2016 ushered in some interesting tax changes.
I will summarize some of the key changes in this blog.
Social Security: There is no hike in the 2016 Social Security wage base. It remains at $119,500.
The earnings test also did not change. If, at any time in 2016, you are 66 or older, you may earn $41,880 and not have to repay any Social Security benefit. (There is no earnings cap once a beneficiary turns 66.)
Any one ages 62-65 can earn up to $15,720 and keep their full Social Security benefits.
Medicare: Most people will pay $104.90 for Medicare Part B.
For those in the upper income brackets, the combined Part B and D premiums plus surcharges can be as high as $340.90 a month.
Health Savings Accounts: The annual cap on deductible contributions to HSA’s increases to $6750 in 2016.
The limits for deducting long term care premiums per person are:
Under age 40: $390
41 to 50: $730
51 to 60: $1460
61 to 70: $3900
70 and older: $4870
The estate and gift tax exemption for 2016 increases to $5,450,000 and the top tax rate remains at 40%.
There is significant new legislation that applies to executors of taxable estates. Executors are now required to report to the IRS and heirs the basis of inherited assets within 30 days of filing the IRS estate tax form 706.
Please know that Resonate can definitely assist providing cost basis information and works cooperatively with your other advisors toward creating best results for you and your loved ones.
The source for this information is the April 2016 Kiplinger Tax Letter.
Please be sure to meet with your tax advisor to see how this information applies to you. The let’s coordinate his or her advice with that of your Resonate team to be sure you are using all tax laws to your benefit.
This is especially important for anyone interested in legacy planning.