Earlier this month, AG Tax provided a summary of the estimated tax brackets for 2014, together with certain inflation-sensitive tax figures, such as personal exemption, the standard deduction, and tax benefits. The IRS has now confirmed these rates.
Inflation causes a rise in the price levels of goods and services over a period of time and lowers taxpayers’ purchasing power per unit of money. The IRS acknowledges the effect of yearly inflation, and implements mandatory upward inflation-adjustments each year.
To help taxpayers with better tax planning for 2014, AG Tax professionals have prepared a brief summary on the figures.
Confirmed Inflation-Adjusted 2014 Tax Brackets
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| Tax Rates | Married Filing Jointly/ Surviving Spouse | Head of household | Single | Married Filing Separately |
| 10% | $0 – $18,150 | $0 – $12,950 | $0 – $9,075 | $0 – $9,075 |
| 15% | $18,150 – $73,800 | $12,950 – $49,400 | $9,075 – $36,900 | $9,075 – $36,900 |
| 25% | $73,800 – $148,850 | $49,400 – $127,550 | $36,900 – $89,350 | $36,900 – $74,425 |
| 28% | $148,850 – $226,850 | $127,550- $206,600 | $89,350 – $186,350 | $74,425 – $113,425 |
| 33% | $226,850 – $405,100 | $206,600 -$405,100 | $186,350 – $405,100 | $113,425 – $202,550 |
| 35% | $405,100 – $457,600 | $405,100- $432,200 | $405,100 – $406,750 | $202,550 – $228,800 |
| 39.6% | Above $457,600 | Above $432,000 | Above $406,750 | Above $228,800 |
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Other 2014 Projected Exemptions, Deductions and Thresholds
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| Projected Figures | Married Filing Jointly/ Surviving Spouse | Head of household | Single | Married Filing Separately |
| Personal Exemption | $3590 per person | $3,590 per person | $3,590 per person | $3,590 per person |
| Standard Deduction | $12,400 | $9,100 | $6200 | $6,200 |
| Itemized Deductions Phase-out AGI Thresholds | $305,050 | $279,650 | $254,200 | $152,525 |
| AMT Exemptions Thresholds | $82,100 | $52,800 | $52,800 | $41,050 |
| Roth IRA Contribution Limits – AGI Thresholds | $181,000 | $114,000 | $114,000 | $114,000 |
| Traditional IRA Contribution – Maximum Amounts | $5,500 | $5,500 | $5,500 | $5,500 |
| Student Loan Interest Deduction Phase-out AGI Thresholds | $160,000 | $80,000 | $80,000 | $80,000 |
| Annual Gift Tax Exemption | $14,000 | $14,000 | $14,000 | $14,000 |
| Lifetime Gift Tax Exemption | $5,340,000 | $5,340,000 | $5,340,000 | $5,340,000 |
| Foreign Gift Exemption | $15,358 per person | $15,358 per person | $15,358 per person | $15,358 per person |
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Taxpayers in the higher tax brackets will also be facing the 3.8% Surtax/ NIIT (details) and a 0.9% Medicare contributions tax on earned income. The 3.8% surtax is bound to affect the tax bracket of an U.S taxpayer. It is advisable that with 2014 just one quarter away, taxpayers should schedule a meeting with their tax advisors and get their tax plans in place.
AG Tax LLP Can Help
If you have any tax-related queries, need assistance with tax planning or filing your tax returns please contact us. Our team comprises of highly experienced tax professionals with extensive knowledge of U.S. and Canadian tax laws as well as cross-border compliance
Furthermore, as a full service accounting firm, AG Tax assures complete assistance with even your most complex tax needs.
We can assist with:
- Canadian Personal and corporate tax returns
- Cross Border Taxation and Business Planning
- U.S. Personal and Corporate Taxation
- Disclosure of Foreign Assets and other information filings
- Retirement planning
- State Sales Tax & E-commerce Taxation
- Estate Planning, Inheritance tax advice
To obtain a quote or to arrange for a consultation to discuss your tax related queries, please contact us at:
- 416-238-5920 (Greater Toronto Area, ON)
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Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.
