Changes to the tax law for 2016

As you get ready to file your taxes, there are some changes to the laws you should know about.

1) Health Insurance

Under the Affordable Care Act if you do not have health insurance you will pay additional tax. You have to pay either 2 percent of your income above the tax-filing threshold of $10,150 or $695 per person, whichever is more. The maximum amount for the per-person tax is $2,085 for a family.

2) An Extension

April 15, 2016, is a holiday, Emancipation Day, in the District of Columbia. Because of this, tax returns must be postmarked by April 18, 2016.

3) New employer forms

Employers need to be aware of new paperwork under the Affordable Care Act. IRS forms Form 1095-B and Form 1095-C must be filed. Previously, this requirement was optional.

4) New filing dates

Congress changed the filing dates for certain returns. Forbes Magazine published an article with the list of the changes and what it means to individuals and businesses.

5) New tax breaks

Section 179 is the law that allows up to $500,000 in deductions for qualifying equipment on business tax returns. The equipment had to be bought and used in the 2015 calendar year. It must be used for business purposes. Under the old law, business could only deduct part of the equipment cost each year.

6) Two more breaks

The standard deduction goes up $50 this year. Parents of college students can claim up to $2,500 a year per student for college-related expenses.

Need to know more about this year’s tax law changes? Need help preparing taxes?  Just let us know!

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