As the 2016 tax-filing deadline nears, taxpayers can be grateful they don’t have to struggle figuring out how new laws might or might not affect them.
No major tax law changes were enacted in 2015, although Congress did make some relatively small tax changes, and implementation of prior tax measures continues, according to Bankrate.com.
However, taxpayers should be on the lookout for new efforts by the Internal Revenue Service to stem tax identity theft, and pay attention to this April’s new tax deadlines — extra days!
In the year ahead, the uninsured will groan under skyrocketing Obamacare penalties. And students trying to get federal tax breaks to defray higher education costs will find the red tape a bit more tangled.
(Still haven’t filed your taxes? Check out 15 Most Overlooked Tax Deductions.)
Following are 10 tax topics Bankrate says taxpayers should stay on top of in 2016.
1. Targeting identity thieves
Last March, the IRS convened a security summit to brainstorm ways to stop identity thieves and related refund fraud. Seven months later, the agency, state tax officials and the private sector tax industry announced 20 new pieces of data that will be used to validate the authenticity of taxpayers and the entries on tax returns in their names in 2016.
IRS Commissioner John Koskinen says the added security measures are likely to slow the agency’s processing of returns, and that could mean some delays in issuing refunds.
2. New tax deadlines
The usual midmonth tax-filing deadline is a bit later in 2016, thanks to the way the days fall in April. This year, the Washington, D.C., holiday Emancipation Day is celebrated on April 15. Because federal law mandates that any holiday in the city also applies to offices there, the due date for annual 1040 filings will be Monday, April 18.
Better yet, taxpayers in Maine and Massachusetts will have until April 19 to file their federal returns because offices there will be closed on the 18th for Patriots’ Day, the holiday in those states commemorating the first battles in the Revolutionary War.
3. Obamacare tax penalties, credits
The price of not having health insurance, now required as a result of the Affordable Care Act, keeps going up, and those without it will have to cough up at tax-filing time. The individual responsibility payment penalty for not having minimal essential medical coverage is based each month on the number of uninsured members of a family and household income.
For an uninsured household of three or more during the 2015 tax year, the maximum penalty is $975. For the 2016 tax year, it will be $2,085.
On a slightly encouraging note, the U.S. Supreme Court ruled in June that the federal premium tax credit was available to eligible taxpayers, regardless of whether they bought their coverage on the federal exchange or through state marketplaces. This government subsidy is available to eligible insurance exchange policy buyers to help them pay for part of their required coverage.
4. State tax filing for same-sex couples
In June, the Supreme Court approved same-sex marriage, compelling states to recognize legal ceremonies performed elsewhere. Among other things, this means gay and lesbian married couples now can file joint tax returns on the state level, just as they already were required to do with their federal taxes.
Same-sex couples also should check with their state tax departments whether they can amend prior-year returns that the partners had to file as single state taxpayers before the court’s ruling.