Predictions for 2014 IRS Inflation Adjustment
Experts have published their predictions for the inflation adjustment the IRS will make in 2014. One such expert has foretold the official inflation number the IRS will use to determine the adjustment will be 1.6 percent, lower than the rates of the past two years. Although this year the AMT was permanently indexed for inflation, the new 3.8 percent surtax on net investment income and the 0.9 percent Medicare tax are not so indexed. In the long run, the lack of indexing to these two provisions may prove to be a thorn in the sides of individuals. However, experts predict the adjustment that will impact taxpayers most in 2014 will be the change to the lifetime gift and estate tax exemption, now permanently indexed for inflation.
See Laura Saunders, "A Sneak Peek at 2014 Taxes," WSJ.com (October 4, 2013).
Posted by Kelly Humke, Associate Editor, Wealth Strategies Journal
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