2016 Federal IRS Tax Brackets, Tax Rates and Other Tax Updates Including 2017 Projected Tax Brackets

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With the continued low inflation environment 2016 IRS Tax Brackets, standard deductions and personal exemptions (for taxes paid in 2017) only moderately increase over 2015 levels. Federal income tax brackets and related tax items are adjusted annually, under the tax code, to provide for mandatory adjustments based on inflation. The tables below reflect the latest IRS information.

2016 Federal Tax Rates and IRS Marginal Tax Brackets

Tax RateSingleMarried Filing JointlyMarried Filing SeparateHeads of Households
10%$0 – $9,275$0 - $18,550$0 – $9,275$0-$13,250
15%$9,275 – $37,650$18,551 - $75,300$9,275 – $37,650$13,251-$50,400
25%$37,651 - $91,150$75,301 - $151,900$37,651 - $75,950$50,401-$130,150
28%$91,151 – $190,150$151,901 - $231,450$75,951 – $115,275$130,151-$210,800
33%$190,151 - $413,350$231,451 - $413,350$115,276 - $206,675$210,801-$413,350
35%$413,351 - $415,050$413,351 - $466,950$206,676 - $233,475$413,351-$441,000
39.6%over $415,050over $466,950over $233,475over $441,000
Personal Exemption$4,050$4,050$4,050$4,050
Std Deduction$6,300$12,600$6,300$9,300
Key 2016 tax updates:

  • Marginal tax rates will remain the same as last year with 39.6% being the highest marginal tax rate. But since tax brackets ranges will increase, people with no income increases will actually see a lower marginal tax rate (see this article for details on this effect). The table above list the detailed changes for each marginal tax bracket – 10, 15, 25, 28, 33, 35 and 39.6 percent
  • The standard deduction rose by $50 for heads of household, but stayed the same in 2016 for single filers  and married people filing separate returns ($6,300).  Married couples filing jointly’s standard deduction also stay flat in 2016 at $12,600.
  • The personal exemption rose by $50.  However, the exemption is subject to a phase-out (per laws enacted a few years ago) that begins with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly). It phases out completely at $381,900 ($433,800 for married couples filing jointly.)
  • The Alternative Minimum Tax (AMT) exemption rose marginally in line with inflation. For tax year 2016, the AMT exemption for single filers  is $53,900 and begins to phase out at $119,700. For married couples filing jointly the AMT exemption is $83,800 and begins to phase out at $159,700. For tax year 2016, the 28 percent AMT tax rate applies to taxpayers with taxable incomes above $186,300 ($93,150 for married individuals filing separately).
  • The maximum Earned Income Credit (EIC) will increased moderately relative to other tax credits given the number of low income people that depend on this. The EITC s $6,269 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,242 for tax year 2015.
  • The gift tax exclusion will remain at $14,000
  • Flexible spending arrangements (FSA) employee contribution limits will rise by $50 to $2,600 as mandated in the new Affordable Care Act.

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[Updated October 2017] Projected 2017 Tax Brackets

Based on the latest inflation data (CPI Bloomberg BNA has projected inflation-adjusted tax brackets and amounts for 2017. This is shown in the table below. I will update once official IRS figures are released later this year.

2017 Projected Federal Tax Rates and IRS Marginal Tax Brackets

Tax RateSingleMarried Filing JointlyMarried Filing SeparateHeads of Households
10%$0 – $9,325$0 - $18,650$0–$9,325$0-$13,350
15%$9,326 – $37,950$18,651 - $75,900$9,376–$37,950$13,351-$50,800
25%$37,951 - $91,900$75,901 - $153,100$37,951-$76,550$50,801-$131,200
28%$91,901 – $191,650$153,101 - $233,350$76,551-$116,675$131,201-$212,500
33%$190,651 - $416,700$233,351 - $416,700$116,676-$208,350$212,501-$416,700
35%$416,701 - $418,400$416,701 - $470,700$208,351-$235,350$416,701-$444,550
39.6%over $418,400over $470,700over $235,350over $444,550
Personal Exemption$4,050$4,050$4,050$4,050
Std Deduction$6,350$12,700$6,350$9,350

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2 Comments on "2016 Federal IRS Tax Brackets, Tax Rates and Other Tax Updates Including 2017 Projected Tax Brackets"


Chuck Cumberworth
Wednesday 12:20 pm

The spelling of “filing’ is misspelled in your chart column headers on this page. It is spelled correctly in the text info but not in the headers.

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