by Larry L. Bertsch
From the tax deadline to healthcare regulations, there are several key changes this year that everyone should be aware of before their next tax preparation to ensure they’re in full compliance with the new laws.
Tax Changes for 2017
It’s always wise to keep up with updated laws to avoid unnecessary delays and/or fines. You can also prepare yourself when it comes to planning health care coverage and other financial factors.
The following list includes the main tax changes you should consider this year:
2017 tax deadline
This year, taxpayers will have an additional three days to ensure their taxes are in order. Taxes will be due on April 18 since the usual April 15 date falls on a Saturday, followed by Easter and the Federal holiday on Easter Monday.
Senior medical expense deductions
In the past, seniors were allowed to deduct medical expenses higher than 7.5% of their income when itemizing their taxes. For 2017, senior medical expenses must be higher than 10% of their Adjusted Gross Income (AGI) to claim the deduction on their return.
Renewal of ITINs
Taxpayer identification numbers, or ITINs, are used by individuals who are not eligible for a social security number but have tax-filing obligations. For 2017, the Protecting Americans from Tax Hikes (PATH) Act is requiring that certain ITINs get renewed before the return can be processed.
ITINs that haven’t been used on a return in the past three years must be renewed. The same is true for any ITIN with middle digits 78 or 79. Those who try to file with an expired ITIN could experience significant return and refund delays as well as denial of tax benefits, so it’s essential to renew in time.
Self-employed health care limits
The limits for tax-deferred Medical Savings Accounts (MSAs) for the self-employed are increasing this year. Taxpayers will see a raise of $50 for the:
- Maximum deductible amount for out-of-pocket expenses for self-only coverage
- Deductible limit on a plan with family coverage
- Minimum deductible amount for annual family coverage
Additionally, the family coverage limit on out-of-pocket medical expenses has increased $100.
Identity theft protection
To combat identity theft, the new law states that taxpayers must verify their identity when using a software product to self-prepare. To do so, they will need the AGI from their prior-year tax return to electronically sign the 2017 forms.
Tax bracket adjustments are marginal for 2017. They range from a $50 income increase for single filers in the lowest bracket to a $3,550 increase to reach the 39.6% tax bracket for Head of Household filers. Single filers will experience a $50 raise for standard deductions while married couples who file jointly will see a $100 increase.
By brushing up on the new laws, you’ll know what to expect when it comes time to file this tax season. Use this list and the IRS website to stay abreast of the changes for 2017 to make sure you’re not surprised by a new or updated regulation.
|Larry L. Bertsch, CPA & Associates, a top certified public accountants firm, has been offering quality accounting and tax preparation services to entire Las Vegas market since 2003.|