2016 Mileage Rates
- Business: 54 cents per mile (down from 57.5 cents in 2015) - Medical or Moving: 19 cents per mile (down from 23 cents in 2015) - Charitable: 14 cents per mile | |
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Beware of Tax Scams! The IRS has issued a new warning against thieves who may contact people on the phone or via email or a letter and try to trick them into divulging personal financial information, such as their Social Security or bank account numbers, or even turning over some of their hard-earned cash. And the scams can be tough to spot. Potential victims may see a fake caller ID that identifies the call as coming from the IRS or receive mail or email that appears to have the IRS letterhead. The scammers typically try to intimidate victims into acting quickly-by, say, sending a payment to what they claim is an IRS address-by threatening arrest or some other consequence. | |
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Did you move or change your email address in 2015? Call or email the office and let us know! |
| | Greetings!
Happy New Year! Welcome back for another tax season! We hope 2015 was a good year for you and that 2016 brings you health, prosperity and minimal tax unpleasantness. We look forward to working with you this year.
We have some important tax news. Please see the sections below for complete details. If you have any questions, please do not hesitate to call our office.
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Tax Season Messages |
2015 tax organizer packages are being delivered starting this week. Depending on your delivery preference, we nbsp;are sending them by US Mail, email or delivering them to your web portal. For those of you who are email or portal recipients, we are mailing you a separate letter with the email address and portal login information we have on file; please contact our office if either of these needs to be changed.
Tax returns are due to the IRS by Monday, April 18, due to the Patriot Holiday in Washington DC. To allow adequate time to complete your returns by April 18, completed organizers and tax documents must be returned to our office on or before March 21.
Regarding the March 21 date, if but for some missing K-1 statements you would have all your tax documents, we encourage you to deliver what you have, and then send us the K-1 statements when they arrive.
For those of you who cannot file a completed return by April 18, we will automatically file an extension for you. Remember, an extension merely allows an additional 6 months to file your return; it does not provide a free extension of your balance due tax payment. Your full tax payment is still due to the IRS by April 18. The IRS will assess interest on the unpaid balance for each month or partial month payment is delayed past April 18.
Regarding security transactions reported on Schedule D, please do not feel a need to provide individual transactions on the Organizer (as a matter of fact, the web portal version does not even have the form). We will input the appropriate entries from your brokerage statements.
If you are missing the form 1099-SA from Social Security Administration, you can request a replacement online at www.socialsecurity.gov/i1099.
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Tax Extenders |
In December 2015, the President signed into law the Protecting Americans From Tax Hikes or PATH Act. The bill makes permanent many of the individual and business tax provisions that had been routinely extended by Congress on a one- or two-year basis, and temporarily extends many others. Notable ones are the following:
- Enhanced American Opportunity Tax Credit made permanent - makes permanent the AOTC tax credit of up to $2,500 for four years of post-secondary education.
- Enhanced Earned Income Tax Credit made permanent - makes permanent increased EITC amounts for those with three or more children, and the reduced EITC marriage penalty.
- Above-the-Line Deduction for Educator Expenses made permanent - allows educators to claim deduction for up to $250 per year, now indexed for inflation, and also allows professional development expenses to be eligible.
- State and Local Sales Tax Deduction made permanent - allows taxpayers who itemize to claim deduction for state and local sales taxes in lieu of state and local income taxes.
- Enhanced Child Tax Credit made permanent - reduces the income threshold from $10,000 down to $3,000, which will allow for a higher credit for taxpayers who qualify.
- Qualified Charitable Distributions made permanent - allows taxpayers 70 1/2 or older to make charitable contributions directly from IRA (see December 2015 newsletter for details).
- Section 179 expensing - permanently extends the small business expensing limitation and phase-out amounts to $500,000 and $2 million, respectively, both indexed for inflation.
- Bonus depreciation - extends 50% bonus depreciation through 2017; reduces to 40% in 2018; and 30% in 2019. Phases out for property placed in service starting in 2020.
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Identity Theft |
For those of you who have been victims of identity theft in the past, you may have received a letter from the IRS with an Identity Protection Personal Identification Number (IP PIN). The IP PIN must be included in your e-filed tax return. Otherwise, the return will be rejected.
However, the letter you received this year erroneously lists the incorrect year. The IRS announced that, due to an error, it sent out CP01A notices, dated 1/4/16, that incorrectly indicate the Identity Protection Personal Identification Number (IP PIN) issued is to be used for filing the 2014 tax return when the IP PIN is actually to be used for the 2015 tax return. The IRS emphasizes the IP PIN listed on the CP01A notice, dated 1/4/16, is valid for the 2015 returns.
If you have received such a letter, please include it with your tax documents and we will use it to file your 2015 return. There is no need to call our office or contact the IRS. |
| As always, we are honored to handle your tax and accounting matters. Thank you for your business! Sincerely,
Doris Cloud and Paul Cloud
This newsletter is for general guidance only, and does not constitute tax advice or professional consulting. Before any action, consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information. |
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