2016 Tax Facts

  1. For 2016, the standard deduction is $6,300 for single individuals and to $12,600 for married couples. You'll benefit by itemizing once allowable deductions exceed the applicable standard deduction. Itemized deductions include medical expenses (over 10% of AGI), state and local income taxes (or sales taxes), real estate taxes, mortgage interest, charitable contributions, investment interest and unreimbursed employee business expenses (over 2% of AGI).
  2. For 2016, the personal exemption is $4,050. You'll claim a personal exemption for yourself, your spouse, and each of your dependents. Note: Personal exemptions are phased out for singles with AGI above $259,400 and marrieds with AGI above $311,300. They phase out completely for singles at $381,900 ($433,800 for married couples filing jointly.)
  3. The maximum earnings subject to social security taxes for 2016 is $118,500.
  4. The standard mileage rate is $.54 per business mile for 2016.
  5. The maximum annual contribution into a 401(k) plan or a 403(b) plan is $18,000 for 2016. And if you’re 50 or older by December 31, 2016 you can contribute an extra $6,000 into your 401(k) or 403(b) account this year through salary deferrals.
  6. The maximum contribution into an IRA is $5,500 per individual for 2016. And if you’re 50 or older, you can contribute an extra $1,000 for 2016. You have until April 18, 2017 to contribute to your IRA for 2016.