The IRS recently released the following information for the 2016 tax year.
The top tax rate of 39.6% now applies to single taxpayers earning more than $415,050 ($466,950 for married taxpayers filing jointly)-up from the 2015 thresholds of $413,200 and $464,850, respectively.
Here are the other major adjustments:
If you are Single…
| If your taxable income is… | You owe… |
|---|---|
| $0-$9,275 | 10% of your taxable income |
| $9,275-$37,650 | $927.50 + 15% of anything over $9,275 |
| $37,650-$91,150 | $5,183.75 + 25% of anything over $37,650 |
| $91,150-$190,150 | $18,558.75 + 28% of anything over $91,150 |
| $190,150-$413,350 | $46,278.75 + 33% of anything over $190,150 |
| $413,350-$415,050 | $119,934.75 + 35% of anything over $413,350 |
| $415,050 and higher | $120,529.75 + 39.6% of anything over $415,050 |
If you’re married filing jointly or are a surviving spouse…
| If your taxable income is… | You owe… |
|---|---|
| $0-$18,550 | 10% of your taxable income |
| $18,550-$75,300 | $1,855 + 15% of anything over $18,550 |
| $75,300-$151,900 | $10,367.50 + 25% of anything over $75,300 |
| $151,900-$231,450 | $29,517.50 + 28% of anything over $151,900 |
| $231,450-$413,350 | $51,791.50 + 33% of anything over $231,450 |
| $413,350-$466,950 | $111,818.50 + 35% of anything over $413,350 |
| $466,950 and higher | $130,578.50 + 39.6% of anything over $466,950 |
| If your taxable income is… | You owe… |
|---|---|
| $0-$13,250 | 10% of your taxable income |
| $13,250-$50,400 | $1,325 + 15% of anything over $13,250 |
| $50,400-$130,150 | $6,897.50 + 25% of anything over $50,400 |
| $130,150-$210,800 | $26,835 + 28% of anything over $130,150 |
| $210,800-$413,350 | $49,417 + 33% of anything over $210,800 |
| $413,350-$441,000 | $116,258.50 + 35% of anything over $413,350 |
| $441,000 and higher | $125,936 + 39.6% of anything over $441,000 |
For 2016 the standard deduction for heads of household will also rise to $9,300 (up from $9,250 in 2015) but the other standard deduction amounts will remain the same: $6,300 for singles and $12,600 for married couples filing jointly.
Personal exemptions will be $4,050 in 2016, up from $4,000 in 2015. The Alternative Minimum Tax exemption amount in 2016 is $53,900 for singles and $83,800 for married couples filing jointly (up by $300 and $400, respectively, compared to 2015 exemptions).
Other key changes include:
The maximum Earned Income Credit amount is $6,269 for taxpayers filing jointly who have 3 or more qualifying children in 2016, up from $6,242 for 2015.
The monthly limit for the transportation benefits remains $130 for transportation, but rises to $255 for qualified parking in 2016, up from $250 for tax year 2015.
The foreign earned income exclusion is $101,300 for 2016, up from $100,800 in 2015.
Please contact us with any questions you may have on this or any other tax items.
636.498.1900 ext. 118
If you ask Mark Horst, CPA, about his job at Rackers and Fernandez, his first response isn’t about the many years of experience he brings to the table, tax consulting, review, compliance, quality control, financial reporting, or even making sense of highly complicated tax situations. While all of those things are incredibly important and true of Mark’s skill, his first response will always revolve around helping people – supporting them to understand difficult tax and financial concepts, saving them money through effective tax planning, and seeing the happiness that results from this service. His expertise lies in serving small businesses, individuals, and providing consulting services. Prior to joining Rackers and Fernandez, Mark served as a partner and senior accountant at other St. Louis area CPA firms. He earned a BS in accounting from Lindenwood University and is a member of the American Institute of Certified Public Accountants, the Missouri Society of Certified Public Accountants, and a former member of BNI. He has also served as treasurer for Friends of the Wentzville Parks. In his spare time, Mark lives an active life in which he enjoys running, riding bikes, playing sports with his kids, golf, tennis, camping, Cardinal Baseball, home improvement projects, and rocking out to U2, Maroon 5, and Classic Rock.
636.498.1900 ext. 103
As a practicing CPA and partner in Rackers & Fernandez, LLC since 1996, Sergio’s experience extends to all areas of tax planning, research, strategic planning, and compliance for closely held corporations, partnerships, and individuals. He works closely with business owners in connection with their personal and business planning, and holds specialized knowledge of the real estate, automobile dealership, and construction industries. Sergio is also well versed in tax compliance and implementation of accounting software systems and performance measurement services.
Sergio is a member of multiple professional associations, including the American Institute of Certified Public Accountants and the Missouri Society of Certified Public Accountants. He is a firm representative in Driving Force, Rackers & Fernandez’s national association of professional CPA firms, and is a board member for several businesses in the St. Louis and St. Charles county area. He earned a bachelor’s degree in accountancy from Maryville University in St. Louis and is involved in several community organizations, including the following:
- Board member, John E. Simon School of Business Advisory Board for Maryville University
- Board member, Sharing Shed, a nonprofit organization
- Board member, Finance Committee Representative for Lake Forest Country Club
- Member, Marathon Team OE for Opportunity Enterprises, a nonprofit organization whose mission is to promote self-sufficiency and life choices for challenged individuals
- He is also a former Silver Spoke & Bronze Spoke fundraiser for the National Multiple Sclerosis Society
Sergio has also received a number of honors and accolades throughout his career. Most recently, he received a 2016 Beyond the Best in Business Award from Streetscape Magazine which honors local leaders for their impact and positive change in the community. Sergio was also named to St. Charles Business Magazine’s 40 Under 40, Class of 2008-2009.
Sergio enjoys spending time with his wife, four daughters and son. He is actively involved in his Church and enjoys playing golf and participating in triathlons—including completing two Ironman distance events.
Joining the firm in 2010, Larry serves as a Director of Tax, responsible for tax compliance, client and engagement management, staying up-to-date on tax developments, and planning opportunities. Larry brings more than 28 years of public accounting experience to Rackers & Fernandez with expertise in medical, attorney, and real estate niche markets; high net worth taxpayers; and multi-state tax issues. Larry earned a BS in accounting from Sacred Heart University and was a National Honor Society member. He is a former board member with Cancer Care of Connecticut and Monroe Soccer Club. In his off time, he enjoys baseball, golf, travel, movies, and obedience training and showing of dogs.