Internal Revenue Service Releases 2016 Tax Numbers

On October 21, 2015, the Internal Revenue Service released the annual inflation adjustments for more than fifty tax provisions and the tax rate schedules for individuals, married individuals filing jointly, and heads of households. For 2016, Taxpayers will see a slight increase in some tax benefits, while other benefits will remain the same. Along with the tax benefits, several penalties have also been adjusted.

We updated our Key Tax Numbers which can be located on our website at the following link: Key Tax Numbers. Additionally, the IRS provided a summary of the provisions that it believes would be of the greatest interest to most tax payers. The summary and a link to the Revenue Procedure can be found at,-Others-Are-Unchanged. Alternatively, the Revenue Procedure will appear in the Internal Revenue Bulletin 2015-44 dated November 2.

© 2015 Houghton Vandenack Williams
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Lapsed “Tax Extenders” Create Uncertain Planning Environment in 2014

Many of the tax laws that taxpayers rely on for deductions and credits year after year are known as “extenders”. Extenders are enacted to expire within one or two years. Typically, at the end of that period, Congress temporarily extends those provisions. This year, however, dozens of extenders have been allowed to expire. Unless they are retroactively extended, taxpayers will not be able to rely on them in 2014. These include:

  • Bonus depreciation provisions;
  • Tax-free charitable IRA distributions;
  • Energy efficiency credits;
  • Deductions for state and local sales taxes;
  • Deductions for mortgage insurance premiums deductible as qualified interest; and
  • Above-the-line deductions for qualified tuition and related expenses. 

A number of competing bills have been introduced in Congress to address the fate of these extenders. Some proposals include addressing extenders in an attempt to broadly reform the tax system. Others involve a “no-questions-asked” extension of these lapsed extenders for another year. Until a solution is found, tax planning in 2014 is likely to involve some degree of uncertainty. Taxpayers should consult with a tax advisor as to which expired extenders might apply to them and planning alternatives to address when and if these extenders will be brought back.

© 2014 Parsonage Vandenack Williams LLC

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Tax Deductions for Animal Caregivers

Individual taxpayers that help rescue and foster animals for a charitable organization may be able to deduct unreimbursed volunteer expenses as charitable contributions on their tax returns this year.  The US Tax Court recently allowed a taxpayer that helps a local nonprofit by fostering cats in her home deduct associated unreimbursed expenses as charitable deductions.  Some of these expenses included vet expenses, pet supplies, cleaning supplies, and increased utility bills.

Individuals looking to deduct similar expenses should adhere to the following guidelines:

  1. Look to whether the charitable work “caused or necessitated” the expenses– unreimbursed expenses must be directly connected with and solely attributable to the rendition of services to a qualified charitable organization.
  2. Keep good records of all expenditures.
  3. For all expenditures greater than $250, individuals must obtain prior to filing a written acknowledgement from the donee organization, containing: a description of the services provided; a statement of whether the organization provided any consideration in return for the services; and a good faith estimate of the value of the goods and services provided to the organization.

© 2012 Parsonage Vandenack Williams LLC

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