2016 Tax Form Changes – Part 2

The IRS has released a number of draft tax forms and instructions for the 2016 tax year. The previous post, Part 1, looked at the Form 1040 itself.  This post, Part 2, covers related draft forms and schedules.

–Form 1040—Schedule A, Itemized Deductions

*Line 29. Limit on itemized deductions.

Itemized deductions for taxpayers with adjusted gross incomes in excess of the “applicable amount” ($311,300 for joint filers or a surviving spouse, $285,350 for a head of household, $259,400 for a single individual who isn’t a surviving spouse, and $155,650 for marrieds filing separately) may be reduced.

–Form 1040—Schedule B, Interest and Ordinary Dividends

*The exclusion for education-related savings bond interest phases out at higher income levels. The phase out begins at modified AGI above $77,550 ($116,300 on a joint return).

–Form 1040—Schedule C, Profit Or Loss From Business

*Line D. Employer ID number.

The Line D instructions provide that the sole owner of a limited liability company that is not treated as a separate entity for federal income tax purposes, and that has an Employer ID Number issued in the LLC’s legal name because it is required to file employment tax returns, should enter the LLC’s EIN here.

*Part II. Expenses. Line 27a. Other expenses.

Taxpayers can also elect to deduct the costs of certain qualified live theatrical productions that have their first public performance for a paying audience.

–Form 4562, Depreciation and Amortization

*Part I. Election to expense certain tangible property under Sec. 179.

The maximum section 179 expense deduction is $500,000 ($535,000 for qualified enterprise zone property). This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $2,010,000.

*Part V. Listed property.

First-year luxury auto limits for vehicles first placed in service in 2016 are $3,160 for autos and $3,560 for light trucks or vans.

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