Headlines: An early glimpse at the income tax picture for 2016 is now available from Wolters Kluwer Tax & Accounting US. The new information comprises estimated ranges for each 2016 tax bracket in addition to projections for a growing number of inflation-sensitive tax figures, such as the personal exemption and the standard deduction. Projections are based on the relevant inflation data recently released by the U.S. Department of Labor.
Inflation Adjustments Background
Since the late 1980s, the U.S. Tax Code has required that federal income tax brackets be adjusted for inflation annually, and inflation adjustments have been inserted into the Internal Revenue Code in recent years with increasing frequency. For example, the Code now requires over 50 other inflation-driven computations to determine deduction, exemption and exclusion amounts in addition to the 40 separate computations needed to inflation-adjust the tax bracket tables each year.
Key Tax Savings, Non-improvement Estimates for 2016:
- Projections based on the Department of Labor’s inflation figures for the 12-month period between August 31, 2014, and August 31, 2015 suggest most taxpayers will experience modest savings, contrast to 2015 tax filings. For example:
- Because of the income ranges bracketing the marginal tax rates have raised, a single filer with taxable income of $50,000 should owe $22.50 less next year due to the adjustments to the income tax rate brackets between 2015 and 2016.
- A married couples filing jointly with a total taxable income of $100,000 should pay $45 less income taxes in 2016 than they will on the same income for 2015 because of indexing of their tax bracket for 2016.
- The dependent standard deduction, used on the returns of individuals claimed as dependents on another taxpayer’s tax return, remains at $1,050 for 2016.
- The additional standard deduction for those 65-years-old and older or who are blind will remain at $1,250 for 2016, as will the $1,550 additional amount for single aged 65 or older or blind filers.
Inflation-adjusted Tax Improvement Estimates for 2016:
- The personal exemption amount gets bumped up by inflation by $50, to $4,050 for 2016, up from $4,000 in 2015.
- The standard deduction for single, married filing jointly, and married filing separately filers is predictable to remain the same for 2016. The standard deduction for heads of household is predictable to rise from $9,250 for 2015 to $9,300 for 2016. Any improvement in the standard deduction, of course, can produce lower taxes by decreasing the taxpayer’s taxable income.
Wolters Kluwer Tax & Accounting US projects the following for 2016 alternative minimum tax (AMT) exemptions:
- For married joint filers and surviving spouses, the exemption will be adjusted upward to $83,800, up from $83,400 for 2015.
- For unmarried single filers and heads of households, the 2016 exemption will be $53,900, up from $53,600 for 2015.
- For married single filers, the exemption will improvement to $41,900, up from $41,700 in 2015.
The 2016 year represents the third year that the 39.6-percent tax bracket for higher-income taxpayers, enacted by the American Taxpayer Relief Act of 2012 (ATRA), will be imposed. For 2016, Wolters Kluwer projects that the minimum income amounts at which this top tax rate will kick in will rise to:
- $466,950 (from $464,850) for married joint filers
- $441,000 (from $439,000) for heads of households
- $415,050 (from $413,200) for unmarried filers
- $233,475 (from $232,425) for married separate filers
- These inflation-adjusted amounts also trigger a 20-percent tax on that portion of taxable income attributable to net capital gains and qualified dividends that exceed these bracket amounts.
The estate and gift tax applicable exemption was first set at a $5 million level back in 2011. The amount has been adjusted for inflation by Congress and is now projected at $5,450,000 for 2016. A spousal portability election can now effectively protect double that amount against estate and gift tax ($10,900,000 for 2016).
The 2016 foreign earned income exclusion will improvement to $101,300 for 2016, up from $100,800 for 2015.
The income phaseout range for married joint filers making Roth IRA contributions will be $184,000 to $194,000 for 2016, an improvement from $183,000 and $193,000 for 2015.
Wolters Kluwer Tax & Accounting US is a leading provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals since 1913. Among its market-leading solutions are the CCH® ProSystem fx® Suite, CCH Axcess™, CCH® IntelliConnect®, CCH® IntelliConnect Direct, CCH® Accounting Research Manager® and the U.S. Master Tax Guide®.
U.S. Stocks NEWS: On Friday, Shares of PepsiCo, Inc. (NYSE:PEP), lost -0.27% to $93.12.
