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Recently, the Internal Revenue Service released Rev. Proc. 2014-61 outlining the 2015 inflationary adjustments. These adjustments affect various income tax rate thresholds and the estate and gift tax exemption.

Some highlights of the new income tax rates and deductions are as follows:

INCOME TAX 2014 2015 SINGLE
Standard Deduction

6,200 Single

12,400 Married Filing Jointly (MFJ)

6,300 Single

12,600 MFJ

Personal Exemption 3,950 4,000
AMT Exemption

52,800 Single

82,100 MFJ

53,600 Single

83,400 MFJ

Adoption Credit Up to 13,190 Up to 13,400
Max Earned Income Credit 6,143 MFJ w/3+ children 6,242 MFJ w/3+ children
TAX RATES
10%

<9,075 Single

<18,150 MFJ

<9,225 Single

<18,450 MFJ

15%

9,075 Single

18,150 MFJ

9,225 Single

18,450 MFJ

25%

36,900 Single

73,800 MFJ

37,450 Single

74,900 MFJ

28%

89,350 Single

148,850 MFJ

90,750 Single

151,200 MFJ

33%

186,350 Single

226,850 MFJ

189,300 Single

230,450 MFJ

35%

405,100 Single

405,100 MFJ

411,500 Single

411,500 MFJ

39.6%

406,750 Single

457,600 MFJ

413,200 Single

464,850 MFJ

The estate and gift tax rates are also affected. Currently, an individual may give away during life and at death an amount equal to $5.34 million. In 2015, the amount will rise to $5.43 million, effectively shielding $10.86 million for a married couple.

The annual gift tax exclusion will remain at $14,000, as it has been for the last two years. The amount that may be gifted to a non-citizen spouse is raised in 2015 to $147,000, up from $145,000.

The application of the higher exemption to $5.43 million will shield an additional $90,000 from taxes, which means an extra $36,000 of estate tax that will not be due.

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