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B.E.S.T. 2016 Tax · PDF file B.E.S.T. 2016 Tax Update Better Economic Solutions Team is proud to provide you with the B.E.S.T. Tax Update. _____ We believe knowledge can empower you

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Text of B.E.S.T. 2016 Tax · PDF file B.E.S.T. 2016 Tax Update Better Economic Solutions Team is proud...

  • B.E.S.T.   2016   Tax  Update 

    Better Economic Solutions Team is proud to provide you with the B.E.S.T. Tax Update. _________________________________________ We believe knowledge can empower you. We are dedicated to providing you information so you can make confident decisions.

    New laws will determine

    how much you pay for healthcare. This was true in previous years, however, the Affordable Care Act (ACA) will allow the Internal Revenue Service to use your tax return to determine how much you pay for health insurance premiums. Ultimately the ACA will determine where and how you receive healthcare as doctors and hospitals, such as Stony Brook Hospital, decide whether they will accept ACA healthcare plans. This is an historic time in American history. The idea that your tax will return will impact your healthcare would have made our founding fathers winze but this is progress, or so they say.

    Understanding your tax return Can help you save money.

    Saving money is important today especially for Middle Class American Leftovers, people who cannot receive subsidies or financial assistance because their income may be slightly too high causing them to pay more for healthcare expenses and financial aide for students. Your tax return is a tool that can determine how much you pay for healthcare or college much like your credit report determines how much interest you pay on a loan. Sometimes a simple tax deduction can help you save money.

    Planning ahead can determine how much you deduct for healthcare.

    Bunching tax deductions can help you save tax dollars. If you know, for example, that you need a lot of dental work you may want to pay the expense all in one year. This may increase your tax deduction as the ACA has made it more difficult for many to claim medical deductions (medical deductions must now exceed 10% of your Adjusted Gross Income). The difference between death and taxes is death doesn't get worse every time Congress meets. ~Will Rogers

    Thank You For Your Trust!

    Education is your B.E.S.T. defense against making costly mistakes when planning your future.

    Tax Planning Considers:

    Current Cash Flow– Your cash flow is either reduced or increased by the amount of income taxes you pay each year. ♦

    College Financial Aide– Parents sending children to college may find tax planning is helpful when applying for financial aide. ♦

    Medicare—Premiums for Medicare Part B (doctors and labs) and Part D (prescription drug coverage) are based on your tax return and are increased for people with higher income. ♦

    Medicaid and Long Term Care– Paying for home care, assisted living or nursing home care is costly. Your tax return can determine how much you pay for health services and how much of your assets may be preserved. ♦

    Real Estate Star Programs– Owning a home on Long Island is costly so saving money on real estate taxes is essential. ♦

    Retirement Income– How much of your Social Security is taxable is based on other income your re- ceive. ♦

    Estate Taxes– Taxing assets twice may not be uncommon. For example, IRA’s may be taxed to your estate and then again to the beneficiary. Avoid double taxation if you can. ♦

    Let the B.E.S.T. team help you with your tax planning. Saving you money is our top priority!

    Affording healthcare, Preserving assets and Paying less taxes...

    The B.E.S.T. APP to help you plan your future.






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      40 Years


  • 2015 Exemption $4,000. Standard deduction Single $6,300 MFJ $12,600 Head House $9,250 You can deduct an extra standard deduction of $1,200 if over age 65 or blind Married Filing Joint or $1,550 for single. IRA Rollovers can now only happen once annually with in 60 days

    Mileage Standard Rates Work related unreimbursed mileage is 57.5 cents per mile Medical miles is .23 cents Charity miles is .14 cents

     Don’t forget job search mileage and expenses. Also verify if you paid personal AUTO state registration fees in 2015.

    Alternative Minimum Tax (AMT) Exemption Phase out certain deduc ons if your income is over   Single $53,600 MFJ $83,400 MFS $41,700  

    Job Related Deductions Make sure you can prove your deductions. The Internal Revenue Service is seriously doing more audits to close the Tax Gap.

