Filing tax returns can be a daunting task, and once the taxpayer has filed for the current tax year, they need to start anticipating and preparing for the following tax year. It’s a never-ending cycle; and as this year comes to an end, here is an estimation of the tax brackets for 2016 based on the inflation report released by the U.S. Bureau of Labor Statistics, and estimated tax rates reports prepared by Bloomberg BNA, and Thomson Reuters, which may help taxpayers plan and prepare for their year-end tax filing requirements accordingly.
As per these reports, taxpayers can expect a slightly reduced tax burden, especially those with the same level of income as in the previous year, as they could be subject to an effectively lower tax rate due to the inflation adjustment.
Please note that these are estimated figures, and not the actual tax rates, which should be used only for the purposes of tax planning, and not to file actual tax returns until the tax rates/brackets are confirmed by the U.S. Internal Revenue Service (IRS).
Single Filers |
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| Tax Rate | Taxable Income – 2015 | Taxable Income – 2016 | Expected Tax Due |
| 10% | $0 – $9,225 | $0 – $9,275 | 10% of the taxable income |
| 15% | $9,226 – $37,450 | $9,276 – $37,650 | Above $927.50 |
| 25% | $37,451 – $90,750 | $37,651 – $91,150 | Above $5,183.75 |
| 28% | $90,751 – $189,300 | $91,151 – $190,150 | Above $18,558.75 |
| 33% | $189,301 – $411,500 | $190,151 – $413,350 | Above $46,278.75 |
| 35% | $411,501 – $413,200 | $413,351 – $415,050 | Above $119,934.75 |
| 39.6% | $413,201+ | $415,051+ | Above $120,529.75 |
Married Filing Separately |
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| Tax Rate | Taxable Income – 2015 | Taxable Income – 2016 | Expected Tax Due |
| 10% | $0 – $9,225 | $0 – $9,275 | 10% of the taxable income |
| 15% | $9,226 – $37,450 | $9,276 – $37,650 | Above $927.50 |
| 25% | $37,451 – $75,600 | $37,651 – $75,950 | Above $5,183.75 |
| 28% | $75,601 – $115,225 | $75,951 – $115,725 | Above $14,758.75 |
| 33% | $115,226 – $205,750 | $115,726 – $206,675 | Above $25,895.75 |
| 35% | $205,751 – $232,425 | $206,676 – $233,475 | Above $55,909.25 |
| 39.6% | $232,426+ | $233,476+ | Above $65,289.25 |
Married Filing Joint or Surviving Spouse |
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| Tax Rate | Taxable Income – 2015 | Taxable Income – 2016 | Expected Tax Due |
| 10% | $0 – $18,450 | $0 – $18,550 | 10% of the taxable income |
| 15% | $18,451 – $74,900 | $18,551 – $75,300 | Above $1,855 |
| 25% | $74,901 – $151,200 | $75,301 – $151,900 | Above $10,367.50 |
| 28% | $151,201 – $230,450 | $151,901 – $231,450 | Above $29,517.50 |
| 33% | $230,451 – $411,500 | $231,451 – $413,350 | Above $51,791.50 |
| 35% | $411,501 – $464,850 | $413,351 – $466,950 | Above $111,818.50 |
| 39.6% | $464,851+ | $466,951+ | Above $130,578.50 |
Head of Household |
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| Tax Rate | Taxable Income – 2015 | Taxable Income – 2016 | Expected Tax Due |
| 10% | $0 – $13,150 | $0 – $13,250 | 10% of the taxable income |
| 15% | $13,151 – $50,200 | $13,251 – $50,400 | Above $1,325 |
| 25% | $50,201 – $129,600 | $50,401 – $130,150 | Above $6,897.50 |
| 28% | $129,601 – $209,850 | $130,151 – $210,800 | Above $26,835 |
| 33% | $209,851 – $411,500 | $210,801 – $413,350 | Above $49,417 |
| 35% | $411,501 – $439,000 | $413,351 – $441,000 | Above $116,258.50 |
| 39.6% | $439,001+ | $441,001+ | Above $125,936 |
The ‘Standard Deduction’ amount remains the same as it was in the year 2015, i.e. $12,600 for Married filing Joint, $6,300 for Married filing Separately and Single, however, there would be an increase of $50 for the Head of Household tax filing status, making the standard deduction amount $9,300 for 2016.
The standard deduction for dependents and personal exemption amounts are expected to remain the same for the year 2016.
Please be advised that these figures are provided for initial tax planning purposes only. Actual rates could vary and thus revisiting the plan once the actual amounts are announced is recommended.
AG TAX LLP Can Help
If you have any queries regarding the estimated tax rates, or any other tax-related queries, and/or need assistance/help with tax planning/filing please contact AG Tax. Our tax professionals are highly-experienced with U.S. and Canadian tax laws and can provide you with the right guidance to handle your unique tax situation.
Aylett Grant Tax LLP is a full service accounting firm with a dedicated team of experts, who are highly-qualified and experienced in handling situations related to U.S., Canada and other international tax laws.
We can assist with:
- Canadian Personal and corporate tax returns
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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.
