The Blog Of TL Wall Accounting

Tax Credits & Other Information For 2016

This is a summary of some of the things regarding taxes for 2015 I sent out to my clients by mail as we head into the new year. Some of it only applies to New York state residents while others are federal tax related. This post will be in bullet form:

* New York state’s corporate minimum fixed dollar amount is based on gross receipts. If you need to file an extension it should be filed by the beginning of March to allow time for processing by the state.

* Hopefully you had insurance coverage in 2015. If not, there’s a penalty of $325 if you’re single and as much as $2,000 or more if you’re married with dependent children. Hopefully you’ll receive Form 1095-B which proves you were covered for the year. You’ll only get this form if your company isn’t covering your insurance and you have to report it on your own. We want to clarify that you won’t be paying these amounts; they count as income, and will be taxed along with whatever you earned for the year.

* The Capital Gains tax rate is 20% for taxpayers in the 39.6% tax bracket, 15% for everyone else.

* The 179 Depreciation Deduction (a business deduction for capital equipment and software) has been reduced to $25,000 as of now; this could change before the end of the year.

* The business mileage rate for 2015 is 57.5 cents per mile. Medical and moving is 23 cents and charity is 14 cents.

* If you have kids in college, the American Opportunity Credit is still available up to $2,500. Of that amount, 40% might be refundable up to $1,000. This credit is set to expire in 2017. The Student Loan interest deduction is still limited to $2,500 per year.

* The maximum Earned Income Credit for 3 children is $6,242 and $5,548 for 2 children.

* The following credits or deductions have expired:
Educator Credit $250
Sales tax deduction on Schedule A Itemized instead of state & local income tax
Above the line tuition deduction and related expenses
Mortgage Insurance Premium Interest (MIP)

As we always reiterate, we hope you’ve kept all of your receipts for the year so we can determine just how much you get to deduct to reduce your tax liability.
 

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