Review of Tax Rates for 2016

 As we approach the conclusion of 2016, the results of the recent election, holiday season and taxes are probably the three most prevalent subjects on the minds of most people. Therefore, we thought providing you information concerning 2016 taxes might help provide you a better picture concerning what to expect on your tax return.
Tax Rates
The tax rates for 2016 are as follows:
The personal exemption amount increased to $4,050.
Standard Deductions
If you are among the majority of taxpayers, you will claim the standard deduction on your tax return. The standard deduction for 2016 and are as follows:
Single (unmarried)/ Married filing separately: $6,300
Married filing separately: $6,300
Head of household: $9,300
Married filing jointly and qualifying widows/widowers: $12,600
Obamacare Penalty for No Health Insurance
For 2016, the Individual Shared Responsibility fee for not having insurance rose to 2.5 percent of household adjusted gross income, or $695 per adult and $347.50 per child, to a maximum o $2085.
Medicare and Social Security
The tax for Medicare and Social Security remained the same for 2016 (1.45 percent for Medicare and 6.2 percent for Social Security.
Retirement Plans
Contribution limits for 401(k) and 403(b) plans remains the same for 2016 and 2017 at $18,000. The catch-up contribution limit for employees age 50 or older also remains the same at $6,000. SEP IRAs for those self-employed and solo 401(k)s are up $1,000 to $54,000 for 2017.
Tax Planning
The solution to minimize your annual tax liability is to tax plan. Those who are clients of our practice are welcome to receive complimentary tax planning advice through our EZ2 Thrive program.
Professional Tax & Financial Services is located at 25124 Springfield Ct., Ste. 260, in Valencia. For more information on taxes or EZ2 Thrive, please call 661-259-1967 or 1-800-998-4829. You may also visit us at www.scvprotaxservices.com.