The 2015 tax filing season is upon us. The University of Alabama’s Lisa McKinney provides some interesting facts to get you up to speed on individual and small business taxes.
- Federal individual income tax rates vary, depending upon income. Rates can be 10 percent, 15 percent, 28 percent, 33 percent, 35 percent or 39.6 percent. The top rate applies to taxable income over $467,000.
- Capital gains and dividends rates range from 0 percent to 20 percent.
- Standard mileage rate is 57.5 cents per business mile
- Child tax credit is $1,000 per child for low and moderate income taxpayers
- Child care credit is $600 to $1,200 for most taxpayers
- Maximum tax-deductible contribution to the Section 401(k) plan is $53,000 per year
- College tuition benefits: $2,500 credit or $4,000 deduction, for low and moderate income taxpayers
- Student loan interest: $2,500 deduction for low and moderate income taxpayers
- Higher income taxpayers with investment income are subject to an additional 3.8 percent net investment income tax (new Medicare tax).
- Premium tax credits are available for those with health insurance in the marketplaces.
- Small business property deduction (Section 179) is $500,000 per year extended and made permanent, to be indexed for inflation in 2016 and forward
- Bonus depreciation on business property was extended to 50 percent of cost, but it will be phased out of existence over the next 5 years.
McKinney is a lecturer in accounting in UA’s Culverhouse College of Commerce.