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If you haven’t guessed already, it’s 2016 tax season we’re thinking about! And 2016 tax season will open, as planned, on January 19.
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The filing deadline to submit 2015 tax returns is Monday, April 18, 2016, rather than the traditional April 15 date. Washington, D.C., will celebrate Emancipation Day on that Friday, which pushes the deadline to the following Monday for most of the nation. (Due to Patriots Day, the deadline will be Tuesday, April 19, in Maine and Massachusetts.)
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Make sure you have all your year-end statements in hand before filing, including Forms W-2 from employers, Forms 1099 from banks and other payers, and Form 1095-A from the Marketplace for those claiming the premium tax credit.
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Other recent news refer to interest rates, which will remain the same for the calendar quarter beginning Jan. 1, 2016, as they were in the previous quarter. The rates will be:
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- 3% for overpayments [2% in the case of a corporation];
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- 5% for large corporate underpayments; and
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- 0.5% for the portion of a corporate overpayment exceeding $10,000.
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| For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3% points. |
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| The 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes, will be as of January 1, 2016, as follows: |
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- 54 cents per mile for business miles driven, down from 57.5 cents for 2015;
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- 19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015;
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- 14 cents per mile driven in service of charitable organizations.
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| Remember you always have the option of calculating the actual costs of using your vehicle rather than using the standard mileage rates. |
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| You may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. |
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| As you know, we follow closely all the news and announcements the IRS publishes regularly regarding the ever-changing tax code, as well as other information of general interest. Over the last few months, the IRS has posted on their website a series of tips and security measures that you can use to protect your personal and financial information, as well as identity from theft and scams. We have summarized below some of the best practices that you should observe when using your computer and the internet. |
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Your Social Security number, credit card numbers, and bank and utility account numbers can be used to steal your money or open new accounts in your name. Every time you are asked for your personal information think about whether you can really trust the request. In an effort to steal your information, scammers will do everything they can to appear trustworthy.
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| Give personal information over encrypted websites only. If you’re shopping or banking online, stick to sites that use encryption to protect your information as it travels from your computer to their server. Look for https on every page of the site you’re on, not just where you sign in. |
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| Protect your passwords. The longer the password, the tougher it is to crack. Use at least 10 characters; 12 is ideal for most home users. Mix letters, numbers and special characters. Try to be unpredictable – don’t use your name, birthdate or common words. Don’t use the same password for many accounts. Don’t share passwords on the phone, in texts or by email. Legitimate companies will not send you messages asking for your password. If you get such a message, it’s probably a scam. Keep your passwords in a secure place, out of plain sight. |
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| Don’t assume ads or emails are from reputable companies. Check out companies to find out if they are legitimate. Type the company or product name into your favorite search engine with terms like “review,” “complaint” or “scam.” If you find bad reviews, you’ll have to decide if the offer is worth the risk. If you can’t find contact information for the company, take your business and your financial information elsewhere. |
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Don’t overshare on social media! Even a social media post boasting of a new car can help thieves bypass security verification questions that depend on financial data that only you should know. Think before you post!
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Always retain a copy of your completed federal and state tax returns and their supporting materials. These prior-year returns will help you prepare your next year’s taxes, and receipts will document any credits or deductions you claim should question arise later.
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| If you retain paper records, you should keep them in a secure location, preferably under lock and key, such as a secure desk drawer or a safe. |
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| If you retain your records electronically on your computer, you should always have an electronic back-up, in case your hard drive crashes. You should encrypt the files both on your computer and any back-up drives you use. You may have to purchase encryption software to ensure the files’ security. |
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| Dispose of old tax records properly. Never toss paper tax returns and supporting documents into the trash. Your federal and state tax records, as well as any financial or health records should be shredded before disposal. |
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| If you are disposing of an old computer or back-up hard drive, keep in mind there is sensitive data on these. Deleting stored tax files will not remove them from your computer. You should wipe the drives of any electronic product you trash or sell, including tablets and mobile phones, to ensure you remove all personal data. Again, this may require special disk utility software. |
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| We would also like to remind you that a trusted tax professional can provide helpful information and advice in all your dealings with the IRS. |
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