The Internal Revenue Service (IRS) has announced the annual inflation adjustments for a number of provisions for the year 2016, including tax rate schedules, tax tables and cost-of-living adjustments for certain tax items.
Tax Brackets. The big news is, of course, the tax brackets and tax rates for 2016:
The standard deduction amounts for 2016 are as follows:
For 2016, the additional standard deduction amount for the aged or the blind is $1,250. The additional standard deduction amount is increased to $1,550 if the individual is also unmarried and not a surviving spouse.
For those taxpayers who itemize their deductions, the Pease limitations, named after former Rep. Don Pease (D-OH) may cap or phase out certain deductions for high income taxpayers. The Pease thresholds for 2016 are:
For other changes for tax year 2016, your tax specialist, Pat Michael, EA, will be able to advise you.