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- The tax rate on net capital gains is a sliding scale from zero to 20 percent depending on the taxpayers’ income level. For most taxpayers, the tax rate on capital gains (and qualified dividends) is no higher than 15 percent.
- Beware of the wash sale rules: buying and selling the same, or substantially same, stock within 30 days results in disallowed losses.
- If your income is six figures or more, you should anticipate possible liability for the 3.8 percent net investment income (NII) tax calculated on net investment income in excess of your modified adjusted gross income (MAGI). Threshold MAGIs for the NII tax are $250,000 in the case of joint returns or a surviving spouse, $125,000 for a married taxpayer filing a separate return, and $200,000 in any other case.
- Keeping income below the thresholds is worth exploring and planning for the NII tax requires a very personalized strategy. See More
- Did you get married or divorced?
- Have a child?
- Buy a home?
- Change jobs or retire?
- Additionally, try to predict any life events in 2016 that might trigger significant income or losses, as well as a change in your filing status.
- Revisions to the Affordable Care Act.
- Not renewing the ability of taxpayers to exclude cancellation of debt on their personal residence from ordinary income. Currently, the maximum amount of debt cancellation (on a personal residence) exclusion is $2 million on a qualified principal residence.
- Hope and Lifetime Learning Credits are set to expire.
- Teachers (primary and secondary levels) will no longer be able to deduct $250 for classroom expenses. See More
Are you starting a new business? Congratulations!
Here are 5 tips to help you get off to a good start:
The success of a new business venture certainly depends on have a marketable product and the ability to create a demand for that product. However, not knowing what your tax responsibilities are can sink even the best ideas. See More