Tax Changes/Developments that Impact Individuals

  • Mortgage Interest – A panel of the Court of Appeals for the Ninth Circuit found that when multiple unmarried taxpayers co-own a qualifying residence, the debt limit provisions apply per taxpayer and not per residence.
  • 2016 Mileage Rates – Business standard mileage = 54 cents per mile (a decrease of 3.5 cents when compared to 2015); Medical and Moving mileage = 19 cents per mile (a decrease of 4 cents when compared to 2015) ; Charitable mileage = 14 cents per mile (no change when compared to 2015)
  • Tax-Related Identity Theft – Victims of identity theft and refund fraud may obtain copies of unauthorized returns filed under their names. More information is provided at the following IRS website https://www.irs.gov/Individuals/Instructions-for-Requesting-Copy-of-Fraudulent-Returns
  • Various Extenders Made Permanent
    • State and Local Sales Tax Itemized Deduction
    • American Opportunity Tax Credit
    • Teachers’ Classroom Expense Deduction of $250 (indexed for inflation beginning in 2016)
    • Tax-free distributions from IRAs to Qualified Charitable Organizations
    • Code Section 529 Plans
      • Purchase of computer equipment and technology is considered a qualified expense
      • Certain distribution aggregation requirements are removed
      • Taxpayers are allowed the option to redeposit funds without penalty under certain circumstances when tuition is refunded
  • Two-Year Extensions (valid through 2016)
    • Qualified Tuition/Related Expenses Deduction
    • Cancellation of Mortgage Indebtedness Exclusion
    • Mortgage Insurance Premium Deduction
    • Residential Energy Property Credit

Tax Changes/Developments that Impact Businesses

  • Increased Repair Regulation De Minimis Safe Harbor – For taxpayers without an applicable financial statement (AFS), the new $2,500 threshold takes effect starting with tax year 2016. The IRS is also providing audit protection to qualified taxpayers by not challenging the use of the $2,500 threshold by taxpayers in years prior to 2016.
  • New Tax Return Due Dates (effective for taxable years beginning after 12/31/2015): Refer to this due date chart published by the AICPA
  • Limited Form W-2 Automatic Extensions: Effective for the 2017 filing season, taxpayers can only request a one-time 30 day non-automatic extension
  • Delay of “Cadillac” Plan Excise Tax: The excise tax imposed by the Affordable Care Act when the aggregate cost of qualified employer-sponsored health insurance coverage exceeds certain dollar amounts has been delayed by two years. The excise tax was originally scheduled to apply to tax years beginning after 12/31/17.
  • Permanent Extensions
    • Code Section 179 Expensing
      • Expensing limit set at $500,000 with a $2M overall investment limit before phase out (both amounts are indexed for inflation beginning in 2016)
    • Research Tax Credit
    • 100% Gain Exclusion on Qualified Small Business Stock
    • Reduced Recognition Period for S Corporation Built-In Gains Tax
      • Permanently set at a five-year recognition period
    • Basis adjustment to stock of S corporations making charitable contributions of property
    • 15-year straight-line cost recovery for qualified leasehold improvements, restaurant property and retail improvements
  • Five-Year Extensions (through 2019)
    • Bonus Depreciation
      • 50% for 2015-2017
      • 40% in 2018
      • 30% in 2019
    • Work Opportunity Tax Credit
  • Two-Year Extensions (through 2016)
    • Empowerment Zones Incentives
    • Three-year recovery period for certain race horses
    • Energy-Efficient Commercial Buildings Deduction
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