TMCnet News
What's New for the 2016 Tax Season? Wolters Kluwer Reviews Changes Taxpayers Need to KnowWhile 2016 was not a significant year for tax legislation, the upcoming tax return filing season will see more changes than the prior tax filing season, according to Wolters Kluwer Tax & Accounting. "Taxpayers will experience more changes this year due to the fact that adjustments to the Tax Code made by the PATH Act enacted at the end of 2015, and in particular changes to the expired tax breaks that were made permanent by the PATH Act, were generally not effective until 2016," said Mark Luscombe, JD, LLM, CPA and Principal Federal Tax Analyst for Wolters Kluwer Tax & Accounting. Below are some of the more significant changes that taxpayers and tax preparers should be aware of as they get ready to file their taxes this year: Tax Filing Deadlines. The individual tax filing deadline is Tuesday, April 18, 2017, due to April 15 falling on a weekend and Monday, April 17 being a holiday in the District of Columbia. Partnership returns are now due to be filed on March 15, 2017 rather than April 15. Many corporate tax returns are now to be filed on April 18, 2017 rather than March 15. Forms W-2 and 1099-Misc. now must generally be filed by January 31, 2017. FBAR reporting of foreign bank accounts is moved to April 18, 2017 from June 30. Refundable Credits. The PATH Act introduced a number of new restrictions on taxpayers claiming the Earned Income Tax Credit, the Additional Child Tax Credit, and the American Opportunity Tax Credit. These include: deadlines for obtaining Social Security numbers and Taxpayer Identification Numbers; expanded due diligence requirements for the tax return preparer; expanded restrictions on taxpayers who made improper claims for the credits in prior years; an increased underpayment of tax penalty; a February 15 limit on how soon the IRS can issue a refund; and, for the American Opportunity Tax Credit, new requirements to obtain Form 1098-Ts and to include the educational institution's employer identification number on the tax return. Mortgage Interest Deduction. The IRS acquiesced in the Voss case, making the mortgage principal limitations on the mortgage interest deduction applicable on a per-taxpayer rather than a per-residence basis. Additional mortgage information is also required on te Form 1098, including the amount of the mortgage, the address of the property, and the loan origination date. Health Care. The personal responsibility payment for failure to obtain health insurance has increased to the greater of $695 (from $325 in 2015) or 2.5 percent (from 2 percent in 2015) of household income. The Cures Act enacted on December 13, 2016 also enables small businesses to offer Qualified Small Employer Health Reimbursement Arrangements without penalties. Bonus Depreciation. With respect to 50 percent bonus depreciation, the allowance for qualified leasehold improvement property was replaced by an allowance for additions and improvements to the interior of any nonresidential real property. Farmers were also allowed to claim a 50 percent deduction in place of bonus depreciation on certain trees, vines, and plants in the year of planting or grafting rather than the placed-in-service year. Olympic Winners. Receipts of Olympic medals will not be taxed on the value of the medal or monetary awards from the U.S. Olympic Committee. Research Credit. The research credit has expanded in two different ways to help small businesses. It can be used to reduce the alternative minimum tax and a specific amount can be used to offset the payroll tax on employees. Work Opportunity Credit. The Work Opportunity Credit is expanded to add a new category for qualified long-term unemployment recipients. Expired Tax Breaks. Although many popular regularly expiring tax breaks were made permanent by the PATH Act, other tax breaks continue to expire, with several individual, business and energy-related tax breaks expiring at the end of 2016, including, for individuals, the tuition and fees deduction, the exclusion for mortgage debt forgiveness, and the mortgage insurance premium deduction. Partnership Audit Rules. New partnership audit rules are effective for 2018, but partnerships under audit can elect to apply the new rules earlier. Country-by-Country Reporting. Although the United States will not require multi-national companies to begin country-by-country reporting until 2017, other countries in which they may operate have started to require country-by-country reporting for 2016 under the Base Erosion/Profit Shifting initiative of the OECD. Companies subject to such reporting for 2016 will have the option to report to the IRS rather than directly to the countries with the 2016 reporting requirement. About Wolters Kluwer Tax & Accounting Wolters Kluwer Tax & Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax & Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2015 annual revenues of €4.2 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).
View source version on businesswire.com: http://www.businesswire.com/news/home/20170117006089/en/ |
