Considerations Before Filing Your 2016 Tax Returns

Posted on Posted in Business & Corporate Law, Tax Laws

Overall, the methodology and approach to filing your 2016 tax returns will be quite comparable to that of 2015. Nonetheless, there are important bits of information you should be aware of:

Taxpayers will again be given three additional days to file since April 15 falls on a non-business day (Saturday). The deadline is now April 18 (which incorporates a Monday holiday).

Newly elected President Trump has promised tax cuts in 2017 – but nobody knows how different 2017 will be. Prospectively, some taxpayers have chosen to defer income to 2017 with the expectation that rates will decrease.

There will now be a larger penalty if you do not have health insurance. There are roughly 30 exemptions that will protect the majority of taxpayers from this penalty, so most individuals will not be subjected to it. So far, President Trump has not changed the rules that go along with the Affordable Care Act, but this is expected to occur sometime in the future.

If you don’t pay, you could lose your passport. Starting in 2017, the U.S. State Department has the right to revoke the passport of a U.S. citizen who owes more than $50,000 in back taxes. The IRS has not yet started providing that information to the State Department, but plans to do so this year.

The mileage rate is lower now for those who wish to get a tax break for using their vehicle for business, charitable, moving or medical purposes. Here, taxpayers can deduct the actual cost or use the IRS mileage rate.

Your tax bracket might have changed. The maximum 39.6 percent is applicable for single taxpayers making at least $415,050 and married taxpayers filing jointly with an income of at least $466,950. This is an increase from $413,200 and $464,850, respectively, last year. Income levels for other tax rates (10 percent, 15 percent, 25 percent, 28 percent, 33 percent and 35 percent) have also have been adjusted slightly.