Staying abreast of current tax benefits is absolutely essential for your business. Getting deductions is important for reaping financial benefits. Depending on the individual, there are different tax categories and deductions to be understood. With effect from January 1, 2015, IRS has declared the annual inflation adjustments for various provisions. Here are the key tax deductions:
Standard Deduction
In 2015, a slight raise has been observed in Tax Deduction. It has risen from $6,200 to $6,300 for singles and from $12,400 to $12,600 for married couple filing jointly. According to current updates, for surviving spouse, head of household and married couples filing separately, it has became $12,600, $9,250 and $6,300 respectively.
Itemized Deductions
The pease limitations are observed to reduce from 2006 to 2012, but they were brought back in 2013 and now in 2015, they will apply for the individuals with income of $258,250 or more and $309,900 for married couples filing jointly.
Personal Exemptions
The personal exemption has risen by $50, and is $4000 in 2015. PEP will phase out completely at $380,750, starting from $258,250 for an individual.
Family Related Tax Updates
EITC
In 2015, the maximum Earned Income Tax Credit available is $503 for married couples with no children, $3,359 with one child, $5,548 with two children and $6,242 with three or more children. Phaseouts vary according to the number of children and filing status (jointly or separately).
Child And Dependent Care Credit
For 2015, credit amount has not been changed but, the value of the expenses, used to determine the credits is $3,000.
Kiddie Tax
Kiddie taxes are the unearned income of a child at parent’s marginal rate. $1,050 is set as a threshold for the kiddie taxes in 2015.
Adoption Credit
Allowed credit to adopt a child with special needs is set to be $13,400. Qualified adoption expenses up to $13,400 is the maximum allowed credit for other adoptions. Phaseouts also apply for taxpayers with MAGI more than $201,010 and phase out at $241,010 or more.
Education Related Updates
Hope Scholarship Credit
Allowable Hope Scholarship Credit for 2015 is $2,500. For taxpayers with MAGI over $80,000, income restrictions are also applicable.
Lifetime Learning Credit
Income restrictions also apply on Lifetime Learning Credit and starts for taxpayers with MAGI $55,000 or more.
Student Loan Interest Deduction
Maximum deductible amount on interest of student loan is $2,500. Phaseouts completely phase out for taxpayers with MAGI $80,000 starting from $65,000.
Miscellaneous Updates
Foreign Earned Income Exclusion
Foreign Earned Income Exclusion has risen from $99,200 to $100,800 in 2015.
Federal Estate Tax Exemption
In 2015, a descendent can leave an amount up to $5,430,000 without paying Federal Estate Tax. In 2014, it was $5,340,000.
Flexible Spending Accounts
The annual contribution to FSA has risen by $50 to $2,550 in 2015.
