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  • The Hoffman Companies
  • Financing and purchase of 60 Temple Place, Boston, MA
  • Boston Celtics
  • Develpment of new practice facility, Boston, MA
  • Seatrade International Co., Inc.
  • Stock sale to American Holdco, Inc.

IRS and Social Security Administration Release - 2016 Income and Transfer Tax Adjustments

Brian Gaudet January 29, 2016

The IRS and the Social Security Administration have released their 2016 list of CPI-adjusted items that will affect individual income, payroll, self-employment and transfer tax calculations for 2016. We have provided you with some of the key provisions in the following grids.

 

INCOME TAXES

Threshold amounts above which the top regular and alternative minimum tax (AMT) rates apply.

2016

2015

39.6% bracket threshold:

Taxable income above:

Taxable income above:

Joint returns / surviving spouses

$466,950

$464,850

Heads of household

$441,000

$439,000

Other unmarried individuals

$415,050

$413,200

Married filing separately

$233,475

$232,425

Estates and Trusts

$12,400

$12,300

AMT 28% bracket threshold:

AMTI above:

AMTI above:

Joint returns / surviving spouses

$186,300

$185,400

Other unmarried individuals

$186,300

$185,400

Married filing separately

$93,150

$92,700

Estates and Trusts

$186,300

$185,400

Personal exemption, standard deduction and foreign income exclusion amounts:

2016

2015

Personal exemption amount

$4,050

$4,000

Personal exemption phased-out:

Beginning/ending at AGI of:

Beginning/ending at AGI of:

Joint returns / surviving spouses

$311,300 / $433,800

$309,900 / $432,400

Heads of households

$285,350 / $407,850

$284,050 / $406,550

Other unmarried individuals

$259,400 / $381,900

$258,250 / $380,750

Married filing separately

$155,650 / $216,900

$154,950 / $216,200

Standard deduction:

 

 

Joint returns / surviving spouses

$12,600

$12,600

Heads of households

$9,300

$9,250

Other unmarried individuals

$6,300

$6,300

Married filing separately

$6,300

$6,300

Foreign income exclusion amount

$101,300

$100,800

AMT exemption amounts and the AMT exemption phase-out amounts:

AMT exemption amounts:

 

 

Joint returns / surviving spouses

$83,800

$83,400

Unmarried individuals

$53,900

$53,600

Married filing separately

$41,900

$41,700

Estates and Trusts

$23,900

$23,800

AMT exemption phased-out:

Joint returns / surviving spouses

$159,700

$158,900

Other unmarried individuals

$119,700

$119,200

Married filing separately

$79,850

$79,450

Estates and Trusts

$79,850

$79,450

 

EMPLOYMENT TAXES

Employment taxes imposed on wage earners:

2016

2015

Social Security tax wage base:

Wage ceiling amount

$118,500

$118,500

Maximum tax (rate = 6.2%)

$7,347.00

$7,347.00

1.45% Medicare tax wage bracket:

Joint filers

First $250,000 of wages

First $250,000 of wages

Married separate taxpayers

First $125,000 of wages

First $125,000 of wages

Other wage-earners

First $200,000 of wages

First $200,000 of wages

2.35% Medicare tax wage bracket:

Joint filers

Wages above $250,000

Wages above $250,000

Married separate taxpayers

Wages above $125,000

Wages above $125,000

Other wage-earners

Wages above $200,000

Wages above $200,000

Employment taxes imposed on self-employment (SE) income:

2016

2015

Social Security tax wage base:

SE income ceiling amount

$118,500

$118,500

Maximum tax (rate = 12.4%)

$14,694.00

$14,694.00

2.9% Medicare tax wage bracket:

Joint filers

First $250,000 of SE income

First $250,000 of wages

Married separate taxpayers

First $125,000 of SE income

First $125,000 of wages

Other SE income-earners

First $200,000 of SE income

First $200,000 of wages

3.8% Medicare tax wage bracket:

Joint filers

Wages above $250,000

Wages above $250,000

Married separate taxpayers

Wages above $125,000

Wages above $125,000

Other SE income-earners

Wages above $200,000

Wages above $200,000

 

TRANSFER TAXES

Estate and gift tax exclusions and valuation limitation:

2016

2015

Basic estate / gift tax exclusion

$5,450,000

$5,430,000

Generation-skipping tax exclusion

$5,450,000

$5,430,000

Gift tax annual exclusion

$14,000

$14,000

For gifts to a non-citizen spouse

$148,000

$147,000

Special use value reduction limit

$1,110,000

$1,100,000

If you have any questions about this e-alert, please contact Brian Gaudet.

This Alert is provided for information purposes only, and does not constitute legal advice.  According to Mass. SJC Rule 3:07, this material may be considered advertising. ©2016 Posternak Blankstein & Lund LLP. All rights reserved.

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