    Social Security taxable wages up to $118,500

    Education Deduction and Credit Life  me Credit  is $2,000 per return  ($10,000 in life me)  American Opportunity Credit is $2,500 per student (4 years only)   

    Healthcare   Long Term Care Deduc ons  Maximum deduc ons $4,750 for over age 70   And don’t forget the NYS 20% tax credit   

    Affordable Care Act Tax Form Updates  If you have heath  insurance you  should  receive one of  the new  tax 1095  forms.    If  you do not have one of  these  forms, YOUR  REFUND MAY BE REDUCED  ‐ you may have to pay a Penalty for  2015 its 2% of HOUSEHOLD income  or $325 (Max is $975).   The penalty rises in...   2016,  its  the  greater of 2.5% of HOUSEHOLD  annual  income or  $695 (Max per family $2,085).   

    Credits are based on income and will be determined by the Health  Exchange. If you received too much of a credit, your refund will be  reduced. 

    WHAT’S  NEWS: 

    The marginal Federal Tax Brackets are 10%, 15%, 25%, 28%, 33%, 35%, 39.60%. 

    Capital Gains  The tax rate  for net  long‐term capital gains  is 20%  for taxpayers subject to the  39.60% marginal tax on ordinary income.    The 15% capital gains rate continues to apply to taxpayers subject to the 25% to  35% marginal tax on ordinary income.    The 0% capital gains rate continues to apply to taxpayers subject to the 15% to  10% marginal tax on ordinary income.       Medicare tax increase   On unearned income such as dividends, interest, capital gains and rental income  the  increased  Medicare  tax  rate  of  3.8%  applies  to  income  over  $200,000  (singles)  $250,000  (MFJ).  Additionally,  taxpayers  will  pay  an  extra  Medicare    withholding tax of 1.45%.   

    Income W-2 Wage statements W-2 G Gambling 1099 R Pensions 1099 Int/Div Interest & Dividends 1099 SA Social Security 1099 Misc Subcontractor / other 1099 C Debt Cancellation 1098 T Tuition College 1099 G Unemployment \Other

    New HEALTHCARE TAX 1095 Forms 1095 A Insurance Exchange Subsidy 1095 B Insurance Company Health Care 1095 C Large Employer Health Insurance       

    Capital Gains / Losses 1099 B Form > List all stocks sold and purchase information

    Adjustments to Income CD early withdrawal penalty Tuition Student Loan Interest Alimony paid or received 529 Contributions or Withdrawals IRA/SEP Contributions HSA Contributions or Withdrawals      

    Itemized Deductions Medical Expenses (Limitations Apply) Real Estate Taxes Paid Auto registration, including renewals Charity, including mileage Mortgage Interest Investment Advisory fees Unreimbursed Job Expenses including: Mileage, phone, computer and on-line expenses, dues, job search and educational costs

    Other, List Income or Expenses Separately For: Self Employed Income & Expenses Rental Property Income & Expenses Moving Expenses Child Care expenses Jury Duty Children’s income for kiddie tax rules


            Taxes grow without rain ~ Jewish Proverb

    Find out when you are getting your refund,

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    Your Quick Tax Organizer Reference ... Cross it off as you get it. Being prepared gets faster refunds  

  • Pension Contribution Limits for 2015 and 2016 401K/457/403b’s $18,000 (catch up for over age 50 is $6,000) IRA/Roth’s $5,500 (catch up for over age 50 is $1,000)

    Annual Gift Exclusion $14,000

    Health Savings Account contributions 2015 & 2016 is $3,350 if single and Family contributions maximums for 2015 is $6,650 and 2016 is $6,750 Pension Contribution Limits 401K $18,000 (catch up for over age 50 is $6,000) IRA’s $5,500 (catch up for over age 50 is $1,000)

    Public Safety Officers (police and Fire Fighters) They may exclude up to $3,000 from IRA or retirement accounts if they are used for healthcare, including Long Term Care premiums. Volunteer fire fighters may also get a New York State credit of $200. Estate Taxes The amount of assets an  individual can  leave to their heirs without  paying taxes a er 2013 is $5.43 million. The top tax rate is 40%. 

    2015 Earned Income to be eligible for the Earned Income Credit (EIC) Earned Income and adjusted gross income (AGI) must each be less than: $47,955 ($53,505 married filing jointly) with three or more qualifying children $44,648 ($50,198 married filing jointly) with two

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