Inflation Widens Tax Brackets & Changes Benefits
Key changes affecting 2006 tax returns (filed by most taxpayers in 2007) include:
- The value of each personal and dependency exemption, available to most taxpayers, will increase $100 from the 2005 level to $3,300.
- The standard deduction, taken by two-thirds of all American taxpayers, will be $10,300 for married couples filing jointly, $5,150 for singles and $7,550 for heads of household.
- Tax brackets for each filing status will increase.
- The annual gift tax exemption will increase $1,000 from the 2005 level to $12,000.
A complete listing of inflation adjusted items for 2006 is available in Revenue Procedure 2005-70.