In Blog, Taxes for Businesses, Taxes for Individuals

Filing season for our 2016 taxes opened January 23, 2017, and because of a holiday, the deadline for filing is April 18th this year. As we await our last W2s and 1099s, hopefully some of us are expecting a return!

What new tax laws are in store for our 2016 tax filing? What tax law changes are there to prepare for in 2017?

The IRS announced a delay in the processing of refunds for those who claim refundable credits for child  tax, educational credits, or earned income.

  • For claiming educational credit, ensure you receive the school’s 1098T form and any other documents that show your payment.
  • Dependent Care Credit includes your child’s (13 yrs and younger) camp or daycare costs. Schooling does not qualify for this credit.

Affordable Care Act

The Affordable Care Act is going to be requiring proof of health insurance coverage when filing taxes this year. An executive order was put through on January 20th to delay the Affordable Care Act, but the IRS decided to enforce the law and require individuals and employers to show proof of health insurance coverage. Click the link above to learn more.

If you will be contacting an IRS call center, you will need to verify your identity with the following:

  • Social security numbers and birth dates for everyone listed on the tax return
  • ITINs for those without SSNs
  • Filing status
  • A prior year’s tax return
  • A copy of the tax return you have a question about

Form 990-EZ used for returns for organizations exempt from income tax, has been updated to include help icons throughout the form to minimize common mistakes. Any Form 990 return is due the 15th day of the 5th month after an organization’s tax year ends.

Mileage Rates

For a car, van, pickup, or panel truck

2016                                                                                             2017

54¢ per mile for business miles driven                                  53.5¢

19¢ per mile driven for medical or moving purposes         17¢

14¢ per mile driven for charities                                             14¢

 

Retirement plan contribution changes

401(k), 403(b), 457, federal thrift savings plan

2016                                                                                                 2017

$18,000 employee contribution limit                                         $18,000

$53,000 combined contribution limit for                                  $54,000

 

Salary deferral plus profit-sharing match for 50 yrs and younger   $59,000

     60 yrs and older         $60,000

SEP plans

(used by self-employed, partners, or corporation owners)

2016                                                                        2017

$53,000 or 25% of compensation                       $54,000 or 25% compensation

 

SIMPLE, traditional, and Roth IRAs

No changes – maximum contribution is $5,500 for traditional and Roth; the catch-up limit for 50 yrs and older is $1,000.

 

2017 FSA (Health Flexible Spending Arrangement)

You may begin taking advantage of your employer’s FSA this year which provides employees the ability to use tax-free dollars to pay medical expenses not covered by other health plans. If you’re eligible for this, make sure you plan out the amount you want deducted from your paycheck (it may be too late for this year, but be prepared for next year). Self-employed individuals are not eligible for this. If you participate, you may contribute up to $2,600 during the plan year, and this can be used for eg. co-pays, deductibles, dental, vision, glasses, hearing aids, and more. Make sure you choose an amount you know you’ll use, because you may lose any unused funds by the plan’s year end.

 

Don’t forget to claim your tax deductions for individuals (and deductions for businesses) and potential tax credits! Check out our past blog posts to learn about some commonly missed ones.

For more detail on the most up-to-date tax law changes, to learn more about the financial statement preparation process, or if you’re in need of a personal accountant or an accounting firm/CPA for your business, contact D&M Accounting and we will be happy to answer any of your questions!

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