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Individual Income Tax Related Updates (December 2015)

Annual Gift Tax Exclusion amount for 2015 remains at $14,000 per donee without reducing the giver’s estate and lifetime gift tax exclusion amount.

  • The "No Health Care Insurance Penalty" has increased to the higher of 2% of household income or $325 per adult and $162.50 per child under 18.

  • As a reminder, U.S. persons holding any financial interest in, or signature or other authority over, a foreign financial account exceeding $10,000 at any time in a calendar year must file a Report of Foreign Bank and Financial Accounts (FBAR) with the Treasury Department.

  • To combat tax-related identity theft and refund fraud, the IRS is adding a new verification code on Copies B & C of some payroll firms’ W-2 forms. The objective is to verify the authenticity of Form W-2 data submitted by taxpayers on e-filed individual returns.

  • The IRS and some states are implementing additional information collection when submitting tax returns electronically. We will have a new page in the tax return organizer to request this information as part of the ongoing theft prevention efforts.

Business Tax Related Updates (December 2015)

  • Equipment Purchase – If you purchase equipment, you may qualify to make a “Section 179 election,” which allows you to expense (i.e. currently deduct) otherwise depreciable business property. For 2015, you may elect to expense up to $25,000 of qualified equipment costs (with a phase-out for purchases in excess of $200,000) if the asset was placed in service during 2015. The government is debating the extension of the more generous 2014 rules of $500,000. We will let you know if it changes.

  • Capitalization of Tangible Property – The limit for deducting expenses for purchases of items of tangible property is $2,500 for 2015. Above that, the item would need to be added to fixed assets and depreciated.

In 2016, the Small Business Health Options Program is available for employers with 100 or fewer full-time equivalent employees to look for health insurance coverage. Coverage must be offered to all full-time employees working 30 or more hours per week.

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