{"id":929,"date":"2016-01-25T14:34:29","date_gmt":"2016-01-25T22:34:29","guid":{"rendered":"http:\/\/www.checkworks.com\/blog\/?p=929"},"modified":"2016-01-25T14:34:50","modified_gmt":"2016-01-25T22:34:50","slug":"changes-to-the-2016-tax-code","status":"publish","type":"post","link":"https:\/\/blog.checkworks.com\/index.php\/changes-to-the-2016-tax-code\/","title":{"rendered":"Changes to the 2016 Tax Code"},"content":{"rendered":"

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We all start getting tense and tight as we get close to tax time, worrying about whether we will owe and if so how much, or worrying about whether we will get enough back to do the things we want and need to do.\u00a0 One way to have some control over the outcome is to be so familiar with the tax changes that are in effect for \u00a02016 that we make maximum use of any opportunity to minimize the pain and maximize a positive outcome.<\/p>\n

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Although you should not wait until the last minute to file (the more time you give yourself the better the outcome), you should know that one change in 2016 is the tax filing deadline.\u00a0 The deadline this year will be April 18<\/strong>th<\/sup> instead of April 15<\/strong>th.<\/sup>\u00a0 April 15 will be a legal holiday in Washington D.C. because of Emancipation Day (anniversary of the abolition of slavery).\u00a0 Exceptions to this are Maine and Massachusetts, where \u00a0the deadline \u00a0will be April 19th<\/sup>, because \u00a0April 18th<\/sup> in those two states is Patriot\u2019s Day, a state-wide holiday. Municipal, state, and county offices will be closed as they celebrate the battles of Lexington and Concord \u00a0which took place in Boston, and also the hero Paul Revere\u2019s famous midnight ride in 1775.<\/p>\n

There is more good news for 2016.\u00a0 The standard deduction for Heads of Household \u00a0\u00a0is $9300<\/em>.\u00a0 All other standard deductions remain the same.<\/p>\n

The Earned Income Tax Credit<\/a> (wage supplement for low income workers) \u00a0increases to $6269.00<\/em> \u00a0for those with three dependents who qualify.\u00a0\u00a0 FileYourTaxesNow.com<\/a> states \u201cSome taxpayers may not owe any tax because of the credit and receive a very large refund.\u201d \u00a0Be sure to claim it if you\u2019re eligible!<\/p>\n

The refundable Child Tax Credit is up to a maximum amount of $3,000<\/em>, and there is\u00a0\u00a0a $50.00<\/em> increase in personal and dependent exemptions to $4050<\/em> per person.<\/p>\n

The limit will be higher for the Lifetime Learning Credit (for educational expenses).The adjusted gross income determining the reduction is $111,000<\/em> for 2016\u2014a $1000<\/em> increase.<\/p>\n

Not so good news is that the penalty \u00a0for not having health insurance that meets the requirements of the Affordable Health Care Act will increase. The penalty for an adult is $325<\/em> and the penalty per child is $162.50<\/em>\u2014or 2% of income if that is greater. \u00a0Be sure, however, to research ObamaCare<\/span><\/a> exemptions from the fee. These exemptions \u00a0can be claimed on the 8965 exemptions form.\u00a0 You can use that form if you were denied Medicaid, if your coverage would be more than 8% per person of household income, if your income is below the threshold for tax filing, \u00a0if you were without coverage for less than three months, or if you purchased coverage in the open enrollment period.<\/p>\n

Also in the health arena, the dollar range deductible for Medical Savings Accounts<\/a> has risen for the minimum ($2,250) \u00a0and also the maximum ($3,350). For families the maximum deductible is $6,700.<\/p>\n

The income limit is \u00a0higher for those itemizing (using Schedule A).\u00a0 For single filers it\u2019s $381,900 and for the married filing jointly category \u00a0it\u2019s $311,300.\u00a0 If your income is higher you cannot itemize.<\/p>\n

The Alternative Minimum Tax<\/a> Threshold is increased \u00a0for \u00a0married filing jointly, married filing separately, and all other filing statuses.<\/p>\n

The Gift Tax<\/a> Exclusion for 2016 is $14,000.\u00a0 You can give that much without having to file a special form.<\/p>\n

The Adoption credit<\/a> is $13,640 for a child with special needs. If your adjusted gross income is above $241,920, however, you cannot claim it.<\/p>\n

In the transportation arena, the benefit for qualified parking<\/a>\u00a0 will be $255.\u00a0 That\u2019s only a five-dollar increase, but every little bit helps.<\/p>\n

The Foreign Earned Income Exclusion<\/a> is up to $101,300\u2014a $500 increase.<\/p>\n

Changes in your personal status may also affect your filing.\u00a0 If your address has changed, or if you have moved, if you have changed jobs mid-year, or your marital status has changed, or you\u2019ve had a child, or someone is deceased, these changes should all be reflected in your filing.\u00a0 The exclusion amount for deceased taxpayers is up to $5,430,000\u2014a $20,000 increase.<\/p>\n

Even if you are getting your taxes done by someone else, you need to be aware of the 2016\u00a0 tax changes.You don\u2019t want to just turn everything over to the professional and follow blindly.You need to be aware of all the changes so you can be sure you\u2019re getting the best outcome. \u00a0Make sure you take advantage of the changes that affect you positively and don\u2019t miss out!<\/p>\n","protected":false},"excerpt":{"rendered":"

  We all start getting tense and tight as we get close to tax time, worrying about whether we will owe and if so how much, or worrying about whether we will get enough back to do the things we want and need to do.\u00a0 One way to have some control over the outcome is […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.checkworks.com\/index.php\/wp-json\/wp\/v2\/posts\/929"}],"collection":[{"href":"https:\/\/blog.checkworks.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.checkworks.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.checkworks.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.checkworks.com\/index.php\/wp-json\/wp\/v2\/comments?post=929"}],"version-history":[{"count":1,"href":"https:\/\/blog.checkworks.com\/index.php\/wp-json\/wp\/v2\/posts\/929\/revisions"}],"predecessor-version":[{"id":931,"href":"https:\/\/blog.checkworks.com\/index.php\/wp-json\/wp\/v2\/posts\/929\/revisions\/931"}],"wp:attachment":[{"href":"https:\/\/blog.checkworks.com\/index.php\/wp-json\/wp\/v2\/media?parent=929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.checkworks.com\/index.php\/wp-json\/wp\/v2\/categories?post=929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.checkworks.com\/index.php\/wp-json\/wp\/v2\/tags?post=929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}