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Key Considerations for Filing Taxes in 2016

Previous Posted by Katie Hauser on January 20, 2016 Next

The following is the latest guest blog entry from Greater Boston Chamber members detailing value strategies and insight for the region’s business community. The views expressed are of the author, and not the Chamber.

Hard to believe, but it’s already the end of January – and it’s time to start preparing your 2015 tax returns (on top of worrying when the next blockbuster snow storm may be?!)

The absolute deadline may still be three months away, but don’t wait. Due to two holidays, the initial filing deadline will be April 18, 2016, for Federal returns thanks to Emancipation Day, and April 19, 2016, for Massachusetts’ state returns due to Patriots’ Day.

Here are three must-know considerations as you get started:

1). The first day taxpayers are able to begin filing their returns is January 19, 2016, for both the IRS (Federal return) and MA Department of Revenue (state return). File your taxes as soon as you receive all of your tax documents. For those that are expecting a refund, filing earlier will ensure you get your money back sooner.

2). Those who do not have health insurance may be susceptible to additional taxes under the Affordable Care Act. The penalties have increased significantly from 2014 amounts. If you have health insurance, make sure you note this on your return.

3). For those filing in Massachusetts, make sure you don’t miss out on some benefits that may be available to you:

  • Renters: Certain taxpayers may be eligible for a deduction of up to $3,000 for rental payments made on their principal rental residence in Massachusetts.
  • Bank Interest: If you receive bank interest from certain banks with a physical location in the Commonwealth of Massachusetts, you may be able to exclude up to $200 of interest depending on your filing status.
  • Commuters: For commuters who spend their mornings on the MBTA, Mass. Pike and certain other qualified routes, the money you spend on the commuter rail, MBTA , and tolls paid through an E-ZPass account may be eligible as a deduction on your return. To qualify, you have to have spent at least $150 during the 2015 tax year, and you’re not eligible to deduct amounts reimbursed by your employer.

Fun fact: The tax rate on most Massachusetts income has also decreased effective January 1, 2015, from 5.2% to 5.15%.

Not too bad, huh?

Of course this is just skimming the surface of tax law. For additional information, don’t be afraid to reach out to tax professionals for help. Happy filing!

Robert Traester, CPA is an accountant at WithumSmith+Brown, one of the largest regional public accounting firms with an excellent reputation for innovation solutions and client service. He can be reached at rtraester@withum.com.