By learning about tax changes early in 2016, you’ll have more time to plan for them. Here are nine changes, according to the IRS and USAToday.
1. Income taxes for 2015 are due on April 18 because Friday, April 15 is the Emancipation Day holiday in Washington, D.C.
2. Penalties for not having qualified Affordable Care Act health insurance in 2016 are $695 per adult, 2.5 percent of income for children or a family maximum of $2,085.
3. Tax brackets rise by 0.4 percent, adjusted for inflation.
4. Standard deductions for heads of households rise, including single, married filing jointly, and married filing separately. The deduction rises by $50 to $9,300 in 2016.
5. Personal exemptions rise by $50 to $4,050 for this year.
6. Contribution limits for health savings accounts rise by $100 per family to $6,750, and an additional $1,000 for those 55 or older. Individual contribution limits remain the same at $3,350.
7. Earned Income Credit is rising. The maximum allowable Earned Income Credit for families with three or more children rises to $6,269, up by $27 in 2016. With two children, the maximum rises by $24. And one child families get $14 more than in 2015.
8. The exemption from alternative minimum tax rises for single taxpayers by $300 in 2016 to $53,900. Joint filers see a $500 boost to $83,800 this year.
9. The estate tax exemption rises to $5.45 million, up $20,000 for the estates of those who pass away in 2016.
Contributions to 401(k) plans, IRAs, and flexible spending arrangements are all staying the same as they were for 2015.
