Monthly Newsletter for January 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