What will you do if I say that 2016 has many tax surprises in store for you? Yes, you heard it right! Tax surprises! Do you want to know what they are?

If yes, then have a look below to find out the changes in tax laws for 2016:

# As per the ACA (Affordable Care Act) or Obamacare, if you don’t invest in any kind of health insurance, then you have to pay an additional tax. If you have failed to avail a health insurance coverage in 2015, then you have to pay:

  • The greater of 2% of your yearly household income above the tax-filing threshold.
    Maximum penalty: It’s up to the maximum cost of the national average premium to buy a Bronze Plan from the federal healthcare exchange. Or
  • $695 per adult person in the household, plus half that amount for each child.
    Maximum penalty: It’s $2,085 per family.

The costs were much less in 2014. The penalty was $95 per person or 1% of household income.

# There is a change in paperwork for the employers related to the Affordable Care Act.

In 2014, form 1095-B and form 1095-C were released by the IRS as optional paperwork for the employers.

For 2015, employers should file the form 1095-B that gives the minimal essential coverage to an individual. Whereas, form 1095-C must be filed by all large employers, having an average of 50 employees.

But, for 2016, the paperwork is mandatory.

# Due to the Emancipation Day on Friday, 15th April 2016, taxpayers in the District of Columbia have time untill 18th April 2016, to file their 2015 returns. For the ones who are settled in Maine and Massachusetts have time till 19th April 2016, to file their returns, so that they can observe Patriots Day on 18th April 2016.

# The good news for businesses and individuals filing for tax returns is that the government is changing the dates for filing. According to the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, the filing deadlines for partnerships and S corporations have changed. These entities now have time to file their returns by the 15th of the third month after the end of the tax year (that is, 15th of March for those organizations on calendar years). Whereas, C corporations are now delayed untill 15th April.

# Every year, the income level for each tax bracket changes. In 2016, if your taxable income falls under the following category, then you have to pay a tax rate of 39.6%:

  • Married filing separately: $233,475
  • Unmarried individuals: $415,050
  • Head of household: $441,000
  • Married filing joint returns: $466,950

*According to Wolters Kluwer Euronext (a global information services company), tax thresholds and deductions for 2016 filings have increased.

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