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Income Tax 2014

U.S. Paywizard.org - find here the federal tax income tax rates for 2014, including the deductions and exemptions - Social Security Tax and Medicare Tax.

2014 Federal Individual Income Tax Rates, Deductions and Exemptions

Tax return due: Wednesday April 15, 2015, unless you file an extension with form 4868 to push the deadline 6 months later to October 15, 2015.

You have to pay federal income tax and on top of that state and local income tax in most states. Your tax bracket depends upon your income and your tax-filing classification.

There are seven federal income tax brackets (ranging from 10% to 39.6%), the brackets per state vary. There are five classifications: SingleMarried Filing JointlyQualified Widow or Widower, Married Filing Separately, and Head of Household.

2014 Individual Federal Income Brackets and Tax Rates

Marginal
Tax Rate
SingleMarried Filing
Jointly or qualifying widow(er)
Married Filing
Separately
Head of
Household
10% $0 - $9,075 $0 - $18,150 $0 - $9,075 $0 - $12,950
15% $9,076 - $36,900 $18,151 - $73,800 $9,076 - $36,900 $12,951 - $49,400
25% $36,901 - $89,350 $73,801 - 148,850 $36,901 - $74,425 $49,401 - 127,550
28% $89,351 - $186,350 $148,851 - $226,850 $74,426 - $113,425 $127,551 - $206,600
33% $186,351 - $405,100 $226,851 - $405,100 $113,426 - $202,550 $206,601 - $405,100
35% $405,101 -$406,750 $405,101 - $457,600 $202,551 - $228.800 $405,101 - $432,200
39.6% $406,751 and more $457,601 and more $228,801 and more $432,201 and more


2014 Exemptions: for yourself (personal exemption), spouse (if you are married) or your dependents: $3,950 per person 

The personal exemption is not a subject to federal income tax, but it is the minimal amount of money you need to get by at a subsistence level.

2014 Personal Standard Deductions

DeductionsSingleMarried Filing jointly 
Married Filing SeparatelyHead of HouseholdDependents
Standard $6,200 $12,400 $6,200 $9,100 $1000 or sum of $350 and dependent's earned income, not to exceed the standard deduction for the dependent's filing status.
Blind/Elderly $1,550 $1,200 $1,200 $1,550

 

How does it work?

Individual tax payers are allowed a choice when preparing their income tax returns. They can itemize their deductions from a list of allowable items and subtract those itemized deductions and their personal exemption deductions from their AGI to get their Taxable Income. Or they can choose to subtract the standard deduction and their personal exemptions. The choice between standard and itemized deduction depends on:

  • a comparison between both types of deductions: what choice gives more money to subtract?
  • do you have kept records of the items you want to subtract? - you need them as prove.
  • if you are filing as 'Married', Filing separately', and your spouse itemizes, you have to do that to.

Option Standard Deduction and Personal Exemptions

Example 1: a single without children pays income tax above a filing threshold of $10,150. This threshold is the Standard Deduction of $6,200 plus the Personal Exemption of $3,950. So, a single would actually pay 0% over the first $10,150 of income. After subtracting this amount from her or his income, the tax brackets  start to work. Over the next $9,075 a single pays 10% tax; 15% over the amount between 9,076 and $36,900 and so on.

Example 2: For a head of household with one dependent child it would be the standard deduction of $9,100 + the Personal Exemption of $3,950 + the Personal Exemption of a Dependent child of $3,950 = a threshold of $17,000.

Example 3: A head of household with one dependent child and one dependent elderly has a threshold of the Standard Deduction of $9,100 + the Personal Exemption of $3,950 + the Personal Exemption for the Dependent Child of $3,950 + the Dependent Elderly of $1,550 = a threshold of $ 18,550.

You can take an exemption for yourself  - the personal exemption - or for your dependents, but you cannot do that if you can be claimed as a dependent by another taxpayer - even if this taxpayer doesn't actually claim you as a dependent. If you are married you can claim an exemption for your spouse filing Jointly or Separately - only if another taxpayer doesn't claim your spouse  as a dependent. You cannot claim a person dependent unless that person is your Qualifying Child or qualifying relative.

You must always list the social security number (SSN) of any dependent for whom you claim an exemption. If you don't list the SSN the exemption could be denied.

2014 Personal Filing Threshold

Filing StatusAge

Threshold, so you must file

when your Gross Income Exceeds

Single Under 65 $10,150
65 or older $11,700
Head Household Under 65 $13,050
65 or older $14,600
Married Filing Jointly Under 65 both spouses $20,300
65 or older one spouse $21,500
65 or older both spouses $22,700
Married Filing Separately any age $3,950

Qualifying Widow(er) with

dependent children

under 65 $16,350

65 or older $17,550

Threshold with number of Blind/Elderly Exemptions


Single
under 65
Married Filing jointly 
under 65
Head of 
Household
0 exemptions blind/elderly $10,150 $20,300 $13,050
1 exemption bind/elderly 11,700 $21,500

$14,600

2 exemptions blind/elderly 13,250 $22,400 $16,850


Personal Exemption Phaseout (PEP)

Personal exemptions used to be subject to phase-out limits, called the personal exemption phaseout (PEP). The phase-out limits didn't apply for the year 2010, 2011 and 2012. The limitations re-surfaced in 2013: 

Filing statusAGI Beginning PhaseoutAGI Completed Phaseout
Single $254,200 $376,700
Married filing jointly $305,050 $427,550
Married filing separately $152,525 $213,775
Head of Household $279,650 $402,150

Earned Income Credit (EITC):

Childless1 child2 children3 or more children
Earned Income Single/Married filing jointly $6,480 $9,720 $13,650 $13,650
Max credit Single/Married filing jointly $496 3,305 $5,460 $6,143
Phaseout (single) $8,110 -$14,590 $17,830 - $38,511 $17,830 - $43,756 $17,830 - $46,997
Phaseout (married filing jointly) $13,540 - $20,020 $23,260 - $43,941 $23,260 - $49,186 $23,260 - $52,427

Itemized Deductions 

The limitation for itemized deductions - the Pease limitations, named after former Rep. Don Pease - will begin with incomes of $254,200 or more ($305,050 for married couples filing jointly).

Adoption Credit: the maximum credit is $13,190. Phaseouts apply for taxpayers with a modified adjusted gross income  over $197,880. The credit is completely phased out with a adjusted gross income of more than $237,880. 

Alternative Minimum Tax (AMT): The AMT thresholds 2014 are $80,000 for married taxpayers filing jointly, $52,800 for single taxpayers and $82,100 for married couples filing jointly. 

American Opportunity Credit: limited to $2,500. Phaseouts apply for the credit beginning with a modified adjusted gross income over $90,000 ($180,000 for married couples filing jointly). Available only for 4 tax years per eligible student and only if that student had not completed the first 4 years of postsecondary education before 2013.

Child Tax Credit: The value used to determine the amount of refundable credit is $3,000 (unchanged).

Flexible Spending Accounts: limit on employee contributions to employer-sponsored healthcare flexible spending accounts (FSA) remains at $2,500.

Hope Scholarship Credit: limited to $2,500. The amount to claim is equal to 100% of qualified tuition and related expenses not in excess of $2,000 plus 25% of those expenses in excess of $2,000 but not to exceed $4,000.

Kiddie Tax: the threshold remains at $1000.

Find more about 2014 taxes at IRS
Or read further at Forbes, TaxesAbout.com and the Tax Policy Center/2