Did you use your vehicle for business driving in 2016? Generally, you can deduct expenses on your tax return in one of two ways: the actual expense method or the IRS-approved standard mileage rate. Here is a brief comparison:
People are living longer these days than they did five, 10 or 20 years ago. Of course, that is good news, but it also means that you may have to provide a bigger cushion in retirement than you had initially intended. What’s more, uncertainty over future Social Security benefits as baby boomers continue to swell the rolls adds to the concerns. As a result, you could face a personal shortfall, especially if you incur unforeseen expenses from a medical condition or some other situation.
Are you entitled to personal and dependency exemptions on your tax return? It might be the last year you can claim the exemption for someone—say, a child graduating from college—or exemptions may be eliminated altogether by tax reforms that could be coming in conjunction with proposed rate cuts. At the very least, however, the exemptions are still available on 2016 returns.
As the deadline for filing 2016 tax returns approaches, some taxpayers are still struggling with the rules for the 3.8% tax on “net investment income” (NII). The tax law provision authorizing this special tax was included in the Affordable Care Act (ACA), the law known as Obamacare. Although the ACA may be repealed by the new Trump administration, it would not likely be retroactive to 2016.
There is a unique tax break for business entities of all shapes and sizes contained in Section 179 of the Internal Revenue Code. Under this section, a business can elect to “expense,” or currently deduct, the cost of qualified property placed in service during the year, up to a maximum level. It is near-instant tax gratification.