How Will 2015’s Tax Changes Affect You?

When Jan. 1 arrives, a series of updates to U.S. tax rules will take effect. Here’s a quick rundown of changes that could impact you and your business.

>> Going forward, taxpayers with IRA accounts will be able to perform only one tax-free rollover per year. Previously, people with multiple IRAs were allowed one rollover per IRA per year, but a ruling from the U.S. Tax Court changed that. Read more about what that could mean for small business owners’ cash flow strategies here.

>> The standard deduction for individuals for tax year 2015 will be $6,300, up $100 from 2014. The standard deduction will be $12,600 for married couples filing jointly, an increase of $200.

>> The annual contribution limit for 401(k)s is increasing, too, to $18,000—a gain of $500. The “catch-up” contribution limit for those age 50 and older will be $6,000, up from $5,500. There is no change to the IRA contribution limit, which will remain at $5,500.

>> The basic exclusion amount on the estates of people who die during 2015 will be $5.43 million, up from $5.34 million in 2014.

>> The penalty for those who don’t have health care in 2015 will be 2 percent of their annual household income or $325 per person ($162.50 per child under the age of 18), whichever is higher. There is a cap on the penalty’s size; it can’t cost more than the national average premium for bronze coverage under the Affordable Care Act. The 2014 penalty is $95 per person ($47.50 per child) or 1 percent of income.

>> Employees will be able to contribute $2,550 to their employer-backed flexible spending accounts for health care expenses, a gain of $50.

>> The Alternative Minimum Tax exemption amount for individuals will be $53,600, up from $52,800. The AMT exemption for married couples filing jointly will be $83,400, up from $82,100.