2015 tax rates: It always pays to plan ahead — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

2015 tax rates: It always pays to plan ahead

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Employees can take a lot of the guesswork out of their 2015 income tax liability by ensuring that their W-4s are accurate. Those who need to file new forms because their personal exemptions and itemized deductions will be phased out now have the inflation-adjusted figures on which to base those decisions. Low-income employees may qualify for the earned income tax credit. (Rev. Proc. 2014-61, IRB 2014-47)

(Editor's note: Our step-by-step compliance guide to each pay period, month and calendar quarter of the upcoming year is a free and indispensable checklist for payroll pros. Download it here.)

Standard deductions and phase-out amounts. The 2015 standard deduction amounts are:

  • Singles and marrieds filing separately: $6,300
  • Marrieds filing jointly: $12,600
  • Heads of households: $9,250
  • Dependents: the greater of $1,050 or the sum of $350 and their earned income
  • Extra standard deduction for aged or blind: $1,550 (singles) or $1,250 per eligible spouse (marrieds filing jointly).

The income limits at which personal exemptions and itemized deductions must be phased out also change for 2015. For joint filers, both limits start at $309,900; for single taxpayers, both limits start at $258,250.

Earned income tax credit. Depending on family size and wages, low-income employees may qualify for the earned income tax credit. The credit is phased out at certain income levels.

• One child: The maximum credit is $3,359. The credit begins to be phased out for income exceeding $18,110 (singles) or $23,630 (joint filers), and is completely phased out when wages exceed $39,131 (singles) or $44,651 (joint ­filers).

• Two children: The maximum credit is $5,548. The credit begins to be phased out for income exceeding $18,110 (singles) or $23,630 (joint filers), and is completely phased out when wages exceed $44,454 (singles) or $49,974 (joint ­filers).

• Three or more children: The maximum credit is $6,242. The credit begins to be phased out for income exceeding $18,110 (singles) or $23,630 (joint filers), and is completely phased out when wages exceed $47,747 (singles) or $53,267 (joint filers).

• No children: The maximum credit is $503. The credit begins to be phased out for income exceeding $8,240 (singles) or $13,750 (marrieds filing jointly), and is completely phased out when wages exceed $14,820 (singles) or $20,330 (joint filers).

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