2014 Tax Rates and Figures – IRS Announces
At last, after weeks of predicting and speculating next year’s tax numbers, the IRS recently announced the official 2014 tax rates and figures. Each year the figures are derived from the existing tax code or are adjusted for inflation using the latest Consumer Price Index (CPI). No need to hunt them down yourself; below we’ve unveiled the key 2014 tax rates and figures so you don’t have to. Subject to Congress losing their minds again and swooping in last minute with a bunch of changes. Here we go-
New Tax Brackets
Tax brackets were given an inflation adjustment and have nominally increased between 1.6% – 1.8%. For example, the maximum taxable income for single filers in the 10% bracket is $9,075 (up from $8,925 in 2013). This is good news!
The marginal tax rates for 2014 are: 10%, 15%, 25%, 33%, 35%, and 39.6%. Yes, that 39.6% tax rate, a new addition in 2013, remains. However, the 39.6% rate doesn’t hit until income levels reach $457,600 for married filing jointly and $406,750 for single filers in 2014.
Likewise, the 3.8% Medicare surtax implemented in 2013 continues.
New Personal Exemption
For each personal exemption, the amount is $3,950. An increase of $50 from 2013. Typical yearly increase.
New Standard Deduction
The 2014 standard deduction based on filing status will be:
|Head of Household||$9,100|
|Married Filing Jointly||$12,400|
|Married Filing Separately||$6,200|
65 yrs old or blind add to the above amounts:
|Married Filing Jointly||$1,200|
Limits on Itemized Deductions
Taxpayers with higher incomes will have limitations on the amount of itemized deductions they can claim. This impacts taxpayers with adjusted gross incomes above $254,200 (single), or $305,050 (married filing jointly) in 2014.
Other Figures of Interest
|IRA Contribution Limits (unchanged)||$5,500|
|401k Contribution Limits (unchanged)||$17,500|
|Gift Tax Exclusion||$14,000|
|Estate Gift Tax Exclusion||$5.3M|
|Foreign Earned Income Exclusion||$99,200|
|FSA Contribution Limit (unchanged)||$2,500|
You won’t see the effects of these new 2014 tax rates until your 2014 tax return (due in April 2015), but having some control over your money’s fate never hurts. Planning ahead and protecting your wealth is what we do best.
The Watson CPA Group is a progressive, full service tax and accounting firm with offices in Colorado Springs.