TaxAudit.com Offers Must Know Tax Tips for 2016

New filing date, healthcare penalty hike, permanent tax provisions and provision extensions - are you prepared?

06 Jan, 2016, 08:00 ET from TaxAudit.com

CITRUS HEIGHTS, Calif., Jan. 6, 2016 /PRNewswire/ -- TaxAudit.com, the IRS audit experts that handle more than 25,000 audits each year, today announced its annual tax tips and new law updates for U.S. taxpayers.

The year 2016 sees a variety of changes including a later filing date of April 18, some individual tax provisions made permanent or extended through 2016 through the PATH Act, and a penalty hike to $325 or 2 percent of their annual household income for taxpayers without the required health insurance in 2015.

"With just days to go before the end of the year, Congress finally extended most of the tax breaks which were set to expire and expanded a number of additional tax provisions. Some of these provisions – like the definition of racehorse as property – won't impact too many of us, but there's much good news for taxpayers this year. We've now got a few extra days to file, and same-sex couples will be treated as married couples in all states when filing their taxes under the Equal Protection Clause.  Congress clearly expects the IRS to provide better services compared to last tax season based on the allocation of certain funds to address these issues," said Dave Du Val, VP of Customer Advocacy at TaxAudit.com. "The bad news is the penalty for taxpayers without the required health insurance has more than doubled from $95 in 2014 to $325 per adult, limited to a family maximum of $975 in 2015, or 2 percent of 'household income,' the greater of the two. And for taxpayers who don't secure coverage again this year, they'll be looking at even higher penalties next year."

Some important new rules taxpayers and tax preparers should be aware of include:

Individual Tax Provisions Made Permanent

  • State and local sales tax deduction: The state and local sales tax deduction can be taken in lieu of the state income tax deduction. This benefits taxpayers in states with no income tax and sometimes those who purchase "big ticket" items such as automobiles.
  • For taxpayers with children: The lower threshold for the refundable Child Tax Credit has been made permanent at $3,000.
  • Higher tuition tax credit: The enhanced American Opportunity Tax Credit of $2,500 is in place for qualified education expenses.
  • Deduction for teachers: The Teachers Classroom Expense Deduction of $250 allows teachers to deduct supplies they bought for their classrooms. It will be indexed for inflation beginning in 2016. It also includes a teacher's "professional development expenses."
  • IRA charitable allocation: The Qualified Charitable Distribution allows those over the age of 70 and a half to make a charitable donation directly via trustee-to-trustee from an IRA account. Up to $100,000 of the distribution is tax free.

Individual Provisions Extended Through 2016

  • For homeowners facing foreclosure and short sale: The Qualified Principal Residence Indebtedness Exclusion provides relief for distressed homeowners facing foreclosure and short sale.
  • Deduction for mortgage insurance premiums: The Mortgage Insurance Premiums Deduction is a deduction for private mortgage insurance for homebuyers who put little to no money down when buying their home. Income restrictions apply.
  • Deduction for tuition and fees: The Tuition and Fees Deduction is a deduction for taxpayers (yourself, your spouse or dependents) with qualified education expenses. Income restrictions apply.
  • Energy efficient credit: Credit for energy efficient nonbusiness items such as windows and doors. Limits apply.
  • Businesses: The Section 179 limit remains at $500,000, and the 50 percent bonus depreciation applies to property placed in service through 2017.

Please note: This is only a short list of some of the new tax rules for 2015. Please spend time with your tax preparer and learn the rules at IRS.gov so you and your advisor are knowledgeable about qualifying expenses, eligible purchases, contributions, gifts, etc., that may help to reduce your tax burden.

For more information, please visit www.taxaudit.com.

About TaxAudit.com

TaxAudit.com is the largest and fastest-growing audit defense service in the country for taxpaying individuals, small businesses and tax preparers, with over 6 million members and 25,000 audits handled and resolved each year.

TaxAudit.com offers IRS audit representation and defends taxpayers from the moment they receive an audit notice through to the best possible resolution. TaxAudit.com members receive expert tax representation and relief from the nightmare of being audited ─­ at a price point any taxpayer can afford.

TaxAudit.com is headquartered in Citrus Heights, CA.

 

SOURCE TaxAudit.com



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