06 Jan Before you prepare your 2016 tax return

Q. What changes in tax law do I need to know for my 2016 returns?
— Planning ahead

A. There weren’t too many tax law changes for 2016, and that’s typical of a presidential election year.

We’re bound to see more changes for 2017 when President-elect Trump gets to work.

One change for 2016 is the penalty for not having health insurance.

“For 2016 it is now $695 per adult or 2.5 percent of income. This is up from $285 per adult or 2 percent of income in 2015,” said Gail Rosen, a Martinsville-based certified public accountant. “The maximum penalty for a family for 2016 is $2,085, up from $975 in 2015.”

We’ve also seen tax brackets move higher.

Rosen said the brackets went up by roughly 0.4 percent and each person’s personal exemption went up by $50 for 2016. The standard deduction for those who qualify as head of household rises $50 for 2016, and the earned income tax credit received a slight boost for 2016, Rosen said.

And get this one you may not have heard about: Starting this year, if you owe the federal government $50,000 or more, it has the power to take away your passport, Rosen said.

There are also new safeguards for taxpayers who file their returns online.

“Many of the W-2 forms you receive from your employer will now include a 16-digit verification code,” Rosen said. “Make sure to enter this code to combat identity and refund fraud.”

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This post was first published in January 2017.