IRS changes you should know about before filing your taxes
Every year, the IRS tinkers with many of its rules to adjust for inflation and new legislation. Keeping up with all the changes can be daunting — especially because there’s a difference between the year we’re in and the tax year the changes apply to.
Tax season officially gets under way this week. Here are some of the changes that matter as you prepare your tax return for the 2016 tax year.
Significant 2016 tax year changes
- You get an extra three days to file. The tax filing deadline is April 18, 2017.
- Taking the earned income tax credit or the additional child tax credit will delay any refund until Feb. 15.
- Do you have an individual taxpayer identification number? Many expired Jan. 1. To avoid delays and not lose out on benefits, check and, if needed, fix yours.
- The standard mileage rates for the use of a car, van, pickup or panel truck are down from last year.
- It’s now easier to get a waiver on the 60-day time limit on rolling over your IRA or 401(k) tax-free.
» MORE: Best tax preparation software
2016 tax numbers at a glance
| Top tax bracket income threshold (39.6%) |
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| Standard deduction |
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| Personal exemption | $4,050 (but starts phasing out when your adjusted gross income hits $259,400 if single or $311,300 for married filing jointly) |
| IRA contribution limit |
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| 401(k) contribution limit |
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| Flexible spending account contribution limit | $2,550 |
| Health savings account contribution limit |
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| Student loan interest | $2,500 maximum deduction |
| Lifetime Learning Credit | $2,000 maximum deduction per return |
| Earned income tax credit | up to $6,269 |
| Income limit on itemized deductions |
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» MORE: How to find a good tax preparer
Tina Orem is a staff writer at NerdWallet, a personal finance website. Email: torem@nerdwallet.com.
The article IRS Changes You Should Know About Before Filing Your Taxes originally appeared on NerdWallet.