Important Things You Should Know for Tax Season 2016
Tax season is officially here! Many of us have already taken care of our tax filing for the year, and others may still be hustling to gather time-sensitive tax documents. At any rate, for those who are still preparing to file their taxes, it is worth mentioning that this tax season is a little different this year.
Several changes have occurred that will affect the outcome of your annual filing. Success Tax Relief, a tax relief firm located in Texas, has composed a list of the most important changes that you will need to know when filing your taxes this season.
The Tax Deadline Is Extended
Most of us are familiar with the tax deadline falling on April 15. This year, it has been extended to Monday, April 18. What this means for you is that you’ll now get an three extra days to submit your annual filing. This can make all the difference between paying a late penalty and being worry-free!
There are a couple of reasons that the tax deadline has been extended. The main reason is because of the Emancipation Day Holiday. It is being observed on the 15th instead of the 16th of April. According to the Internal Revenue Service (IRS), “Washington, D.C., will celebrate Emancipation Day on that Friday, which pushes the deadline to the following Monday for most of the nation. (Due to Patriots Day, the deadline will be Tuesday, April 19, in Maine and Massachusetts.)”
Another small reason why our tax deadline has extended is because of Leap Year. This February, we get one extra day. The month will end on the 29th instead of the 28th. This technically gives taxpayers four extra days to prepare their taxes.
Penalties for the Affordable Care Act Have Increased
The Affordable Care Act is cracking down on taxpayers who still remain uninsured. In 2015, the minimum penalties were $325 and 2% for the wealthier families. This year, penalties have increased significantly with the minimum penalty starting at $695 while the average penalty will be approximately $965, according to the Washington Times.
The Tax Bracket Has Changed
USA Today reports that the tax bracket for 2016 has increased by approximately 0.4%. The Tax Foundation reports that for 2016, the income tax bracket ranges from 10% – 39.6% and varies depending on whether you are filing single, married, or Head of Household. Visit the official IRS website to determine where you range in this year’s tax bracket.
Earned Income Tax Credit Has Increased
The Earned Income Tax Credit (EIC) is designed to help people with low to moderate-sized incomes keep more of their annual earnings when filing their annual taxes. It essentially reduces the amount of their annual income. This credit helps keep taxpayer’s household incomes from rising to a higher tax bracket.
This year, the income limits to determine whether or not a taxpayer qualifies for EIC has been adjusted.
Depending on how many qualifying children you have, your Adjusted Gross Income (AGI) must range from $14,880 – $47,955 for single, Head of Household or the widowed, or $20,430 – $53,505 for Married Filing Jointly. The maximum amount of credit you can receive can range from $506 – $6,269. Again, this depends on how many children you claim. Visit the official IRS or contact a tax relief expert to determine your AGI.
Success Tax Relief: Keeping You Abreast with All the Tax Laws
It is quite possible that other tax laws will change. Success Tax Relief remains in constant communication with the IRS on various matters regarding individual cases with our clients as well as keeping abreast of amended tax laws. Our knowledgeable team of professional tax experts makes it a priority to inform all of our clients about the tax laws that are relevant to their unique case.
If you have any questions or concerns about how these new tax laws may affect your annual filings, call Success Tax Relief today at 877-825-1179. You can even ask us a question through our online contact form right now!