Week in Review – 01/30/2017Bruce Doole
January 31st, 2017
It’s officially tax season, but before you start tracking down receipts and filling in income boxes, there are a few changes from last year that you need to know about.
The standard deduction for heads of household jumps $50 to $9,300 for the 2016 tax year. The other standard deductions will stay the same as they were for 2015 — $6,300 for singles and married couples filing separate returns, and $12,600 for married couples filing jointly.
Increase in health insurance penalty
The Affordable Care Act (ACA), made it easier and more cost-effective for many Americans to attain health insurance. Unless you qualify for an exemption, individuals are required to have insurance. Those choosing to go three or more consecutive months without coverage must pay a penalty when they file their taxes.
For 2016, the penalty for not having healthcare rose to 2.5% of total household adjusted gross income or $695 per adult —whichever is higher (for 2015, it was $325 per person or 2% of household income). For children under 18, the penalty is $347.50 per child, and the maximum you will pay is is $2,085 per family.
With that said, there are several exemptions that will keep you from having to pay the penalty. Some of the most common include:
• If you lived abroad for more than a year
• If you’re exempt from filing a tax return because your income is too low
• If your religion objects to the use of insurance
• If you qualify for a hardship exemption due to an issue such as homelessness, bankruptcy, eviction and similarly trying circumstance.
• If you are in prison
If you believe you qualify for an exemption, you can claim it when you file your tax return, or apply on the Healthcare.gov website.
Tax Day is April 18
Tax Day is usually April 15. This year, however — just like last year — Tax Day also falls Emancipation Day, a state holiday observed in Washington, DC. Since the IRS can’t schedule the filing deadline to take place on a holiday or weekend, April 18 is the official IRS deadline for 2017. Procrastinators around the world rejoice! You’ll have 3 extra days to get your act together this year: don’t waste it!
Source: Yahoo Finance
THIS WEEK’S ECONOMIC DATA:
- The Japan PMI Manufacturing rate jumped to 52.8 in January, up from 51.9 the previous month. This was the strongest rate listed in nearly three years.
- U.S. Existing Home Sales fell 2.8% in December, as the number of houses available on the market fell 11% for the month as well. The median price was also down 0.9%.
- U.S. New Home Sales dropped 10.4% in December, to 536,000. This was far lower than the 593,000 expected, and 62,000 less than November.
- U.S. GDP numbers for the fourth quarter were reported at 1.9%, down from 3.5% the quarter before. The main factor seemed to be a decrease in exports of soybeans. Steady consumer spending, however, suggested the economy will continue to expand.
Source: Ivy Weekly