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Quick Tax Facts

So many questions, so little time. Managing a business and staying on top of accounting can seem overwhelming. Here are answers to some of our clients’ most common questions.

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Election to Expense Certain Depreciable Business Assets (Sec 179)

Election 2015 2016
Federal $500,000 $500,000*
State $500,000 $500,000*

*Index for inflation

Payroll Taxes

Social Security recipients under age 65 who have earnings in excess of the annual exemption amount are subject to a $1 reduction in benefits for each $2 of earnings in excess of the exempt amount. Recipients turning age 65 with earnings in excess of the annual exemption are subject to a $1 reduction in benefits for each $3 earned over the exempt amount.(Only applies to earnings for months prior to attaining 65)

Payroll Tax 2015 2016
FICA: Soc.Sec.&Medicare (Self-employed) 15.30% 15.30%
FICA: Soc.Sec.&Medicare (Employer) 7.65% 7.65%
FICA: Soc.Sec.&Medicare (Employee) 7.65% 7.65%
Social Security Taxable Wage Base $118,500 $118,500
FUTA Wage Base $7,000 $7,000
SUTA Wage Base – Wisconsin $14,000 $14,000

Retirement Pensions

Pension Plan 2015 2016
Maximum Annual Benefit for Defined Benefit Plan $210,000 $210,000
Maximum Annual Contribution Defined Contribution Plan $53,000 $53,000
Highly Comprensated Employee Definition(In general) $120,000 $120,000
SEP De minimis Compensation Amount $600 $600
SEP Nondiscrimination Compensation Amount $265,000 $265,000
401 (k) Maximum Compensation Amount $265,000 $265,000
401 (k) Maximum Exclusion $18,000 $18,000
401 (k), 403(b), and 457 Plans Catch Ups $6,000 $6,000
IRA Deduction/Roth IRA Contribution Limit(In general) $5,500 $5,500
IRA Catch Up 50 and older $1,000 $1,000
SIMPLE Contribution Limit $12,500 $12,500
SIMPLE Catch Up 50 and older $3,000 $3,000

Earnings Limitations for Recipients of Social Security Benefits

Social Security recipients under age 70 who have earnings in excess of an annual exemption amount are subject to a reduction in Social Security benefits. The table below lists the amounts that recipients of social security benefits can earn without suffering a reduction in benefits.

Earnings limitations for recipients 2015 2016
Age 62 to 64 $15,720 ann. $15,720 ann.
Year Turning 65 $41,880 ann. $41,880 ann.
Age 65 and older No earnings limit No earnings limit

Dependency Exemption

Dependency Exemption 2015 2016
Exemption amount $4,000 $4,050
Standard Deduction 2015 2016
Joint filers and surviving spouses $12,600 $12,600
Heads of household $9,250 $9,300
Single filers $6,300 $6,300
Married filing separately $6,300 $6,300

Elderly and/or Blind Taxpayers

Taxpayers who are age 65 or older or who are blind receive an additional standard deduction amount that is added to the basic standard deduction listed above. To, qualify for the additional standard deduction amount, a taxpayer must be age 65 (or blind) before the close of his tax year. Two additional amounts will be allowed to an individual who is both over 65 and blind. The additional standard deduction amounts are:

Elderly or Blind Taxpayers 2015 2016
Married and surviving spouses $1,250 $1,250
Heads of household $1,550 $1,550
Singles $1,550 $1,550