global Tax 2016 Tax Brackets: A Complete Guide December 22, 2015 Pay attention to a few changes regarding your taxes for 2016. There are changes regarding mileage rates, personal exemptions, and estate taxes. The IRS adjusts dollar limitations on benefits, contributions, and other employee benefit plan limits each year based on inflation. So what exactly has changed for 2016? Most amounts have not changed for this year, but you will note a few adjustments in certain areas.Important Tax Figures for 2016 Social Security/Medicare 2016 2015 Social Security Tax Wage Base $118,500 $118,500 Medicare Tax Wage Base No limit No limit Employee portion of Social Security 6.2% 6.2% Individual Retirement Accounts 2016 2015 Roth IRA Individual, up to 100% of earned income $5,500 $5,500 Traditional IRA Individual, up to 100% of earned Income $5,500 $5,500 Roth and traditional IRA additional annual "catch-up" contributions for account owners age 50 and older $1,000 $1,000 Qualified Plan Limits 2016 2015 Defined Contribution Plan limit on additions on Sections 415(c)(1)(A) $53,000 $53,000 Defined Benefit Plan limit on benefits (Section 415(b)(1)(A)) $210,000 $210,000 Maximum compensation used to determine contributions $265,000 $265,000 401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2)) $18,000 $18,000 401(k), 403(b), 457 & SARSEP additional "catch-up" contributions for employees age 50 and older $6,000 $6,000 SIMPLE deferrals (Section 408(p)(2)(A)) $12,500 $12,500 SIMPLE additional "catch-up" contributions for employees age 50 and older $3,000 $3,000 Compensation defining highly compensated employee (Section 414(q)(1)(B)) $120,000 $120,000 Compensation defining key employee (officer) $170,000 $170,000 Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c)) $600 $600 Driving Deductions 2016 2015 Business mileage, per mile 54 cents 57.5 cents Charitable mileage, per mile 14 cents 14 cents Medical and moving, per mile 19 cents 23 cents Business Equipment 2016 2015 Maximum Section 179 deduction $500,000 $500,000 Phaseout for Section 179 $2,000,000 $2,000,000 Transportation Fringe Benefit Exclusion 2016 2015 Monthly commuter highway vehicle and transit pass $255 $255 Monthly qualified parking $255 $250 Standard Deduction 2016 2015 Married filing jointly $12,600 $12,600 Single (and married filing separately) $6,300 $6,300 Heads of Household $9,300 $9,250 Personal Exemption 2016 2015 Amount $4,500 $4,000 Personal Exemption Phaseout 2016 2015 Married filing jointly and surviving spouses Begins at $311,300 Begins at $309,900 Heads of Household Begins at $285,350 Begins at $284,050 Unmarried individuals Begins at $259,400 Begins at $258,250 Married filing separately Begins at $155,650 Begins at $154,950 Domestic Employees 2016 2015 Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc. $1,900 $1,900 Kiddie Tax 2016 2015 Net unearned income not subject to the "Kiddie Tax" $2,100 $2,100 Estate Tax 2016 2015 Federal estate tax exemption $5.45 million $5.43 million Maximum estate tax rate 40% 40% Annual Gift Exclusion 2016 2015 Amount you can give each recipient $14,000 $14,000 Questions? Contact any member of our Tax Services Team.
