Federal Tax Changes 2015
Posted Monday, November 10, 2014 by John S. Palmer
Here is a summary of some of the adjustments being made to various federal gift, estate and income tax provisions effective January 1st.
Estate Tax Exclusion Amount: The lifetime exclusion amount for the estate of any decedent dying during calendar year 2015 will be $5,430,000 (the lifetime exclusion amount of $5 million adjusted for inflation), an increase of $90,000 from 2014.
Annual Exclusion for Gifts: For 2015 the amount that may be gifted without gift tax consequences (i.e., may be excluded from total taxable gifts reported for the year) will remain at $14,000 in aggregate gifts to each individual donee by the taxpayer/donor.
Gifts to Non-Citizen Spouses: The first $147,000 of gifts to a non-citizen spouse need not be included in the total taxable gifts reported for 2015, a $2,000 increase over 2014.
Notice of Large Gifts Received from Foreign Persons: For 2015 recipients of gifts from certain foreign persons will need to report the gifts if their aggregate value exceeds $15,601; this is a slight increase in the reporting threshold.
Deduction for Long Term Care Insurance Premiums: The Health Reform Act expressly includes eligible long-term care insurance premiums in the definition of deductible medical care. The amount that may be deducted in 2015 ranges from $380 for taxpayers age 40 or under, up to $4,750 for taxpayers over age 70, all subject to the general requirement that overall medical expenses exceed 7.5% of adjusted gross income.
Kiddie Tax: For 2015, the unearned income of minor children (and in some cases, students up to age 23) in excess of $2,100 will be taxed at the parents’ tax rate, if it is higher than the child’s. This is to discourage parents from trying to reduce their taxes by shifting investment income to their children. The first $1,050 in a child’s unearned income is tax free, and the next $1,050 is taxed at the child’s rate. After that, any additional unearned income is taxed at the parents’ rate.
Standard Deduction: The standard deduction for income tax purposes in 2015 will be $6,300 for unmarried individuals and married persons filing separately; $9,250 for heads of household, and $12,600 for married persons filing joint returns.
Personal Exemption Amount: In 2015 the personal exemption for income tax purposes will be $4,000.
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