2016 Tax Return Information
Thank you for your past patronage. I am listing my hours, along with information regarding the documents needed to prepare your return, at the bottom of this letter. I ask that you bring with you last year’s tax return, along with any documents you have always brought to us.
As always there are changes to the tax laws this year. Below is a list of changes that will have the most effect on my clients;
A new tax law requires the IRS to hold entire refunds of millions of taxpayers until at least Feb. 15. This law, called the PATH Act, contains provisions that help combat tax fraud and will iimpact taxpayers who claim the Earned Income Tax Credit or the Additional Child Tax Credit. For those who file early, they will have to wait until at least Feb. 15 to get their full refund from the IRS. It is my understanding that taxpayers claiming those credits will not see the funds deposit into their banking accounts, or have a debit card issued until February 27, 2017. I strongly suggest that you go to the IRS website for "Where's my refund" and monitor it for updates. A link to check the status of your refund is located on our links page.
Form 1095: This year all taxpayers will receive a form 1095 from their health care provider,"we must have your copy of Form 1095 in order to prepare your return.
Claiming a Dependent: In order to claim a dependent on your tax return, you are required to show what the actual relationship is between yourself and the person being claimed. (You are entitled to claim as a dependent, your qualifying child, and or your qualifying relative, see below for an explanation of each). In order to establish the relationship of a child, the child’s birth certificate is required. In the past we have just reviewed these documents, however going forward we need a copy of them for our file. Please bring with you, at the time of your filing, a copy of your child’s Birth Certificate, and Social Security Card.
- A qualifying child is a child who is you’re...Son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew)
A qualifying relative is a person who is you’re...Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild) or Brother, sister, half brother, half sister, or a son or daughter of any of them (for example, your niece or nephew) or Father, mother, or an ancestor or sibling of either of them (for example, your grandmother, grandfather, aunt, or uncle) or Stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law or Any other person (other than your spouse) who lived with you all year as a member of your household if your relationship didn't violate local law.
Education Credits: Taxpayers will not be allowed to claim the American Opportunity Credit, the Lifetime Learning Credit, or the tuition deduction unless the taxpayer has received a form 1098-T from the educational institution. This means that you must have the 1098-T before we can file your return.
Who Must file a Tax Return; As a general rule you do not have to file a federal tax return this year if your income is under the following amounts: Single = 10,350.00 Single and over 65 = 11,900, Head of Household = 17,400, Married Couples = 20,700, both over 65 = 23,200. You must file a New York State return in you meet any of the following requirements; 1) You have to file a federal return, 2) You do not have to file a federal return but your adjusted gross income plus NY additions was more then 4,000 (3,000 if single and can be claimed on another taxpayer's federal return)
Limitation on IRA Rollovers: Taxpayers, starting January 1, 2015, are limited to one rollover from one IRA to another in any 12 month period (indirect rollover). A second IRA to IRA rollover in a single year could result in income tax being due on the rollover, a 10% early withdrawal penalty, and a 6% per year excess contributions tax. There is no limit on trustee to trustee (direct rollover) transfers between IRAs. The one-per year limit does not apply to:
- rollovers from traditional IRAs to Roth IRAs (conversions)
- trustee-to-trustee transfers to another IRA
- IRA-to-plan rollovers
- plan-to-IRA rollovers
- plan-to-plan rollovers
Partnership and C Corp. Returns: The due date for these returns have been changed effective for 2015. For Partnership returns, the new date is March 15th for calendar year partnerships, and the 15th day of the third month after close of the fiscal year for fiscal year partnerships. For C Corp. returns, the new date is the 15th day of the fourth month following the close of the corporation's year, April 15th for calendar year C Corp.
Again please keep in mind that the requirement to obtain health insurance applies to you individually as well as to anyone you claim as a dependent on your return.
Another issue of importance for 2016 is the multiple possibilities of tax mistakes made primarily by your dependent children who may have worked in 2016. The simplest guidance we can provide you to avoid this mistake is: Do not allow any dependent children to file their own return, particularly college students, and do not file them yourself prior to filing your return.
Due to the substantial increase over several years of office, supply, and labor expenses, I have found it necessary to increase my fees this year. Although I would very much like to retain my current rates, I have found that increasing my rates would allow me to continue and improve my services for you.
A final note to best serve you, try and make an appointment or send in your information as early as possible. Keep in mind that again this year the returns are more complex and there are many things to be considered. If you have any questions give us a call at 718-745-6116. As usual we thank you for your business in the past and look forward to working together for many years. Thank you.
Daniel F. Magrino and Staff
January 30th to April 10th Monday, Wednesday and Friday Evenings
6pm to 9pm, Saturdays 10am to 4pm
April 12th to April 14th Office will be open 9am to 8pm
April 15th, Saturday Office will be open 10am to 4pm
April 16th, Sunday Office will be closed
April 17th, Monday Office will be open 9am to 6pm
April 18th, Tuesday Office will be open 9am to 6pm
* OPEN PRESIDENT'S DAY, FEBRUARY 20TH - 10AM TO 6PM *
Open Monday to Friday 9am to 5pm for Scheduled Appointments, Drop-Off's & Pick Up.
Close Tuesday and Thursday evenings.
|Last year's tax return||Socical Security cards and Birth Certificates for all dependents||Purchase and sale information for anything sold during the year|
|All other statements of income||Donations of property to charity||Donations of money to charity|
|W-2 forms for wages||IRA year end statements||Volunteer/Business expenses and mileage|
1099 forms for interest, dividends, retirement, social security,Unemployment, and other income
|Medical expenses||Amounts paid for higher education form 1098-T|
|Year end statements from mutual funds||Records of estimated taxes paid||Job related expenses|
K-1 forms from partnerships, corporations, and estates
|Property tax statement||Investment related expenses|
|Rental or self employment income
|1098 forms for mortgage or student loan interest||Child care provider's name, address, social security number, and amount paid|