Peterson & Peterson, PC CPAs

Happy Holidays! Time for the Peterson Cookie Exchange 🍪🥛

As a fun team building project we went to Art Class Wine Glass and painted the fun stained glass logo murial.

More Tax Tips 2016: American Opportunity Tax Credit & Lifetime Learning Credits --
The American Opportunity Tax Credit (formerly Hope Scholarship Credit) was extended to the end of 2017 by ATRA, but was made permanent by PATH in 2015. The maximum credit is $2,500 per student. The Lifetime Learning Credit remains at $2,000 per return.

Interest on Educational Loans: In 2016 (as in 2015), the $2,500 maximum deduction for interest paid on student loans is no longer limited to interest paid during the first 60 months of repayment. The deduction is phased out for higher-income taxpayers with modified AGI of more than $65,000 ($130,000 joint filers).

Tax Tip of the Day: Child and Dependent Care Credit --
If you pay someone to take care of your dependent (defined as being under the age of 13 at the end of the tax year or incapable of self-care) in order to work or look for work, you may qualify for a credit of up to $1,050 or 35 percent of $3,000 of eligible expenses in 2016. For two or more qualifying dependents, you can claim up to 35 percent of $6,000 (or $2,100) of eligible expenses. For higher income earners the credit percentage is reduced, but not below 20 percent, regardless of the amount of adjusted gross income.

Tax Tip of the Day: Pease and PEP (Personal Exemption Phaseout) --
Both Pease (limitations on itemized deductions) and PEP (personal exemption phase-out) have been permanently extended (and indexed to inflation) for taxable years beginning after December 31, 2012, and in 2016, affect taxpayers with income at or above $259,400 for single filers and $311,300 for married filing jointly.

Tax Tip of the Day: Health Savings Accounts (HSAs)
Contributions to a HSA are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. Medical expenses must not be reimbursable by insurance or other sources and do not qualify for the medical expense deduction on a federal income tax return.

A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance with the exception of insurance for accidents, disability, dental, vision, or long-term care.

For 2016, a qualifying HDHP must have a deductible of at least $1,300 for self-only coverage or $2,600 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,550 for self-only coverage and $13,100 for family coverage.

Happy 2016 -- with the new year comes changes to current tax law, from retirement contributions to standard deductions -- we will be posting some of the tax changes over the coming month to help you plan for the year.

Standard Mileage Rates: The 2016 rate for business miles driven is 54 cents per mile, down from 57.5 cents per mile in 2015.

Employer-provided Transportation Fringe Benefits: If you provide these benefits to your employees, the max monthly limitation for transportation in a commuter highway vehicle as well as any transit pass is $255 in 2016, and the monthly limitation for qualified parking is $255 -- this is up $5 from 2015.

The deadline is fast approaching for 2013 individual income tax extensions. Call us today!

Have you filed your business tax return?
The extension due date for business tax returns is just around the corner – September 15th.
If you haven’t filed your return yet, give us a call!

2nd Quarter Payroll reports are due in two weeks. Don't be late!