Getting Ready for 2017 Tax Season BEFORE the End of the Year

Items to Consider:

  • Withholding and Estimated Taxes: If you expect to owe at least $1000 in tax, the required tax payment to avoid underpayment of tax penalties and interest is the lessor of
    • 90% of the current year returns tax or
    • 100% of the tax shown on the prior year’s return (unless your AGI on preceding year is more than $150,000 for Married filing jointly, then you must have 110% and pay by 1/15/18)
  • Marital Status changes: Married or Divorced by 12/31/17 ~ the entire year is impacted
  • Year-End Gifts: you must make a gift by 12/31/17 to count in 2017; however, the gift must be cashed or deposited by the done by 12/31/17 or the gift will not count in 2017.
  • Group deductions in one year to maximize your itemized deductions: Property taxes, miscellaneous itemized deductions such as professional dues are also to be considered
  • Casualty Loss is usually deductible in the year it is sustained; however, it does not count if the insurance claim is for the full value. If the insurance proceeds are less than the loss, the deductible loss is the amount not covered by the insurance claim and in the year in which the insurance proceeds are paid.
  • Passive Activity losses are carried forward and offset passive income until the year the passive activity is disposed of and then is allowed and no longer considered passive.
  • IRC §179 maximum amount is $510,000 and phased out when qualifying property exceed $2,030,000 for 2017.
  • IRC §168(k) Bonus depreciation is 50% for 2017 and phased out with a decrease to 40% for 2018 and 30% for 2019.
  • IRC §163(h)(3) treatment of Mortgage Insurance Premiums as qualified residence interest expired 12/31/2016.
  • Business related returns will require
    • Name and SSN of the officer signing the return
    • Responses to the questions for:
      • Is the officer authorized to sign?
      • Has the business filed Form 940, 941, or other business related tax forms?
      • Were payments made that require filing Form 1099 and was it filed?

Leave a Reply

Your email address will not be published. Required fields are marked *