We keep track of all the tax law changes so you don't have to. TaxAct 2016 federal and state products have all the latest tax law changes to help you get your maximum tax advantage the fastest way possible!
The maximum amount of your earned income on which you pay Social Security tax is now $118,500. When you reach that amount with one employer, they should stop withholding Social Security tax from your pay until the following year. If you work for more than one employer, and your total earnings are more than $118,500, TaxAct calculates a credit for any overpayment of Social Security taxes.Print
You may qualify for a credit equal to up to $13,460 of your adoption expenses. If your employer provides adoption benefits, you may also be able to exclude up to the same amount from your income. Both a credit and exclusion may be claimed for the same adoption, but not for the same expense. The credit is now permanent and indexed to inflation.Print
The canceled debit exclusion provides tax relief on canceled debt for many homeowners involved in the mortgage foreclosure crisis. You may exclude up to $2,000,000 ($1,000,000 if married filing separately) of canceled qualified principal residence indebtedness from taxable income.Print
The standard amount you can deduct from income if you don't itemize your deductions is $6,300 ($12,600 for married couples filing jointly, or $9,300 if you file as head of household).Print
This provision increases the standard deduction for married taxpayers filing jointly, and expands the 15% tax bracket.Print
The Alternative Minimum Tax (AMT) exemption amount rises in 2016 to $53,900 ($83,800, for married couples filing jointly).Print
If you have no children, your maximum Earned Income Credit for 2016 is $506. With two children, the maximum amount is $5,572, and with one child, it is $3,373. If you have three or more qualifying children, the maximum Credit you can receive for 2016 is $6,269 (up from $6,242 in 2015).Print
You may be able to exclude all or part of the interest from qualifying Series EE or Series I bonds if you use the income for qualified educational expenses. You cannot take this benefit if your modified adjusted gross income is $92,550 or more ($146,300 if you file jointly, or if you file as Qualifying Widow(er) with Dependent Child).Print
The American Opportunity Tax Credit expanded on the Hope Credit. The income limits are higher, the credit is available for more qualified expenses, and you can use the credit for four years of post-secondary education instead of just two. In addition, you can even get a refund if you don't owe any tax for up to 40% of the credit ($1,000).Print
The majority of taxpayers will see minimal impact on their 2016 federal taxes. For more information, visit TaxAct's website, HealthcareAct.com. The site offers tools and information to help you understand the impact of the Affordable Care Act on your taxes. Resources include year-by-year guidance and calculators to estimate your eligibility for the premium tax credit or your tax penalty for being uninsured.Print
If individuals or families purchase health insurance through the Health Insurance Marketplace, they may qualify for the new Health Insurance Premium Tax Credit. To qualify for the credit, your household income must fall between 100 percent and 400 percent of the federal poverty line, you may not be claimed as a dependent on any other taxpayer's return, and (if married), you must file jointly. In the case of spousal abuse or abandonment, this requirement may be waived.Print
In 2016, each individual taxpayer must carry the required "minimum essential coverage" each month, qualify for an exemption, or pay mandatory taxes. For those facing this new penalty, relief provisions have been written into the tax laws to help taxpayers transition into these new requirements. The minimum amount of insurance coverage you must carry is calculated per family member and then added together.Print
If you have a high adjusted gross income, you may not be able to take all your itemized deductions, thanks to the Pease provision. Itemized deductions start to phase out at $155,650 if you are married filing separately ($259,400 for individuals, $285,350 if head of household, or $311,300 if filing jointly). Your itemized deductions are reduced by 3% of your adjusted gross income over these amounts, but they are never reduced by more than 80% of your otherwise allowable deductions.Print
Your personal exemptions for yourself, your spouse, and your dependents reduce your taxable income by $4,050 each. If your adjusted gross income is over $259,400 ($155,650 if married filing separately, $311,300 if filing jointly, or $285,350 if filing as head of household), your personal exemptions are reduced by 2% for each $2,500 or portion over these amounts. The exemption phases out completely at $381,900 ($433,800 if filing jointly, $216,900 if filing separately, $407,850 if filing as head of household).Print
The standard mileage rate for the use of your car or other vehicle is up to 54 cents per mile for business (down from 57.5 cents for 2015) and down to 19 cents per mile driven for medical or moving purposes (down from 23 cents for 2015). The rate for charitable travel remained the same at 14 cents per mile.Print
The most you can contribute to one of these plans remains at $2,550. Your spouse can also contribute $2,550 if he or she meets the qualifications. For certain FSAs, up to $500 can now be carried over to the next year.Print
(1) Self-only coverage. For taxable years beginning in 2014, the term "high deductible health plan" as defined in Sec. 220(c)(2)(A) means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,250 and not more than $3,350, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,450.
(2) Family coverage. For taxable years beginning in 2015, the term "high deductible health plan" means, for family coverage, a health plan that has an annual deductible that is not less than $4,450 and not more than $6,700, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,150.Print
January 1 — Everyone
Federal Holiday (New Year's Day) - Details
January 11 — Employees who work for tips
If you received $20 or more in tips during December, report them to your employer - Details
January 12 — Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the first 15 days of December 2015.
January 14 — Regular method taxes
Deposit the tax for the last 16 days of December 2015.
January 15 — Individuals
Make a payment of your estimated tax for 2015 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES - Details
January 15 — Farmers & fishermen
Pay your estimated tax for 2015 using Form 1040-ES - Details
January 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in December 2015
January 15 — Nonpayroll withholding.
If the monthly deposit rule applies, deposit the tax for payments in December 2015.
January 18 — Everyone
Federal Holiday (Birthday of Martin Luther King, Jr./Inauguration Day) - Details
January 27 — Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the last 16 days of December 2015.
January 29 — Regular method taxes
Deposit the tax for the first 15 days of January.