Federal Tax Law Updates
Here's what's new for 2016:
- Alternative Minimum Tax (AMT) exemption amounts increased:
- For single or head of household -- $53,600
- For married filing jointly or qualifying widow(er) -- $83,400
- For married filing separately -- $41,700
- IRA deduction expanded -- You might be able to claim a deduction if both of these apply:
- You were covered by a retirement plan.
- Your income was less than $71,000 -- or $118,000 for married filing jointly or qualifying widow(er)
If your spouse was covered by a retirement plan but you weren't, you might be able to claim a deduction. Your income has to be less than $193,000 to claim a deduction in this case.
- Current standard mileage rates:
- $0.54 a mile for business use of a vehicle
- 23.5 cents a mile for medical care
- Earned Income Credit (EIC) maximum income changes are:
- Three or more children lived with you and you earned less than $47,747 -- or $53,267 if married filing jointly
- Two children lived with you and you earned less than $44,648 -- or $49,974 if married filing jointly
- One child lived with you and you earned less than $39,296 -- or $44,651 if married filing jointly
- No children lived with you and you earned less than $14,880 -- or $20,330 if married filing jointly
- The maximum investment income you can earn and still get the EIC increased to $3,400.
- Elective salary deferrals:
- No exceptions -- maximum amount is $18,000
- SIMPLE plans only -- maximum amount is $12,500
- 403(b) plans and qualify for the 15-year rule -- maximum amount is $21,000
- Catch-up contributions for taxpayers age 50 or over has increased to $6,000. Exceptions include for Section 401(k)(11) and SIMPLE plans
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So how much will you get (or owe) this year? That’s the million-dollar question. We happen to have three very useful calculators to help you estimate your refund or balance due.