Did Your 2016 Taxes Just Go Up?


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2015_Tax_Changes

It’s an election year and that means there are going to be a lot of political posts about taxes going back and forth. Most are opinions that it’s really hard to argue. Physical facts, though, that’s easy to prove and disprove. And if it deals with taxes, I’m going to talk about it.

A friend sent me the statement that is in the picture above. I added the red circle and line. That’s because nothing in it is 100% true.

If you find a statement on taxes that you’d like to find out whether it’s true, just post in the comments below or add it as a question in the “Got a Tax Question?” on the home page.

Are these statements true?

Here is what happened, quietly, on January 1, 2015:

Medicare tax went from 1.45% to 2.35% FALSE

The Medicare tax on paychecks when your income is over $250K (married) or $200K single went up by 0.9%. That part is true. It happened January 1, 2013.

Top income tax bracket went from 35% to 39.6% FALSE

The top income tax bracket changed 1/1/2013.

Capital gains tax rate from 15% to 28% FALSE

The top capital gains tax rate is 20%, not 28%. That’s been true since 1/1/2014.

Dividend tax rate went from 15% to 28% FALSE

            The top capital gains tax rate is 20%. That was true starting in 1/1/2015.

Estate tax went from 0% to 55%. FALSE

Estate tax maximum is 40%, which it has been for years. It’s never been 0.

A 3.5% real estate transaction tax added. FALSE

A 3.8% Medicare surtax has been added on all passive income sources.

The biggest change in 2016 related to the Affordable Care Act (Obamacare) has to do with the penalties. Each year since the penalties started in 2014, they have increased. If you don’t have medical insurance and don’t meet one of the exceptions, you will pay a penalty.

In 2014, the penalty was:

Higher of 1% of household income or total yearly premium under the marketplace

or

$95/adult & $47.50/child (maximum $285)

In 2015, the penalty was:

Higher of 2% of household income or total yearly premium

Or

$325/adult & $162.50/child (maximum $975)

In 2016, the penalty is:

Higher of 2.5% of household income or total yearly premiums

Or

$695/adult & $347.50/child (maximum $2,085)

Got a question about how Obamacare or other tax bills really impact your taxes? Let us know!


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