The Doritos brand, in partnership with the It Gets Better Project, recently declared a new, limited-edition product to celebrate and support the lesbian, gay, bisexual and transgender (LGBT) community in the boldest, most colorful way possible. Introducing Doritos Rainbows chips, the first Doritos product in history made up of multiple, rainbow-colored Doritos chips inspired by the Pride flag. The new product is available exclusively to consumers who donate to the It Gets Better Project, an organization that seeks to provide hope to LGBT young people and inspire the changes to make the world a better place for them.
Started September 17, consumers who donate $10 or more in support to the It Gets Better Project through www.ItGetsBetter.org/DoritosRainbows will be mailed a bag of Doritos Rainbows chips, while supplies last. The aim is to raise funds for the It Gets Better Project and the important work the organization does in support of LGBT youth around the world. Upon making their donations, consumers are encouraged to share messages of hope and inspiration using #BoldandBetter.
Time and again, our consumers have shown us, there really is nothing bolder than being true to yourself and living life to the fullest, said Ram Krishnan, chief marketing officer, Frito-Lay. With Doritos Rainbows chips, were bringing an entirely new product experience to our consumers to show our commitment toward equal rights for the LGBT community and celebrate humanity without exception.
PepsiCo, Inc. operates as a food and beverage company worldwide. Its Frito-Lay North America segment offers Lay’s potato chips, Doritos tortilla chips, Cheetos cheese-flavored snacks, Tostitos tortilla chips, branded dips, Ruffles potato chips, Fritos corn chips, and Santitas tortilla chips.
Shares of Spectra Energy Corp. (NYSE:SE), declined -2.04% to $27.92, during its last trading session.
Spectra Energy Corp, Chief Executive Officer Greg Ebel will speak at the Raymond James 11th Annual North American Equities Conference on Tuesday, September 22, 2015. Ebel also serves as chief executive officer of Spectra Energy Partners (SEP).
Spectra Energy Corp, through its auxiliaries, owns and operates a portfolio of natural gas-related energy assets in North America. The company’s Spectra Energy Partners segment engages in the transmission, storage, and gathering of natural gas, in addition to transportation and storage of crude oil and natural gas liquids (NGLs) for customers in various regions of the midwestern, northeastern, and southeastern United States and Canada.
At the end of Friday’s trade, Shares of Centurylink Inc (NYSE:CTL), lost -1.57% to $25.63.
CenturyLink, declared that it has one of the largest fiber-enabled gigabit networks in the country and continues as an industry leader in the number of homes it has enabled with broadband speeds up to 1 gigabit per second (Gbps). CenturyLink now offers gigabit Internet service to residential and small business customers in parts of 17 states and, by the end of 2015, should have more than 700,000 households across the country enabled with fiber-to-the-home (FTTH) technology capable of uploading and downloading information at speeds up to 1 Gbps.
CenturyLink first launched gigabit service to residents and small businesses in Omaha in 2013 as part of a fiber network trial and in August 2014, declared that it had expanded that gigabit service to residential and business customers in 16 markets. In May of this year, CenturyLink extended gigabit fiber service to additional small and midsized businesses (SMBs) located near the companys fiber network backbone or in fiber-fed multi-tenant unit office buildings, resulting in gigabit service being available to nearly 490,000 SMBs.
CenturyLink is announcing that this ultra-fast gigabit service is now available to residential and small business customers in parts of six new states counting Arizona, Idaho, Iowa, New Mexico, North Carolina and South Dakota.
CenturyLink, Inc. provides various communications services to residential, business, governmental, and wholesale customers in the United States. It operates through two segments, Business and Consumer.
Finally, Kohls Corporation (NYSE:KSS), ended its last trade with -2.88% loss, and closed at $49.21.
Kohl’s, declared a $100,000 cash donation to support wildfire relief efforts across the western United States. Kohl’s is providing this donation to the American Red Cross, which is delivering much-needed emergency supplies and services in the influenced areas.
In addition to a financial contribution, Kohl’s encourages its associates to volunteer in support of recovery efforts through its Associates in Action volunteer program. In recognition of volunteer hours, Kohl’s will donate additional corporate grants to the nonprofit organizations being supported by Kohl’s associates.
Kohls Corporation operates department stores in the United States. It offers private label, exclusive, and national brand apparel, footwear, accessories, beauty, and home products to children, men, and women customers.
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