Personal Income Tax
Mary B Pearson, CPA
Assistant Professor of Accounting
Topics Discussed:

New Income Tax Legislation
◦ Tax Brackets
◦
◦
◦
◦
◦
◦

 Individual
 Capital Gains
 Investment Tax
Standard Deduction/Exemption
Itemized Deductions/Sch A
HSA Accounts
Tax Credits
Student Loan Interest Deduction
Retirement Questions
Q&A
Taxes?!
2015 Tax Brackets
Tax Rate
Single
Married Filing Joint
10%
$0 - $9,225
$0 - $18,450
15%
$9,226 - $37,450
$18,451 - $74,900
25%
$37,451 - $90,750
$74,901 - $151,200
28%
$90,751 - $189,300
$151,201 - $230,450
33%
$189,301 - $411,500
$230,451 - $411,500
35%
$411,501 - $413,200
$411,501 - $464,850
39.6%
Over $413,200
Over $464,850
Capital Gains Tax Rates

Long Term Capital Gains tax is imposed
on sale of investment assets (stocks, land,
rental property) where the sales price
exceeds your basis.

In 2015, the new capital gains tax rate for
individuals in the 10-15% tax bracket is 0%, 2535% tax bracket is 15%.

Still favorable tax treatment on sale
of personal residences!
Investment Income Tax Rates

Additional 3.8% tax on Net Investment
Income if:
◦ Adjusted Gross Income in excess of $200,000
single or $250,000 MFJ

Additional Medicare Tax of .9% of
individuals with Adjusted Gross Income in
excess of:
◦ $200,000 Single
◦ $250,000 MFJ
Exemption/Standard Deduction
Amounts
Exemption amount = $4,000 per
dependent
 Standard Deduction

Filing Status
Amount
Single
$6,300
Married Filing Joint
$12,600
Head of Household
$9,250
Married Filing Separate
$6,300
Itemized Deductions
Medical and Dental Expenses in excess of
10% of AGI (Not expenses paid out of
HSA funds)
 State Income Tax paid in 2015 or General
Sales Tax
 Real Estate Tax
 Personal Property Tax if not a Utah
Resident

More Itemized Deductions
Mortgage Interest & Points paid on
Primary Residence 1st and 2nd Mortgage &
Mortgage Interest on Second Home.
 Mortgage Insurance Premiums
 Cash & Non-Cash Charitable Gifts &
Mileage deductible at 14 cents per mile

More Itemized Deductions

Employee Business Expenses in excess of
2% of AGI
◦
◦
◦
◦
◦
Mileage at 57.5 cents per mile
Publications, Books, Supplies
Conferences
Travel Expenses
Tax Return Preparation Fees
Medical Expense Deduction

Take Advantage of Health Savings
Accounts (HSA)
◦ Tax Free Contributions up to $6,650 per
family, $3,350 individually
◦ New threshold for medical and dental
deduction is 10% for taxpayers under 65
makes it harder to deduct expenses as an
itemized deduction.
Taxes?!
What tax credits can I take?
Child & Dependent Care Credit
 Retirement Savings Credit: Eligible if
you contribute to a Retirement Account and
AGI is less than $61,000. (10% credit)
 Child Tax Credit: $1,000 for each eligible
dependent under the age of 17. AGI cannot
be greater than $130,000 MFJ.
 Residential Energy Credits
 Education Credits!!!
 Adoption Credit: $13,400

What Education Expenses can I
deduct?
Item
Education
Amount
Covered
Expenses
Income
Phase Out
American
Opportunity
Credit
4 years of
Post
Secondary
Education
$2,500 per yr
& student
40% of credit
is refundable
Tuition, Fees,
Books, and
Supplies
$180,000 MFJ
$90,000
Single
Lifetime
Learning
Credit
Post
Secondary
$2,000 per
taxpayer
20% of
expenses
Tuition, Fees,
Books, and
Supplies
$122,000 MFJ
$61,000
Single
Tuition &
Fees
Deduction
Post
Secondary
$4,000 per
year
Qualified
Tuition &
Fees
$160,000 MFJ
$80,000
Single/Hof H
Can I deduct Student Loan Interest?

Student Loan Interest: Can deduct up
to $2500 if AGI is less than $75,000
Single, $150,000 MGJ
Can I contribute to a Roth IRA?

Roth IRA: Non Deductible
◦ Can contribute up to $5500 if under 50 and
$6500 if over 50 and:
◦ AGI is less than $188,000 MFJ
◦ AGI is less than $127,000 Single
Can I withdraw my 401K early?

Yes, but you will pay a penalty of 10% if
not used for:
◦ Unreimbursed medical expenses or medical
insurance premiums if over 10% of your AGI
◦ Total or Permanent Disability
◦ Higher Education Expenses
◦ Purchase of your first home
◦ IRS levy
◦ Qualified Reservist Distribution