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 https://www.irs.gov/uac/Newsroom/In-2016-Some-Tax-Benefits-Increase-Slightly-Due-to-Inflation-Adjustments,-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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What Are Some Tax Benefit Strategies for Business Owners?

One of the best benefits for business owners to consider is to adopt a retirement plan. There is a whole array of different retirement planning options that can be considered. The one that’s best for your particular business is going to depend on the demographics of your business: the compensation of the different employees, the number of employees and how much everybody makes. Other things that should be considered include a variety of other benefits plans. There’s a whole broad area called section 125 that allows you to set up plans that allow for deduction of various types of medical expenses or premiums. There are also flex-spending accounts and health savings accounts to consider. Other areas to look at are different types of executive compensation plans.

© 2014 Parsonage Vandenack Williams LLC

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How Can I Structure My Business to Pay Less Taxes?

Each business has the option to elect a variety of tax status. The first thing you should do is look at the type of business that you are engaging in and which tax status is going to offer the overall savings for your type of operation. That’s an issue that should be reviewed on an annual basis as operations and income expenses change. The tax laws are in constant flux so you should also take a look every year at what’s going on with the tax laws. Are there particular bonus depreciation options or energy credits available this particular year, and use those. Be proactive and take a look at your business every year before year-end. You can still do something if you look at it in December, but it might be too late in January. Do look at retirement plan options and all of your employee benefit plans. Those may be able to save you quite a bit in taxes.

© 2014 Parsonage Vandenack Williams LLC

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