2016 Tax Season Update
Highlights from the Protecting Americans from Tax Hikes of 2015
Items made permanent
- Child Tax Credit
- $250 Teacher deduction for supplies purchased (now indexed for inflation)
- Section 179 deduction now $500,000 (indexed for inflation)
- Deduction for State and Local Income Tax
- Built-in Gains Rule for Corporations converting from C-corporation to S-corporation now 5 years (previously 10 years)
- IRA charitable distributions up to $100,000 if over 70 ½ years old
- Retailer depreciation of store remodels from 39 years to 15 years
Items still temporary
- Bonus depreciation
50% of cost of new assets in the year of purchase
2018 – goes to 40%
2019 – goes to 30%
Affordable Care Act
Penalty for no coverage in 2015
$325/adult; $162.50/under 18; maximum $975
Or 2% of AGI
Taxpayers will receive form by March 31st
Needed if you receive subsidy through the Marketplace
Documentation of Travel/Mileage/Meals
Required under IRC 274(d)
You must maintain a mileage log
Meals & Entertainment and Travel – Receipts must answer “Who, What, Where, When, and Why” in order to be allowed
Failure to do so will lead to IRS disallowing the deduction.
Retirement Contribution Limits
Social Security Wage Base for 2016 – $118,500
We have had several clients receive telephone calls from individuals claiming to be from the IRS and threatening to sue if the client fails to make a payment to them. THIS IS A SCAM! The IRS communicates with taxpayers first by mail. After that initial contact, the Service may call you (or your representative) if you have given them permission to do so. They never communicate by email first and very rarely do they email after a proper initial conversation. Stay Calm! If you are unsure, contact us and we will help sort out any confusion.
WELCOME TO REED & COMPANY!
Rick C. Reed & Company, PLLC is an accounting and consulting firm with clients throughout Central and South Central Texas. Founded in 1958, we now have a staff of more than a dozen experienced professionals supporting businesses and individuals from our offices in San Marcos and New Braunfels.
While we are proficient with numbers, we are also genuinely interested in you and your goals. Building a long-term relationship with our clients to be part of their success is our number one priority.
We hope you’ll stop in and say hi anytime.
Rick C. Reed & Company, PLLC is a CPA firm serving the accounting and tax needs of Central Texas.