The Internal Revenue Service (IRS) has announced the annual inflation adjustments for a number of provisions for the year 2016, including tax rate schedules, tax tables and cost-of-living adjustments for certain tax items.
These are the applicable numbers for the tax year 2016 – in other words, effective January 1, 2016. They are NOT the numbers and tax rates that you’ll use to prepare your 2015 tax returns in 2016 (you’ll find them here). These numbers and tax rates are those you’ll use to prepare your 2016 tax returns in 2017.
If you aren’t expecting any significant changes, you can use the updated tax tables to estimate your liability for the 2016 tax year. If, however, you are expecting to make more money, get married, buy a house, have a baby or other life change, you’ll want to consider adjusting your withholding or tweaking your estimated tax payments.
To view the upcoming tax brackets for 2016, click the following link: