2017 Tax Update

2017 Tax Update

shutterstock_608119604.png
 

Tax time is coming up quick, and with tax reform just around the corner, I thought I would give a rundown of the changes for 2017 tax year and something to expect about tax reform.

What is Changing for 2017 Tax Year?

  • You will be required to provide you Drivers Licenses to file your federal return this year.
  • Standard Deduction increase $100 to $12,700 for 2017
  • Personal exemptions stay the same as 2016 $4,050
  • Earned Income Credit for taxpayers jointly filing with three qualifying children is $6,318 up from $6,269 for 2016
  • Tuition and Fees Deduction is going away
  • Mortgage insurance premiums deduction is going away
  • Most Residential Energy Credits are going away
  • The Penalty for not having health insurance is 2.5% of household income or $695 per adult and $347.50 per child (Max of $2,085) whichever is greater.
  • Filing Deadline for W2 & 1099 is Jan 31st
  • Filing Deadline for Partnership & S Corp Returns is March 31st
  • Filing Deadline for Individual, Trust, and Corporate Returns are due April 17th.
  • See More Changes here at the IRS.gov

What Might Change with Tax Reform?

  • Higher Standard Deduction of $24,400 vs Current of $12,700
  • The removal or limitation of State Tax and Mortgage interest as an Itemized Deduction
  • Increase in child tax credit $1,600 to $2,000
  • Corporate Tax Rate lowered to 20%
  • For More Details Check out the Tax Foundation here.

What to Do Before the End of the Year

If you were able to itemize on your taxes last year, here are some of my preferred organizations to donate to for a charitable tax credit.

Another way to lower your tax expense is topping off your 401k or IRA contributions.

  • 401k contributions are limited to $18,000
  • If you are age 50 or older, you get an additional $6,000
  • IRA contributions are limited to $5,500

If you are married and your spouse doesn't work, you can open up an IRA for them and contribute the max of $5,500 in addition to your contributions to a 401k or IRA. You have until April 17th to contribute to your 401k or IRA for it to count on your 2017 tax return.

Conclusion

Not a lot is changing for the 2017 tax year but with the recent breach of Equifax make sure to file your tax returns as soon as possible. It looks like tax reform will happen this year but won't affect the 2017 tax year. If you have any questions feel free to contact us at info@walstonadvisoryfirm.com.
 

Will tax reform affect you?

Will tax reform affect you?

Why Credit Card Transaction Fees are a Great Deal

Why Credit Card Transaction Fees are a Great Deal