PROFESSIONAL NEWS

 

  • 2015 Year-End Tax Planning Guide
  • Social Security Wage base Increase for 2016
  • Retirement Plan Dollar Limits for 2016
  • FAQs on Identity Protection PINs

 

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2015 Year-end Tax Planning Guide

Click here to access our 2015 Year-End Tax Planning Guide. In it, you'll find traditional year-end tax planning strategies and ways to navigate new tax planning opportunities.

Social Security Wage Base Increase for 2016

The Social Security Administration announced that the maximum earnings subject to the Social Security component of the FICA tax will remain at $118,500 for 2016. This means, that for 2016, the maximum Social Security tax that employers and employees will each pay is $7,347 ($118,500 x 6.2%).

The Medicare component remains 1.45% of all earnings, and individual with earned income of more than $200,000 ($250,000 for married filing jointly) will pay an additional 0.9% in Medicare taxes.

Retirement Plan Dollar Limits for 2016

Elective deferrals - The limit on the exclusion for elective deferrals will remain at $18,000.

Catch-up contributions - The dollar limit for catch-up contributions to an applicable employer plan other than a plan described in Code Sec. 401(k) (11) (SIMPLE 401 (k) plan) or Code Sec. 408(p) (SIMPLE IRA) for individuals aged 50 or over increased to $6,000. The dollar limit under Code Sec. 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in Code Sec. 401(k)(11) or Code Sec. 408(P) for individuals aged 50 or over remains unchanged at $3,000.

FAQs on Identity Protection Personal Identification Numbers (IP PINs)

The IRS has issued FAQs about IP PINs, which will be required, beginning 1/1/16, for all taxpayers whose Social Security numbers are on a return if an IP PIN was assigned to them. The IRS announced that, for those with and IP PIN requirement, the IP PIN must be included, regardless of whether the SSN is entered for a primary, spouse, or dependent/qualifying individual, on the following returns: Form 1040, Form 2441 and Schedule EIC.

https://www.irs.gov/Individuals/The-Identity-Protection-PIN-IP-PIN