Gearing Up for the 2016 Tax Season – A Look at the Changes That May Impact Your Return

Posted on in IRS Issues

Cook County IRS tax attorneys, 2016 tax seasonTax season is just around the corner, and that means everyone is preparing for their 2016 return. The following covers some of the biggest changes for the 2016 tax year and what these changes might mean for your return. It also provides some important information on what you can do, should you find yourself indebted to the IRS this upcoming tax year.

Inflation Adjustments to Affect Millions of Taxpayers

Each year, the IRS adjusts tax laws to compensation for inflation. Yet levels have been rather low over the last several years. This trend is expected to continue during the 2016 tax year. However, there are some changes that may affect your return. Those to look out for include:

  • A $50 increase on the personal exemption;
  • A $50 increase to the standard deduction for head-of-household;
  • A $27 increase to the maximum earned income credit for families with three or more children; and
  • A slight increase in the tax bracket income levels (less than 0.5 percent).

Possible Penalties for a Lack of Healthcare Coverage

One of the biggest (and most concerning) changes for taxpayers in 2016 is the penalty for a lack of healthcare coverage (2.5 percent of your income). Compared to 2 percent penalty from last year, the penalty amount is almost doubled, going from $325 to $695 for individuals, $162.50 to $347.50 for children. The maximum family penalty is more than double what it was last year, going up from $975 to $2,085. In some cases, this may turn out to be a significant cut of a tax return, or it could even result in a debt to the IRS. If it happens to you, it is important to know and understand your options.

Dealing with an IRS Tax Debt

If you are still dealing with back debt from last year, or are concerned that you may wind up owing the IRS this tax season, know that you do have options. More importantly, you should understand that not dealing with it is the worst possible strategy. Instead, contact an experienced IRS tax attorney for guidance and assistance.

At the Law Offices of Eric G. Zelazny, we work with you to resolve your IRS tax issues. Knowledgeable and experienced, we examine your options and assist you in choosing the path most appropriate for your situation. Learn more about how we can help by scheduling a personalized consultation. Call our Cook County IRS tax attorneys at 708-888-2299 today.

Source:

http://www.foxbusiness.com/markets/2016/12/11/heres-how-your-taxes-may-have-changed-in-2016.html

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