In the last two months, the IRS announced that there are various tax benefits
will increase on January 1, 2014, due to inflation. More than 40 provisions
will be affected, with some of the most relevant listed below:
The tax rate
of 39.6 percent affects singles whose income exceeds $406,750 ($457,600
for married taxpayers filing a joint return), up from $400,000 and $450,000,
The standard deduction
rises to $6,200 for singles and married persons filing separate returns
and $12,400 for married couples filing jointly, up from $6,100 and $12,200,
respectively, for tax year 2013. The standard deduction for heads of household
rises to $9,100, up from $8,950.
The limitation for itemized deductions claimed on tax year 2014
returns of individuals begins with incomes of $254,200 or more ($305,050
for married couples filing jointly).
The personal exemption rises
to $3,950, up from the 2013 exemption of $3,900. However, the exemption
is subject to a phase-out that begins with adjusted gross incomes of $254,200
($305,050 for married couples filing jointly). It phases out completely
at $376,700 ($427,550 for married couples filing jointly.)
The Alternative Minimum Tax exemption
amount for tax year 2014 is $52,800 ($82,100, for married couples filing
jointly). The 2013 exemption amount was $51,900 ($80,800 for married couples
The maximum Earned Income Credit
amount is $6,143 for taxpayers filing jointly who have 3 or more qualifying
children, up from a total of $6,044 for tax year 2013. The revenue procedure
has a table providing maximum credit amounts for other categories, income
thresholds and phase-outs.
Estates of decedents
who die during 2014 have a basic exclusion amount of $5,340,000, up from
a total of $5,250,000 for estates of decedents who died in 2013.
The annual exclusion for gifts
remains at $14,000 for 2014.
The annual dollar limit on employee contributions
to employer-sponsored healthcare flexible spending arrangements (FSA)
remains unchanged at $2,500.
The foreign earned income exclusion
rises to $99,200 for tax year 2014, up from $97,600, for 2013.
The small employer health insurance credit
provides that the maximum credit is phased out based on the employer's
number of full-time equivalent employees in excess of 10 and the employer's
average annual wages in excess of $25,400 for tax year 2014, up from $25,000 for 2013.
Together we can navigate the path that best suits your needs. Noah B. Herbold
is here to address your estate planning and tax concerns. To learn more,
@ocestateplanning.net for more information. It is important to have a knowledgeable lawyer by
your side to keep you informed and help you make the best decisions. We
can help you avoid unnecessary difficulties and get through any of these
processes as painlessly as possible. So plan ahead and call us today for
your complimentary consultation.
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