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Monday, March 31, 2014

Joint Tax Committee Releases Overview of the Federal Tax System as in Effect for 2014

Joint Tax CommitteeThe Joint Committee on Taxation has released Overview of the Federal Tax System as in Effect for 2014 (JCX-25-14) (Mar. 28, 2014):

This document ... provides a summary of the present-law Federal tax system as in effect for 2014.

The current Federal tax system has four main elements: (1) an income tax on individuals and corporations (which consists of both a “regular” income tax and an alternative minimum tax); (2) payroll taxes on wages (and corresponding taxes on self-employment income) to finance certain social insurance programs; (3) estate, gift, and generation-skipping taxes, and (4) excise taxes on selected goods and services. This document provides a broad overview of each of these elements.

A number of aspects of the Federal tax laws are subject to change over time. For example, some dollar amounts and income thresholds are indexed for inflation. The standard deduction, tax rate brackets, and the annual gift tax exclusion are examples of amounts that are indexed for inflation. In general, the Internal Revenue Service adjusts these numbers annually and publishes the inflation-adjusted amounts in effect for a tax year prior to the beginning of that year. Where applicable, this document generally includes dollar amounts in effect for 2014 and notes whether dollar amounts are indexed for inflation.

In addition, a number of the provisions in the Federal tax laws have been enacted on a temporary basis or have parameters that vary by statute from year to year. For simplicity, this document describes the Federal tax laws in effect for 2014 and generally does not include references to provisions as they may be in effect for future years or to termination dates for expiring provisions.

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