Northeast Planning Associates, Inc.

121 Shattuck Way, Suite 16,

Newington, NH 03801

Anticipated Changes in 2016

November 23, 2015

As expected, the Social Security Administration recently announced that there will be no cost-of-living adjustment (COLA) for Social Security benefits in 2016. For those under the income limits ($85,000 single/$170,000 joint) and already receiving Social Security and enrolled in Medicare Part B, premiums for Part B will also remain unchanged.

With this announcement, I thought it would be a good opportunity to review other anticipated changes in 2016:

  • Personal Exemption on tax returns is expected to increase to $4,050 in 2016.
  • Income tax bracket thresholds will increase slightly by an inflation factor to be determined by the IRS.
    • For Example: The highest tax bracket income thresholds will increase from $464,850 to $466,950 for those married filing jointly.
  • Income phase-outs for Roth IRAs and deductible IRAs if not covered by an employer plan are anticipated to increase by $1,000.
  • Gift/Estate Tax Exclusion Amount is set to increase to $5,450,000.

Additionally, there are no anticipated changes in IRA contribution limits or annual gift tax exclusion amounts.

As a reminder, please check my website for helpful calculators and tools, including a Federal Income Tax calculator, which will be updated as soon as changes for 2016 become effective.