As we head into the second half of 2017, it is important to be reminded of the substantial changes to the tax law that will affect this year’s returns.
The amount of time it will take for people to max out on how much of their income is subjected to Social Security has increased. Unlike the previous few years (when the maximum was $118,500), people will no longer pay into Social Security once their income exceeds $127,200—it will just take longer (and cost more) to pay it at the same 6.2% rate.
For individuals who deduct auto expenses, the standard mileage rate went down by a half a cent this year. For business travel, the rate is 53.5 cents per mile; medical or moving mileage will be deducted at 17 cents per mile.
The Nonbusiness Energy Property Credit (which would have included a credit for the installation of any windows, exterior doors, insulation, etc.) is no longer available after the end of 2016 — unless extended, like in years past. Otherwise, these expenditures for your personal residence are not eligible for a credit.
Solar Energy Credit
This 30% credit for water heating, electric power, or small wind systems will still be available at least through 2021. These improvements must be made to a residence, which could include both primary and secondary homes.
Health Savings Account
The health savings account maximum for 2017 increased by $50 from the previous year. For single coverage, it is $3400; for family coverage, it is $4400.
For businesses that extended their return from the springtime, the filing date for corporations and S-corporations will be September 15th. The September 15th date also applies to partnerships (a change from last year’s October 15th date).
IRA Charitable Contribution
The law that pertains to charitable contributions from an IRA (which go directly to a charity and are not taxed) is now permanent. Donating to a charity from IRA monies is a non-taxable event in 2017 and for the foreseeable future for those age 70 ½ or older.
Please contact me with your questions about these changes and how they may affect your 2017 returns.
Susan A. Moussi, CPA, CFP®, CDFA SMD Tax & Divorce Financial Planning Consultants, Inc. Phone: 614.429.4172 firstname.lastname@example.org