As 2016 has just passed, U.S. tax residents have begun busy preparations for filing their taxes. Li Hao, a California-based accountant and partner of Worldway Immigration Group, reminds everyone that this year's tax standards have been adjusted, and people should pay special attention to these changes when filing their tax returns.
Increase in Obamacare Penalties
Although it is highly likely that Obamacare will be repealed after Trump takes office, those who have not purchased health insurance must still pay penalties based on the health insurance mandate when filing taxes this year. Accountant Li Hao points out that the penalties have increased again this year.
In addition, the maximum contribution limit for Health Savings Accounts (HSA) has been raised. This year, the maximum amount for the account has been increased by $100, reaching $6,750 in 2016, with an additional $1,000 for those over 55.
Deadline Extended to April 18; Tax Rates Slightly Increased
Li Hao also pointed out that this year's tax filing deadline is different from previous years; it has been extended to April 18 because April 15 falls on a holiday. Furthermore, due to inflation adjustments, the 2016 tax rates have increased by an average of 0.4%. Until Trump's tax cut plan becomes law, the current tax rates remain in effect.
Increases in Certain Tax Deductions
In addition to the overall tax rates, the Standard Deduction has increased by $50, reaching an average of $9,300 this year. For those filing as head of household, it has increased by $50, reaching $4,050. The Earned Income Tax Credit for low-income families has also increased; in 2014, families with children could receive a maximum refund of $5,572, while this year the maximum refund is $6,269.
The Alternative Minimum Tax (AMT) exemption for high-income earners has been adjusted for inflation by $300, increasing to $53,900, and for married couples filing jointly, it has increased by $500, reaching $83,800.
Estate taxes have also changed. Accountant Li Hao noted that the federal estate tax exemption increased from $5,430,000 in 2015 to $5,450,000 in 2016, an increase of $20,000.
He pointed out that everyone is currently watching to see if Trump will abolish the estate tax. The estate tax is a concern for many Chinese considering immigration; if the estate tax is abolished, more people may immigrate to the United States.
Worldway Immigration Group is dedicated to selecting premium EB-5 projects, helping you successfully obtain U.S. status while providing comprehensive settlement services, including tax planning, children's education, and guides for living in the U.S. Here, Worldway Immigration Group kindly reminds: Clients who have successfully immigrated to the U.S. can refer to these latest changes to adjust their tax filings, and please share this important tax information with other new U.S. immigrants. For more details, please call: 400-9626-866.