In 2014, personal exemptions and standard deductions will rise and tax brackets will widen due to inflation.
By law, the dollar amounts for a variety of tax provisions, affecting virtually every taxpayer, must be revised each year to keep pace with inflation. New dollar amounts affecting 2014 returns, filed by most taxpayers in April 2015, include the following:
- The value of each personal and dependent exemption, available to most taxpayers, is $3,950, up $50 from 2013.
- The new standard deduction is $12,400 for married couples filing a joint return, up $200, $6,200 for singles and married individuals filing separately, up $100, and $9,100 for heads of household, also up $150. The additional standard deduction for blind people and senior citizens is $1,200 for married individuals and $1,550 for singles and heads of household. Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions such as mortgage interest, charitable contributions and state and local taxes.
- Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $73,800, up from $72,500 in 2013.
We’ll be glad to help with all of your tax planning needs in 2014. Give us a call today!