Each year the IRS adjusts the tax provisions to account for inflation. For the tax year 2016, the income limits for all brackets are adjusted as follows:
| Rate | Single Filers | Married Joint Filers | Head of Household Filers |
|
10% |
$0 to $9,275 | $0 to $18,550 | $0 to $13,250 |
|
15% |
$9,275 to $37,650 | $18,550 to $75,300 | $13,250 to $50,400 |
|
25% |
$37,650 to $91,150 | $75,300 to $151,900 | $50,400 to $130,150 |
|
28% |
$91,150 to $190,150 | $151,900 to $231,450 | $130,150 to $210,800 |
|
33% |
$190,150 to $413,350 | $231,450 to $413,350 | $210,800 to $413,350 |
|
35% |
$413,350 to $415,050 | $413,350 to $466,950 | $413,350 to $441,000 |
|
39.6% |
$415,050+ | $466,950+ | $441,000+ |
Standard Deduction and Personal Exemption
The personal exemption for 2016 is $4,050
| Filing Status | Deduction Amount |
| Single | $6,300.00 |
| Married Filing Jointly | $12,600.00 |
| Head of Household | $9,300.00 |
| Personal Exemption | $4,050.00 |
PEP and Pease Provisions
The PEP and Pease provisions are designed to increase taxable income to high-earning individuals and households. The Pease limitations effect itemized deductions while PEP phases out the personal exemption. The income threshold for when these effect taxpayers are $259,400 for single filers and $311,300 for married filers.
| Pease Limitations on Itemized Deductions | |
| Filing Status | Income |
| Single | $259,400.00 |
| Married Filing Jointly | $311,300.00 |
| Head of Household | $285,350.00 |
| Personal Exemption Phase-Out | ||
| Filing Status | Phase-Out Begin | Phase-Out Complete |
| Single | $259,400.00 | $381,900.00 |
| Married Filing Jointly | $311,300.00 | $433,800.00 |
| Head of Household | $285,350.00 | $407,850.00 |
Alternative Minimum Tax (AMT)
The Alternative Minimum Tax (AMT) exemption has been indexed for inflation since 2012. The current threshold is $53,900 for singles and $83,800 for married couples filing jointly.
| Alternative Minimum Tax Exemptions (Estimate) | |
| Filing Status | Exemption Amount |
| Single | $ 53,900.00 |
| Married Filing Jointly | $ 83,800.00 |
| Married Filing Separately | $ 41,900.00 |
Earned Income Tax Credit
| 2016 Earned Income Tax Credit Parameters (Estimate) | |||||
| Filing Status | No Children | One Child | Two Children | Three or More Children | |
| Single or Head of Household | Income at Max Credit |
$6,610 |
$9,920 |
$13,930 |
$13,930 |
| Maximum Credit |
$506 |
$3,373 |
$5,572 |
$6,268 |
|
| Phase out Begins |
$8,270 |
$18,190 |
$18,190 |
$18,190 |
|
| Phase out Ends (Credit Equals Zero) |
$14,880 |
$39,296 |
$44,648 |
$47,955 |
|
| Married Filing Jointly | Income at Max Credit |
$6,610 |
$9,920 |
$13,930 |
$13,930 |
| Maximum Credit |
$506 |
$3,373 |
$5,572 |
$6,268 |
|
| Phase out Begins |
$13,810 |
$23,730 |
$23,730 |
$23,730 |
|
| Phase out Ends (Credit Equals Zero) |
$20,420 |
$44,836 |
$50,188 |
$53,495 |
|
If you have any questions, please e-mail or call us, we would welcome the opportunity to help you minimize your taxes.