News

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Closed - Friday, Saturday, and Sunday


 

2017 will be an interesting year. There will be some changes, but we do not know what they are yet. Our opinion is that not much will change that will be effective for 2017, but legislation will be effective begining in 2018.

Stay Tuned!

 

Most 2016 tax provisions remain similar to 2015 as they were extended.

Florida Businesses:

Any business that is a Corporation, Sub-S Corporation, LLC, or Partnership need to renew their annual report at www.sunbiz.org. You will get no notification by mail from the Florida Division of Corporations, only email. This must be done prior to May 1st each year. This is NOT part of your tax return preparation. The penalty for filing late starts at $400 and can go to $600 per year.

Watch out for scams. If you received something by mail, it is probably a scam. Call our office if you need to verify.

 

IRS:

IRS is reviewing personal tax returns using mail-in audits. They request your information by mail. Note that there are several fraud scams out there. IRS will never call you and you should check with us for EVERY contact you receive from IRS for authenticity.

There are so many fraudulent scenarios out there you should suspect everything. Contact us directly if you have questions or want to verify.
 

FOR INDIVIDUALS:

The Affordable Care Act (OBAMACARE):

The Affordable Care Act (OBAMACARE) is still effective for 2016 and 2017. This law is so complicated we can not offer any general information that would be accurate. This requires planning on a client by client level. even though President Trump is working to change this law we do not know when any effective dates of change would be. For more information about your coverage options, financial assistance and to view the plans available to you or your family, visit the Marketplace at www.HealthCare.gov

 

Tax Rates

Income tax rates are 0%, 10%, 15%, 25%, 28%, and 33%. The 35% tax bracket continues to apply for some taxpayers. Taxpayers above certain income thresholds are subject to the 39.6% tax bracket. All tax brackets will be adjusted each year for inflation.

Child Tax Credit

The new law is permanently set at $1,000 per qualifying child. Phase out limits still apply.

Child and Dependent Care Expenses

The tax credit for child and dependent care expenses ranges from 20% to 35% of the smallest of:
• $3,000 ($6,000 for two or more qualifying persons).
• Qualified expenses incurred and paid.
• The taxpayer’s earned income.
• The spouse’s earned income.
The $3,000 and $6,000 expense limit was scheduled to be reduced to $2400 and $4,800 and the 35% maximum credit is permanent.

Sales Tax Deduction

Taxpayers can elect to deduct either state and local sales taxes, or state and local income taxes as itemized deductions, but not both. If the taxpayer elected to deduct sales tax, the taxpayer could either add actual taxes paid on purchases from receipts, invoices, etc., or use the amount from the optional state sales tax tables. The taxpayer can also add to the table amount sales taxes paid on motor vehicles, boats, homes, and materials used to build a home.

American Opportunity Credit

The American Opportunity Credit is a credit for college tuition of 100% of the first $2,000 of qualified education expenses and 25% of the next $2,000 of qualified expenses, for a total credit of $2,500. The credit is available for the first four years of education. Course materials, including books, computers, calculators, etc. REQUIRED for enrollment or attendance were also considered qualified expenses. The credit and AGI phaseouts are not adjusted annually for inflation.

Tuition and Fees Deduction

The tuition and fees deduction allows taxpayers to deduct up to $4,000 of qualifying educational expenses as an above-the-line tax deduction. Qualifying expenses include tuition and required enrollment fees, course-related books, supplies, and equipment, if paid to the institution as a condition of enrollment. The deduction has income limitations.

Alternative Minimum Tax (AMT)

AMT is still here...
 

Capital Gain Rates

Long Term Capital Gains still have a reduced rate based on your tax bracket.

FOR BUSINESSES:


Mileage Rates

• The standard business mileage rate for 2016 is 54 cents per mile, for 2017 it is 53.5 cents per mile
• The moving and medical rates are 19 cents per mile in 2016, for 2017 it is 17 cents per mile
• The charitable mileage rate remains at 14 cents per mile

 

Affordable Care Act Tax Provisions for Employers

The Affordable Care Act (OBAMACARE) is still effective for 2016 and 2017. This law is so complicated we can not offer any general information that would be accurate. This requires planning on a client by client level. even though President Trump is working to change this law we do not know when any effective dates of change would be.

Gift and Estate Tax

Gifts of up to $14,000 per year, per donee may be made without filing a gift tax return. The estate tax exclusion amount is $5,450,000 and now permanent and adjusted annually for inflation.

 

Affordable Care Act Tax Provisions for Individuals and Families and The Premium Tax Credit


Still here...all of this is custom to your situation. This is a planning event. 2017 may bring major changes that are unknown at this time.
For more information about your coverage options, financial assistance and to view the plans available to you or your family, visit the Marketplace at www.HealthCare.gov

Extenders:

The $1000 Child Tax Credit for each child has been extended permanently.

The $250 educator expense for primary and secondary teachers has been extended permanently and indexed for inflation.

The enhanced Earned Income Credit amounts have been extended permanently.

The American Opportunity Credit has been extended permanently.

The adjustment to income for tuition and fees has been extended through 2016.

The State and local general sales taxes on Schedule A has been extended permanently.

The deduction for mortgage insurance premiums on Schedule A has been extended through 2016.

Qualified principal residence indebtedness income can be excluded from income through 2016.

Tax Free distributions from IRAs to charitable organizations has been extended permanently.

 

Other important points of interest:

• Traditional & Roth IRA contribution limit for 2016 and 2017 is $5,500 with a $1000 catch up contribution for individuals age 50+
• SEP IRA contribution limit in 2016 for employees is 25% of wages up to $53,000 and 20% of net SE income after 1/2 SE deduction, up to $53,000
• The standard daily per diem rates are $51 per day begining 10/1/2015.
• The threshold for medical expense deductions on schedule A is 10% of Adjusted Gross Income for those under age 65 and 7.5% for those 65 and older. The threshold for everyone of any age increases to 10% begining in 2017 as part of the Affordable Care Act.

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