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Tax Changes for 2016

Residential Energy Efficient Property Credit

This credit equals 30% of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. Labor costs are included when you calculate this credit. And, this year, there is no cap on the amount of credit available, except on fuel cell property. Be sure you check the manufacturer’s tax credit certification statement before purchasing these improvements.

Standard deductions for 2015

Joint return or surviving spouse $12,600
Single $6,300
Head of household $9,300
Married filing separately $6,300

Standard mileage rates

54 cents a mile for business miles
19 cents a mile for medical miles
19 cents a mile for deductible moving expenses
14 cents a mile for charitable miles

Refundable Credits

Certain tax credits are Refundable credits, whereby they can be refunded to you if the credit exceeds your tax liability. Meaning, that if the tax credit brings you to zero tax, you can get the balance of the credit refunded to you. Nonrefundable credits can bring your tax liability to zero, but the balance of the credit is not refundable to you.

Education Credit Expanded

The 2009 Recovery Act made some temporary changes to the education credits:
1. Now called the American Opportunity Tax Credit
2. Increased AGI phase out range to $80,000-90,000 for Single or Head of Household and $160,000-180,000 for Married Joint
3. Maximum credit is $2500
4. Credit is now available for the first 4 years of post-secondary education
5. 40% of the credit is now refundable
6. Required course materials are now included along with tuition and fees

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