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.
For a car, van, pickup, or panel truck
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
$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
(used by self-employed, partners, or corporation owners)
$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.
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!