2016 Tax Reference Guide

 

2016 Tax Reference Guide

 

Innovative Advisory Group's 2016 Tax Reference Guide

This is our 2016 Tax Reference Guide. We created it to make your life easier. Each year we collect this data so you don't have to. You might want to bookmark this page for future use.

 

2015

Retirement Plan Information

IRA Contribution Limits​

2016 IRA Contribution Limit

$5,500

Age 50+ Catch up Contribution

$1,000

Traditional IRA Deductibility Phase-Out Based on MAGI​

Active participants in employer plans

Married - Filing Jointly

$98,000 - $118,000

Married - Filing Separately

$0 - $10,000

All others

$61,000 - $71,000

Nonparticipant Married to a Participant

$184,000 - $194,000

Neither spouse a participant​

Fully deductible​

Roth IRA Phase-Out Based on MAGI

Married - Filing jointly

$184,000 - $194,000

Married - Filing Separately

$0 - $10,000

All Others

$117,000 - $132,000

Qualified Plans

401(k), 403 (b), 457(b) Salary Deferral

$18,000

Age 50+ catch up

$6,000

Defined Contribution Plan Limit

$53,000

SEP Contribution

Lesser of $53,000 or 25% of comp

SIMPLE salary deferral

$12,500

Age 50+ catch up

$3,000

Maximum annual additions in a defined contribution plan

$53,000

Maximum annual benefit in defined benefit plan

$210,000

Maximum compensation considered

$265,000

Highly compensated employee

$120,000

Key Employee / Officer

$170,000

Special Catch-up rules applies to certain 403(b) contributors with 15 or more years of service and governmental 457(b) participants in the last 3 years before retirement.


2015

Income Taxes

Federal Income Taxes

Single Filing

Taxable Income

Tax rate

$0 - $9,275

10.00%

$9,275 - $37,650

15.00%

$37,650 - $91,150

25.00%

$91,150 - $190,150

28.00%

$190,150 - $413,350

33.00%

$413,350 - $415,050​

35.00%

Over $415,050​

39.60%​

Married Filing jointly

Taxable Income

Tax Rate

$0 - $18,550

10.00%

$18,550 - $75,300

15.00%

$75,300 - $151,900

25.00%

$151,900 - $231,450

28.00%

$231,450 - $413,350

33.00%

$413,350 - $466,950

35.00%

Over $466,950

39.60%​

Married Filing Separately

Taxable Income

Tax Rate

$0 - $9,275

10.00%

$9,275 - $37,650

15.00%

$37,650 - $75,950

25.00%

$75,950 - $115,725

28.00%

$115,725 - $206,675

33.00%

$206,675 - $233,475

35.00%

Over $233,475

39.60%​

Head of Household

Taxable Income

Tax Rate

$0 - $13,250

10.00%

$13,250 - $50,400

15.00%

$50,400 - $130,150

25.00%

$130,150 - $210,800

28.00%

$210,800 - $413,350

33.00%

$413,350 - $441,000

35.00%

Over $441,000

39.60%​

Trusts and Estates

Taxable Income

Tax Rate

$0 - $2,550

15.00%

$2,550 - $5,950

25.00%

$5,950 - $9,050

28.00%

$9,050 - $12,400

33.00%

Over $12,400

39.60%​

Capital Gains & Dividends

Income Tax Bracket

Tax Rate

0 - 15%

0%

20 - 35%

15%

39.6%

20%


2015

Federal Tax Deductions

Standard Deductions

Single

$6,300

Married filing jointly

$12,600

Married filing separately

$6,300

Head of household

$9,300

Personal exemption

$4,050

Kiddie tax

$1,050

Student Loan Interest Deduction

The maximum deduction for student loan interest is $2,500. The deduction is phased out according to this table.

