2016 Tax Data You Can Use – Income Tax Exemptions

Today

Like it or not, taxes are part of life. Each year the IRS releases important inflation adjusted tax numbers that could impact your taxes. Understanding them could help your tax-saving strategy.

income 1

income 2

 

“Kiddie” Tax Children under age 18; children under age 19 with earned income less than ½ of support; dependent full-time students under age 24 with earned income less than ½ of support.

Exemptions $2,100** AMT exemption $7,400 plus child’s earned income.

* Exemptions are phased out by 2% for each $2,500, or portion thereof, above specified income thresholds ($259,400 single; $311,300 joint). ** First $1,050 of unearned income offset by standard deduction; next $1,050 of unearned income taxed at child’s rate. Amounts over $2,100 of unearned income are taxed at the parent’s rate.