U.S. Income, Estate & Gift Tax 2014

Estate & Gift Tax
1. Estate and Gift Tax Exemption increases from $5,250,000 to $5,340,000, tax rate: 40% (excess over $5,340,000)

2. Gift Tax Exclusion: $14,000 per donee

3. Up to $1,090,000 of farm or business realty can receive discount estate valuation

4. Estate Tax Deferral (Installments)

If one or more closely-held businesses make up greater than 35% of an estate, as much as $580,000 of tax can be deferred, and the IRS will charge 2% interest (15 year tax deferral).

Pensions/Retirement Plans (2014)
1. Pay-in limitation for defined contribution plans increase to $52,000 (based on up to $260,000 in salary), which is a $1,000 increase (for profit-sharing plans, KEOGH plans, et al)

2. Benefit limit for Defined Pension Benefit Plans is $210,000.

3. 401(K) limit remains $17,500

Social Security
Social Security wage base increases in 2014 to $117,000 (up $3300 from 2013 cap). The tax rate imposed on employers and employees remains 6.2% and the employer share of Medicare tax stays at 1.45%. The employee’s share is 1.45%, but the 0.9% Medicare surtax kicks in for singles with wages exceeding $200,000 and couples earning over $250,000.

Income Taxes
US Taxpayers working abroad have a larger exclusion $99,200 (2014).

2014 Top Tax Rates
Taxable Income / Over / Tax Rate
Married $457,600 39.6%
Singles $406,750 39.6%

Standard Deductions
Married: $12,400
with one spouse over 65: $13,600
with both spouses over 65: $14,800

Singles: $6,200
over 65: $7,750

Itemized Deductions
High Income Earners have phase-out of itemized deductions 3% of the excess of AGI over:

Singles: $254,200
Married: $305,050

Total deduction can’t exceed 80% of itemizations. Medicals, investment interest, casualty loss, are exempted.

Dividends/Capital Gains
20% top tax rate on dividends and long-term gains 2014; on taxable income in excess:

Singles: $406,750
Married: $457,600

3.8% Medicare surtax boosts the rate to 23.8%

AMT
AMT exemptions increase for 2014
Singles: $52,800
Marrieds: $82,100

AMT phase-outs start at income levels
Singles: $117,300
Couples: $156,500

28% AMT tax bracket begins above $182,500.

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