Single return phase-out

$65,000 - 80,000

Joint return phase-out

$130,000 - 160,000


2015

Federal Estate Tax and Gift Tax

Annual gift tax exclusion

$14,000

Unified credit exemption

$5,450,000

Gift to non-citizen spouse

$148,000

Highest estate tax bracket

40%

State Estate Tax

States with separate estate tax

CT, DC, DE, HI, IL, MA, MD, ME, MN, NJ, NY, OR, RI, VT, WA

States with inheritance tax

IA, IN, KY, MD, NE, NJ, PA

Community property states

AK*, AZ, CA, ID, LA, NM, NV, TX, WA, WI

* Opt-in community property state


2015

Education Incentives

Phase-Out for American Opportunity Credit / Hope Scholarship Credit

Married filing jointly

$160,000 - $180,000

Others

$80,000 - $90,000

Phase-Out for Lifetime Learning Credits

Married filing jointly

$55,000 - $65,000

Others

$111,000 - $131,000

Phase-Out for Exclusion of US Savings Bond Income

Married filing jointly

$116,300 - $146,300

Others

$77,550 - $92,550

Phase-Out for Coverdell Education Savings Accounts

Married filing jointly

$190,000 - $220,000

Others

$95,000 - $110,000

Contribution Limit

$2,000​

Annual Contribution Limit (per child before gift tax)

$14,000

Accelerated contribution (5 years contributed in 1 year)

$70,000

Couple contribution limit

$140,000


2015

Social Security

Taxable Wage Base

Social Security (OASDI)

$118,500

Medicare (HI only)

No Limit​

Retirement Earning Test

Under Full Retirement Age*

$118,500

At full retirement age**

No Limit​

* One dollar of benefits will be withheld for every $2 in earnings above the limit.

** Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.

Taxability of Benefits

Individual

Married Filing Jointly

Not Taxable

Less than $25,000

Less than $32,000

Up to 50% taxable

$25,000 - $34,000

$32,000 - $44,000

Up to 85% taxable​

Greater than $34,000​

Greater than $44,000

* Provisional Income = Adjusted Gross Income + Non-taxable Income + 1/2 Social Security Benefits

Age to Receive Full Benefits

​Birth Year

Full Retirement

% Reduced at Age 62

1943 - 1954

66

25%

1955

66 and 2 months

25.83%

1956

66 and 4 months

26.67%

1957

66 and 6 months

27.5%

1958

66 and 8 months

28.33%

1959

66 and 10 months

29.17%

1960 to present

67

30%

Delayed Retirement Credits

Birth Year

Annual Rate of Increase

1943 or later

8.00%

Accrues when you reach full retirement age until you start receiving benefits or reach age 70.


2015

Miscellaneous Tax

Health Savings Accounts

Contribution Limits

Single

$3,350

Family

$6,750

Catch up at age 55+

$1,000

High Deductible Health Plans

Minimum deductible single

$1,300

Minimum deductible family

$2,600

Maximum out of pocket single

$6,550

Maximum out of pocket family

$13,100

Unearned Income Medicare Contribution Tax

Filing Status

MAGI

Rate

Single File

$200,000+

3.8%

Head of household

$200,000+

3.8%

Married filing jointly

$250,000+

3.8%

Married filing separately

$125,000

3.8%

Trusts and Estates​

$12,500

3.8%

FICA Tax Rates

Self Employed

Employee

OASDI (Social Security)

12.4%

6.2%

HI (Medicare)

2.9%

1.45%

Additional Medicare Tax*

0.9%

0.9%

* Beginning in 2013, the additional medicare tax applied to wages and self-employment income above the following thresholds:

Filing Status

Wages or Self-Employment Income above the MAGI threshold

Married Jointly

Above $250,000

Married Separately

Above $125,000

Other

Above $200,000



About Innovative Advisory Group: Innovative Advisory Group, LLC (IAG), an independent Registered Investment Advisory Firm, is bringing innovation to the wealth management industry by combining both traditional and alternative investments. IAG is unique in that they have an extensive understanding of the regulatory and financial considerations involved with alternative investments held in self directed IRAs and other retirement accounts. IAG advises clients on traditional investments, such as stocks, bonds, and mutual funds, as well as advising clients on alternative investments. IAG has a value-oriented approach to investing, which integrates specialized investment experience with extensive resources.

For more information you can visit: Innovative Advisory Group

About the author: Kirk Chisholm is a Wealth Manager and Principal at Innovative Advisory Group. His roles at IAG are co-chair of the Investment Committee and Head of the Traditional Investment Risk Management Group. His background and areas of focus are portfolio management and investment analysis in both the traditional and alternative investment markets. He received a BA degree in Economics from Trinity College in Hartford, CT.

Disclaimer:  This article is intended solely for informational purposes only, and in no manner intended to solicit any product or service. The opinions in this article are exculsively of the author(s) and may or may not reflect all those who are employed, either directly or indirectly or affiliated with Innovative Advisory Group, LLC.

 

  1. Pingback: On The Rise – Market Thoughts | Percension Wealth Advisors, LLC