We still have two months left of 2014, but that does not meant that we can’t start thinking about 2015, right? The IRS has released its 2015 inflation adjustments for over 40 different tax provisions and the 2015 tax tables. Included in the adjustments are the adjusted personal exemption and standard deduction amounts. For 2015, the personal exemption will rise from $3,950 in 2014 to $4,000. The standard deduction increased from $6,200 to $6,300 for singles and from $12,400 to $12,600 for married filing jointly in 2015. The adoption credit, lifetime learning credits, and earned income credits, among others, also were inflation adjusted for 2015.
The IRS has also released its adjustments to retirement-related items were also announced by the IRS. The elective deferral amount for those contributing to 401(k), 403(b), and TSP plans was increased from $17,500 in 2014 to $18,000 in 2015. The catch up contribution for those 50 and over was increased to $6,000 in 2015, from $5,500 in 2014. The IRA contribution limits were not adjusted and remain at $5,500.
While these numbers may not mean a whole lot to you now, it is important to take note and understand these changes so that you can be prepared for their impact to 2015. This is especially important for those who are currently in their open enrollment and adjustment period at their workplace as adjustments to 401(k) contributions can be done with the new thresholds in mind. If you have any questions, please feel free to contact me.