Photo by Michael Vadon
Taxes in 2014 are set to undergo various adjustments, affecting more than 40 tax provisions. The Revenue Procedure 2013-35, published on 18 November 2013, provides detailed information of each adjustment.
A tax rate of 39.6% will affect singles whose annual income exceeds $406,750 and married couples with joint returns exceeding $457,600. This is up from the current amounts of $400,000 and $450,000 respectively. The Revenue Procedure describes the rates that apply to other thresholds.
In terms of standard deductions for singles or married couples filing separate returns, the amount rises from $6,100 to $6,200. For married couples filing joint returns, it rises from $12,200 to $12,400. On the other hand, the standard deduction that applied for heads-of-households has risen from $8,950 to $9,100.
Both the personal exemption and the alternative minimum tax exemption will also rise. Couples who file jointly and have three or more qualifying children will qualify for a maximum earned credit of $6,143, which is up by $99 from the 2013 amount.
Among the amounts that remain unchanged, include the annual exclusion for gifts, which stands at $14,000, and the annual dollar limit for contribution to an employer–sponsored healthcare FSA, standing at $2,500.
IRS Tax Adjustments
by Steve Patterson