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IRS Adjusts 2014 Tax Benefits for Inflation

The Internal Revenue Service issued its annual inflation adjustments for more than 40 tax provisions, including the tax rate schedules, and other tax changes for 2014.

Due to Revenue Procedure 2013-35, the tax items for tax year 2014 include the following dollar amounts:taxBenefit

• 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, respectively. The other marginal rates—10, 15, 25, 28, 33 and 35 percent—and the related income tax thresholds are described in the revenue procedure.

• 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.

Original story on Accounting Today

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