with permission via the Creative Commons license through Flickr.