IRS Changes You Should Know About Before Filing Your Taxes

Income Taxes, Personal Taxes, Taxes
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Changes You Should Know for Filing Your Taxes

Every year, the IRS tinkers with many of its rules to adjust for inflation and new legislation. Keeping up with all the changes can be daunting — especially because there’s a difference between the year we’re in and the tax year the changes apply to. 

Tax season officially gets under way this week. Here are some of the changes that matter as you prepare your tax return for the 2016 tax year.

Significant 2016 tax year changes

  • You get an extra three days to file. The tax filing deadline is April 18, 2017.
  • Taking the earned income tax credit or the additional child tax credit will delay any refund until Feb. 15.
  • Do you have an individual taxpayer identification number? Many expired Jan. 1. To avoid delays and not lose out on benefits, check and, if needed, fix yours.
  • The standard mileage rates for the use of a car, van, pickup or panel truck are down from last year.
  • It’s now easier to get a waiver on the 60-day time limit on rolling over your IRA or 401(k) tax-free.

» MORE: Best tax preparation software

2016 tax numbers at a glance

Top tax bracket income threshold (39.6%)
  • $466,950 married filing jointly
  • $415,050 single
Standard deduction
  • $12,600 married filing jointly
  • $6,300 single
  • $9,300 head of household
Personal exemption $4,050 (but starts phasing out when your adjusted gross income hits $259,400 if single or $311,300 for married filing jointly)
IRA contribution limit
  • $5,500
  • $6,500 if 50 or older
401(k) contribution limit
  • $18,000
  • $24,000 if 50 or older
Flexible spending account contribution limit$2,550
Health savings account contribution limit
  • $3,350 individual
  • $6,750 family
Student loan interest$2,500 maximum deduction
Lifetime Learning Credit$2,000 maximum deduction per return
Earned income tax creditup to $6,269
Income limit on itemized deductions
  • $311,300 married filing jointly
  • $259,400 single

» MORE: How to find a good tax preparer

Tina Orem is a staff writer at NerdWallet, a personal finance website. Email: torem@nerdwallet.com.