2015 Tax Law Highlight or Changes
Standard Deduction and Personal exemptions: The standard amount you can deduct from income if you don’t itemize your deductions is $6,300 ($12,600 for married couples filing jointly, or $9,250 if you file as head of household). If you are age 65 or older on the last day of the year and don’t itemize deductions, you are entitled to a higher standard deduction. Therefore, you can take a higher standard deduction for 2015 if you were born before January 2, 1951. If you are blind on the last day of the year and you don’t itemize deductions, you are entitled to a higher standard deduction.
The personal exemption for 2015 is $4,000, up from $3,950. Each exemption for yourself, your spouse (if you file jointly), and your dependents reduces your taxable income by $4,000. There is no marriage penalty relief because the standard deduction for married taxpayers filing jointly increases and the 15% of tax bracket expands.
If you would like to know more about “Do I Need to File my Tax return”? Please go to http://clotax.com/individuals/third/2015-filing-requirements/
Alternative Minimum Tax: For tax year 2015, the Alternative Minimum Tax Exemption amounts increased to $83,400 for married filing jointly or qualifying widow(er) status, $53,600 for single and head of household status, $41,700 for a married filing separately, and $23,800 for estates and trusts. In addition, nonrefundable credits are allowed against AMT.
Earned income credit: If you have no children, your maximum Earned Income Credit for 2015 is $503. With two children, the maximum amount is $5,548, and with one child, it is $3,359. If you have three or more qualifying children, the maximum Credit you can receive for 2015 is $6,242 (up from $6,143 in 2014).
Social Security Wage Ceiling: The maximum amount of your earned income on which you pay Social Security tax is $118,500 for 2015. When you reach that amount with one employer, they should stop withholding Social Security tax from your pay until the following year. If you work for more than one employer, and your total earnings are more than $118,500, we will calculate a credit for any overpayment of Social Security taxes for you.