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FINANCE
KEY TAX

DEVELOPMENTS IN 2016

by Michael Wiener, E.A. One of the
T his is an update of tax developments during the 2016 domestic service employees (e.g., nannies) largest

subject to FICA is $2,000.
calendar year. Some of these may affect 2016 returns and
planning for the 2017 tax year and beyond. *For 2016 and 2017, the personal developments
Any number of these provisions are currently in effect only exemption amount is $4050. of the 2016
through the end of the tax year (2016) as *The filing deadline for 2016 calendar year,
Congress has failed to extend them. This individual returns is April 18, 2017.
list is not “all inclusive” nor in any order of *Taxpayers may pay their taxes in cash while not
strictly a tax
importance. I have chosen those which I at participating 7-Eleven stores.
think are the most important. *IRS will transmit a certification to
*The optional standard mileage rate for the State Dept. for action to deny, revoke development
valuing an employee’s use of an employer- or limit the passport of an individual who by any means,
provided auto and for independent has a seriously delinquent federal tax debt.
contractors is decreased to $.54 per mile for *For new vehicles bought and placed was the
election.
2016. in service in 2016, and that qualify for
*The exception from Cancelation of Debt (COD) income for bonus first-year depreciation, the boosted
certain discharges of qualified principle residence indebtedness was first-year dollar limit is $11,160 for autos
extended through 2016. (not trucks or vans), and $11,560 for light trucks or vans (passenger
*For 2016, taxpayers using their car to travel to a new location autos built on a truck chassis, including minivans and sport-utility
because of a change in their work location may claim a $.19 per- vehicles (SUVs) built on a truck chassis). The regular first-year luxury
mile moving expense deduction ($.17 for 2017). auto limits (e.g., for vehicles not eligible for bonus depreciation, or for
*The treatment of mortgage insurance premiums as qualified which the taxpayer elects out of the bonus depreciation) are $3,160 for
residence interest was extended through 2016. autos and $3,560 for light trucks and vans.
*The election to deduct state and local sales taxes instead of state One of the largest developments of the 2016 calendar year,
and local income taxes was made permanent. while not strictly a tax development by any means, was the election.
*15-year MACRS depreciation for qualified leasehold Although further speculation is beyond the scope of this article it is
improvement property, qualified restaurant property, and qualified undeniable that many analysts are predicting a massive overhaul of
retail improvement property was made permanent. the current tax system in 2017.
*50 percent bonus depreciation was extended to property placed
in service before 2018.
*Bonus depreciation is now allowed for all “qualified If you should have a topic that you would like me to
improvement property,” not just “qualified leasehold improvement discuss or if you should have a question, please feel free to
property.” call 239.403.4410 or e-mail me at
*The enhanced Code Sec. 179 expensing limit was made michael@mwtaxandaccounting.com.
permanent and is $500,000 for 2016 and $510,000 for 2017.
*Code Sec. 179 expensing is now allowed for air conditioning We have a new office address
and heating units. 4280 East Tamiami Trail
*The credit for energy-efficient new homes was extended through Executive Suite 302-M | Naples, FL 34112
2016.
*The enhanced American Opportunity Tax Credit (AOTC) was An enrolled agent, licensed by the US Department
made permanent with a heightened verification processes. of the Treasury to represent taxpayers before the IRS for
*For 2016 and 2017, the maximum AOTC/Hope Scholarship audits, collections and appeals. To attain the enrolled agent
Credit is $2,500. designation, candidates must demonstrate expertise in
*Form 8971 is a new form that is used to report the estate tax taxation, fulfill continuing education credits and adhere to
value of inherited property to beneficiaries. a stringent code of ethics.
*For 2016 and 2017, the threshold amount for cash payments to

74 Life in Naples | March 2017