SAMPLE. Pocket Tables. Income Tax Rates Deductions Retirement Plan Limits Gift and Estate Tax Rates Medicare Premiums Social Security Benefits

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1 2016 Pocket Tables Income Tax Rates Deductions Retirement Plan Limits Gift and Estate Tax Rates Medicare Premiums Social Security Benefits Life Tables

2 2016 Pocket Tables Although no new major tax legislation was enacted in 2015, U.S. taxpayers are still affected by cost-of-living adjustments to the thresholds for individual income tax rates and retirement plan contributions. In addition, taxpayers will see another substantial increase in the penalties for failing to obtain qualified health care coverage under the Affordable Care Act in The 2016 Pocket Tables contains the information individuals and businesses need to begin preparing for these changes. While focused on the changes for 2016, the 2016 Pocket Tables also includes corresponding numbers for CONTENTS Page 2016 Federal Individual Income Tax Rates Federal Individual Income Tax Rates 2 Standard Deductions and Personal and Dependency Exemptions 3 Federal Alternative Minimum Tax 3 Education Exclusions, Deductions, Credits 4 Child Tax Credit 4 Kiddie Tax 4 Adoption Credit 4 Federal Tax on Capital Gains and Qualified Dividends 5 Federal Net Investment Income Tax 5 Federal Tax on Corporate Income 5 Health Savings Accounts 5 Business Deductions, Credits, and Fringe Benefits 6 Benefit, Contribution, and Compensation Limits for Qualified Plans 7 IRA and Employee Contribution Limits 7 Catch-Up Contribution Limits 7 IRA Phaseouts 8 Required Minimum Distributions 8 Comparing IRA Options 10 Affordable Care Act Penalties and Credits 10 Qualified Long-Term Care Insurance Premiums 11 Federal Estate Tax Formula 2016 and Federal Gift Tax Formula 2016 and Federal Gift and Estate Tax Amounts 12 Federal Gift and Estate Tax 2016 and Medicare Premium and Cost-Sharing Amounts 12 Social Security Tax 13 Social Security Eligibility Figures 13 Social Security OASDI Benefits 13 Results of $1,000 Invested ly 14 United States Life Tables, Rate History 15 IRS Table 2001: One-Year Term Premiums POCKET TABLES 2016 by Kaplan, Inc. All rights reserved. No part of this publication may be reproduced without written consent from the publisher. The information in Pocket Tables is summary in nature and is current only as of January 22, Users of this publication are advised to refer to the relevant legislation or other applicable materials to ensure accuracy and comprehensive coverage of the applicable material. Further, changes to legislation or applicable administrative actions that become effective after that date may make the information provided in this publication no longer current. For information, contact: 332 Front St. S., Suite 501 La Crosse, WI PPN: ISBN:

3 2016 Federal Individual Income Tax Rates Single Individuals Over But Not Over Tax + % on Excess Of the Amount Over $0 $9,275 $ % $0 9,275 37, % 9,275 37,650 91,150 5, % 37,650 91, ,150 18, % 91, , ,350 46, % 190, , , , % 413, , , % 415,050 Joint Returns and Surviving Spouses $0 $18,550 $ % $0 18,550 75,300 1, % 18,550 75, ,900 10, % 75, , ,450 29, % 151, , ,350 51, % 231, , , , % 413, , , % 466,950 Heads of Households $0 $13,250 $ % $0 13,250 50,400 1, % 13,250 50, ,150 6, % 50, , ,800 26, % 130, , ,350 49, % 210, , , , % 413, , , % 441,000 Married Filing Separate Returns $0 $9,275 $ % $0 9,275 37, % 9,275 37,650 75,950 5, % 37,650 75, ,725 14, % 75, , ,675 25, % 115, , ,475 55, % 206, , , % 233,475 Estates and Trusts $0 $2,550 $ % $0 2,550 5, % 2,550 5,950 9,050 1, % 5,950 9,050 12,400 2, % 9,050 12, , % 12,400 1

4 Comparing IRA Options Question Traditional IRA Roth IRA Are there income limits on the ability to make nondeductible contributions? No. Yes. Phaseouts for single filers: $117,000 $132,000 for 2016 ($116,000 $131,000 for 2015); for joint filers: $184,000 $194,000 for 2016 ($183,000 $193,000 for 2015). Is there an annual contribution limit? Are contributions deductible? How are withdrawals taxed after age 591/2? Yes, $5,500* per person to all IRAs for 2016 and Yes, for nonparticipants in an employer plan. For others, contributions may be deductible depending on income level (see IRA Phaseouts on page 8). Withdrawals are subject to tax. Exception: pro rata share of nondeductible contributions. Yes, $5,500* per person to all IRAs for 2016 and No. All contributions are nondeductible, aftertax contributions. Withdrawals are tax free if account is held 5 years. Contributions are withdrawn tax free at any time. How are withdrawals taxed before age 591/2? Withdrawals are subject to tax. A 10% penalty is added except in the case of: death; disability; substantially equal periodic payments; first home purchase (up to $10,000); qualified higher education expenses; unreimbursed medical expenses; health insurance for unemployed; qualified reservist distributions; or pro rata share of nondeductible contributions. * May be increased by $1,000 for individuals age 50 or over. Contributions are withdrawn tax free. Withdrawals of earnings from accounts held 5 years are tax free in the case of: death; disability; or first home purchase (up to $10,000). Withdrawals of earnings are subject to tax but no penalty in the case of: substantially equal periodic payments; qualified higher education expenses; unreimbursed medical expenses; health insurance for unemployed; or qualified reservist distributions. All other withdrawals of earnings are subject to tax plus 10% penalty. Affordable Care Act Penalties and Credits Individuals: In 2016, taxpayers who are not covered by health insurance that meets certain minimum requirements may have to pay a tax penalty equal to the greater of $695 per adult ($ per child under age 18; maximum penalty per family under this method is $2,085) or 2.5% of their annual modified adjusted gross income above their filing threshold (up from $325 per adult/$ per child or 2% of AGI in 2015). The penalty is prorated for partial-year coverage. Individuals who buy coverage on a government exchange are eligible for a credit to help offset their premium costs if their income falls below 400% of the federal poverty line. For 2016, those income limits are $47,080 for an individual, $63,720 for a family of two, and $97,000 for a family of four. Businesses: In 2016, employers with 50 or more full-time employees may have to pay a penalty if they do not offer qualifying health insurance to at least 95% of full-time employees and their dependents. If an employee obtains coverage on a health insurance exchange using a tax credit, the penalty is $2,000 for each employee in excess of 30 employees. An employer with fewer than 25 employees who earn less than $51,800 a year may get a tax credit of up to 50% of its premium costs (35% for tax-exempt employers) if it pays at least half the premium for qualifying health insurance coverage. 9

5 Year Rate History (Based on the Consumer Price Index)* Year Year Period Ending Total for Period (%) Average for Period (%) (10-year period) (20-year period) (30-year period) (40-year period) * The consumer price index used is the CPI-U for all urban consumers as reported by the National Bureau Labor Statistics. The figure for the most recent year includes the period September 2014 to September IRS Table 2001: One-Year Term Premiums for $1,000 of Life Insurance Protection The IRS currently uses Table 2001 to value the economic benefit provided to an employee when life insurance is provided by an employer. The premium listed represents the assumed cost of $1,000 of term insurance. Age Premium Age Premium Age Premium 31 $ $ $