The Foreign Service Journal, January-February 2016

AFSA NEWS CALENDAR THE OFFICIAL RECORD OF THE AMERICAN FOREIGN SERVICE ASSOCIATION Federal and State Tax Provisions for the Foreign Service THE FOREIGN SERVICE JOURNAL | JANUARY-FEBRUARY 2016 61 January 6 12-2 p.m. AFSA Governing Board Meeting January 15 Deadline: Sinclaire Language Award Nominations January 18 Martin Luther King Day: AFSA Offices Closed February 3 12-2 p.m. AFSA Governing Board Meeting February 6 Deadline: Community Service and Art/Academic Merit Awards February 15 Presidents Day: AFSA Offices Closed February 17 12-1:30 p.m. Luncheon: 185th A-100 Class February 18 2-3:30 p.m. AFSA Book Notes: Foreign Policy Breakthroughs February 28 Deadline: AFSA Dissent & Performance Award Nominations March 6 Deadline: AFSA Financial Aid Scholarship Applications The American Foreign Service Association’s annual Tax Guide is designed as an informational and refer- ence tool. Although we try to be accurate, many of the new provisions of the tax code and the implications of Internal Revenue Service regulations have not been fully tested. Therefore, use caution and consult with a tax adviser as soon as possible if you have specific questions or an unusual or complex situation. Foreign Service employees most frequently ask AFSA about home ownership, tax liability upon sale of a resi- dence and state of domicile. We have devoted special sec- tions to these issues. James Yorke (YorkeJ@ state. gov), who compiles the tax guide, would like to thank M. Bruce Hirshorn, Foreign Service tax counsel, for his help in its preparation. FEDERAL TAX PROV I SONS For 2015, the six tax rates for individuals remain at 10, 15, 25, 28, 33, 35 and 39.6 percent. CREATEDBYJEFFLAU The 10-percent rate is for taxable income up to $18,451 for married couples, $9,226 for singles. The 15-percent rate is for income up to $74,901 for married couples, $37,451 for singles. The 25-percent rate is for income up to $151,201 for married couples, $90,751 for singles. The 28-percent rate is for income up to $230,451 for married couples and up to $189,301 for singles. The 33-percent rate is for income up to $411,501 for married couples and singles. Annual income above $411,501 is taxed at 35 percent. Income above $464,851 for married couples and above $413,201 for singles is taxed at 39.6 percent. Although long-term capital gains are taxed at a maximum rate of up to 15 percent and are reported on form Schedule D, mar- ried taxpayers with income greater than $464,851 and singles greater than $413,201 pay a capital gains rate of 20 percent. These rates are effective for all sales in 2015, PLEASE NOTE This guidance applies to the 2015 tax year, for returns due on April 18, 2016. While correct at press time, bear in mind there may be changes to the tax code for the 2016 tax year. At present, however, we are not aware of any pos- sible changes that are likely to apply to 2015. Continued on p. 69 REGULAR AFSA NEWS PP. 62 - 68