Monthly Newsletter for January 2016

by in Newsletter on Jan. 5, 2016

During January


All Employers:  Give your employees their copies of Form W-2 for 2015 by February 1, 2016.

All Businesses:  Give annual information statements to recipients of certain payments you made during 2015.  You can use the appropriate version of Form 1099 or other information return.  Payments that may be covered include the following:

Cash Payments for fish or other aquatic life purchased from anyone engaged in the trade or business of catching fish.

Compensation for workers who are not considered employees.

Dividends and other corporate distributions.

Interest, Rent, and Royalties.

Payments of Indian gaming profits to tribal members.

Profit-sharing distributions, Retirements plan distributions, Original issue discount, prizes and awards.

Medical and health care payments.

Debt cancellation (treated as payment to debtor).

Cash payments over $10,000.


                                  New Year, New Tax Guidelines

Every New Year brings at least a few new IRS guidelines and 2016 is no different.  Brown Jenkins & Oneyear, PA, has put together a list of the most noteworthy changes.  While this list is not comprehensive, it will help most businesses and individuals understand the major changes.

 2016 Tax Quick Reference Table

Mileage Rates:                                     2015                                                            2016

                Business                                   57.5                                                   54.0 cents per mile

     Charitable                               14.0                                                  14.0 cents per mile

Medical & Moving                23.0                                                  19.0 cents per mile

Estate and Gift Tax Basic Exclusion Amount                                        $5,450,000

Gift Tax Annual Exclusion per Donee                                                     $14,000

Social Security Withholding Tax Wage Base                                        $118,500.

Medicare Withholding Tax Wage Base                                                  Unlimited

Federal Unemployment Tax Wage Base                                                               $7,000

NC Unemployment Tax Wage Base                                                         $22,300.

Threshold for Nanny Tax                                                                              $2,000.

Maximum 401(k)/403(b) Salary Deferral                                               $18,000; $24,000 if age 50

Maximum SIMPLE Plan Salary Deferral                                                  $12,500; $15,500 if age 50

Maximum IRA Annual Contribution Limitation                                  $5,500; $6,500 if age 50

Profit-Sharing Contribution Limitation                                                  $53,000

Annual Compensation Limitation                                                            $265,000

for Defined Contribution Plan

Social Security Cost of Living Adjustment                                            No increase for 2016

   (COLA) for Social Security Beneficiaries

Earning Ceilings for Social Security:

Below Full Retirement Age (FRA)                                            $15,720 Lose $1 for $2 earned

Year FRA is Attained                                                                      $41,880 Lose $1 for $3 earned

After FRA is Attained                                                                     Unlimited