5…4…3…2…1….. Happy Tax Season 2016!
With the new year comes promises to lose weight, shiny new engagement rings, and of course…annual tax updates. While most tax laws remain consistent from one year to the next, there are some that change.
We are here to share a sneak peek of 7 tax updates coming your way for 2016. Let’s get started.
1. Tax Day is April 18th this year.
Since April 15th falls on Washington D.C. Emancipation Day, the tax deadline date will extend to the following Monday, April 18th. Are you among the lucky ones living in a New England state? Extend that deadline one more day to April 19th.
2. Tax penalties related to Obamacare are increasing yet AGAIN.
If you’ve reached the ripe ol’ age of 26, then you’re familiar with health insurance and the recent changes to it via Obama. For those without coverage last year, a penalty of $285 (or 2% of income above the filing limit) was billed to them. Still don’t have coverage for 2016? If you don’t apply for an eligible health care plan, then the tax penalty could hit an all-time high of $695 per adult (or 2.5% of income).
3. The Earned Income Credit is increasing.
2016 brings a small but modest increase to the EIC. If you are a taxpayer with three or more qualifying dependent children, then the maximum credit will be increasing by $27 to $6,269. For those with two dependent children, your maximum will be increasing by $24 to $5,572. For those taxpayers with an only child, you can receive a maximum of $3,373 which is up $14 from 2015. No kids to worry about? You’ll still get an increase of $3 from last year which will leave you with $506 for 2016. (more…)