written by Cara Stewart
Each new filing season may bring changes to the Form 1040, U.S. Individual Income Tax Return, as well as draft instructions for Form 1040 and any related schedules, and this year is of no exception. The following highlights some of the changes to 2016 Form 1040, its schedules and other forms, which can be found on the IRS website at www.irs.gov.
The filing deadline for 2016 individual income tax returns moves to Tuesday, April 18, 2017, because of the Emancipation Day holiday in the District of Columbia. As with previous filing seasons, taxpayers are afforded an automatic six-month extension by either filing Form 4868 or by making an electronic payment.
Delayed refunds for certain credits
The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) generally requires that no credit or refund for an overpayment for a tax year will be made to a taxpayer before the 15th day of the second month following the close of that tax year, if the taxpayer claimed the earned income tax credit (EITC) or additional child tax credit on the return. Although the IRS will begin releasing refunds for returns that claim these credits on February 15, because of the time it generally takes banking or financial systems to process deposits, it is unlikely that your refund will arrive in your bank account before the week of February 27. Where’s My Refund and the IRS2Go phone app remain the best ways to check the status of any refund.
The Affordable Care Act (ACA) requires all individuals to either carry minimum essential health coverage, unless exempt, or make shared responsibility payments. For 2016, the shared responsibility payment has increased compared to 2015. The 2016 shared responsibility payment will be the higher of: (1) 2.5 percent of the taxpayer’s annual household income above the tax filing threshold, capped at the national average of the bronze plan premium, or (2) $695 per adult and $347.50 per child under the age of 19 to a family maximum penalty of $2,085.
Limit on itemized deductions
You may not be able to deduct all of your itemized deductions if your adjusted gross income is more than $155,650 if married filing separately; $259,400 if single; $285,350 if head of household; or $311,300 if married filing jointly or qualifying widow(er).
For 2016, the standard deduction for head of household filing status has increased to $9,300. The other standard deduction amounts remain unchanged.
For information about additional changes to the 2016 tax law or any other developments affecting Form 1040 or its instructions, go to IRS.gov/form1040 or contact us at 417-881-0145 if you have further questions.