Q:

What key adjustments did the IRS make to tax deductions for 2014?

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Quick Answer

Federal tax deduction adjustments for tax year 2014 include an increase in the standard deduction amount for all filing statuses, according to the IRS. Additional changes include an increase in the personal exemption and an increase in the Earned Income credit.

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Full Answer

The standard deduction for single filers and those who are married but filing separately increased from $6,100 to $6,200 for tax year 2014, notes the IRS. The standard deduction for taxpayers who are married and filing jointly increased from $12,200 to $12,400 on tax year 2014 returns. The standard deduction for taxpayers who file as head of household increased from $8,950 to $9,100.

The personal exemption deduction increased from $3,900 to $3,950 in tax year 2014, states the IRS. The personal exemption deduction began to phase out for individual taxpayers whose adjusted gross income is $254,200 or more. The personal exemption began to phase out at $305,050 for married couples filing jointly.

The Earned Income Credit increased from $6,044 to a maximum of $6,143 for taxpayers who are filing jointly and have three or more qualifying children, explains the IRS. Income thresholds still apply.

The Alternative Minimum Tax exemption for individuals increased from $51,900 to $52,800, advises the IRS. The exemption for married people filing jointly increased from $80,800 to $82,100 for tax year 2014.

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