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Tax News

 
With the election over and a change in the government we anticipate some major changes in the tax codes over the next year or so. We will be on top of the changes to ensure we are providing you with most current rules when preparing your tax return.

Be sure to ask your tax preparer for more information

Child Tax Credit

The maximum credit is $1,000 per qualifying child under the age of 17

Capital Gain Tax Rates

 
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Capital Gains & Qualified Dividends
For 2015 income tax returns the tax on long-term capital gains (assets owned for more than one year) is calculated at a reduced tax rate of 15% for taxpayers in the 25 to 28% tax brackets. Taxpayers in the 10 and 15% income tax brackets pay 0% on long term gains.

Itemized Deduction Limitation & Personal Exemptions

Higher-income taxpayers are subject to a reduction of their Itemized Deductions once the income reaches $258,250 for a single taxpayer and $309,900 for married taxpayers.

Education Credits

There are two credits available for higher education, the American Opportunity Credit and the Lifetime Learning Credit. The AOC credit is for the first 4 years of higher education with a maximum credit of $2,500 per student per year of which 40% is refundable. The LLC is equal to 20% of up to $10,000 with a maximum credit of $2,000.

Obamacare

In January 2017 taxpayers will begin receiving their tax information forms. If you are covered by health insurance you will receive one, two or all three of the following forms - 1095A - 1095B - 1095C. Please keep these forms and give to your tax preparer. They are necessary to prevent you from paying penalties on your health insurance coverage.

Tax Free Medical Benefits

Health care coverage provided by an employer for your children under 27 years of age is now generally tax-free to the employee. Previously, the child had to be under age 19 or under age 24 if a full-time student.

Bonus Depreciation and Section 179

Qualifying business assets purchased in 2016 through 2017 can be 100% deducted by taking advantage of the 50% bonus depreciation and Section 179 deductions.

Ask your preparer for more information.