Few tax changes this year
By Staff, 01/20/17 11:14 AM
HOPE/PRESCOTT – It’s tax time, a time few look forward to.
However, this year, according to CPA Brad Crain, with Dalrymple-Crain Accounting, there are few major changes.
One of the bigger changes is the filing date this year is April 18. April 15 falls on a weekend, and April 17 is a little known holiday celebrated only in the District of Columbia, Emancipation Day. Because of this, taxes aren’t due until April 18.
A major change, he said, is in the penalties of the Affordable Care Act, as they basically doubled for those who don’t have health insurance. For adults without insurance the penalty is $695, while it’s $347.50 for children. However, he pointed out, there is a maximum of 2.5 percent above a family’s filing limit, based on income. The absolute most a family could pay would be $2,085 in penalties.
There’s also a change in the timeline for returns this year. In the past, Crain said, those who qualified for earned income credit could get their returns within a few days of filing. But, because of problems with fraud, no refunds will be issued until Feb. 15. This will affect those who traditionally have been early filers.
Some of the question Crain is usually asked about this time of year are how much can a person put in their Individual Retirement Account (IRA) or Roth IRA. For individuals under 50, the amount is $5,500, and this goes up to $6,500 for those 50 and older. Concerning the amount a person can put in their 401k plan, he said, it’s $18,000 for those under 50 and $24,00 for those 50 and above.
Identity theft, Crain said, has become a big problem in taxes the last two years. There have been times a tax return has been filed and denied because someone else had used the social security number. “People need to be aware of this. If anyone runs into it, they basically have to open a case with the IRS.” This is because the person involved will have to prove their identity. Crain said this could take up to six months, and cautions anyone who deals with it to be patient.
The rate of mileage dropped this year to 54 cents per mile, and is projected to go to 53.5 cents per mile in 2017. This amount is based primarily on gasoline prices.
Concerning tax free gifts, Crain said the maximum amount a person can donate for 2016 and 2017 is $14,000.
Patience, this year, is the key word of advice Crain has for people. He said employers have until Jan. 31, 2017 to mail out W-2 and 1099 forms. This means it could be early February before people get their tax forms and begin working on their taxes.
Crain said there’s no real changes for farmers. Their filing deadline remains March 1, but they will be helped because the depreciation rules have been solidified for now and haven’t changed.
For those who qualify for earned income credit, but don’t have health insurance, he said, the amount of their penalty will be deducted, and the amount of their return reduced accordingly.
