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2014 Tax Update

Written by Jeffrey Skatoff • January 2nd, 2014

Estate TaxationIncome TaxationEstate Planning

The 2014 tax year brings with it changes in income tax rate threshholds, deductions, exemptions, and new estate tax and gift tax exemptions amounts.

Income Tax Rate for 2014

The income tax rate of 39.6 percent affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return), up from $400,000 and $450,000, respectively from 2013. 

Income Tax Deductions for 2014

The standard deduction rises to $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly, up from $6,100 and $12,200, respectively, for tax year 2013. The standard deduction for heads of household rises to $9,100, up from $8,950.  The limitation for itemized deductions claimed on tax year 2014 returns of individuals begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).

Personal Exemptions for 2014

The personal exemption rises to $3,950, up from the 2013 exemption of $3,900. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $254,200 ($305,050 for married couples filing jointly). It phases out completely at $376,700 ($427,550 for married couples filing jointly.)

AMT Exemptions for 2014

The Alternative Minimum Tax exemption amount for tax year 2014 is $52,800 ($82,100, for married couples filing jointly). The 2013 exemption amount was $51,900 ($80,800 for married couples filing jointly).

Estate Tax Exemptions for 2014

Estates of decedents who die during 2014 have a basic exclusion amount of $5,340,000, up from a total of $5,250,000 for estates of decedents who died in 2013.  The annual exclusion for gifts remains at $14,000 for 2014.