Changes for 2017

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions.  If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor their spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.)    Here are the phase-out ranges for 2017:

• For single taxpayers covered by a workplace retirement plan, the phase-out range is $62,000 to $72,000, up from $61,000 to $71,000.
• For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $99,000 to $119,000, up from $98,000 to $118,000.
• For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $186,000 and $196,000, up from $184,000 and $194,000.
• For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income phase-out range for taxpayers making contributions to a Roth IRA is $118,000 to $133,000 for singles and heads of household, up from $117,000 to $132,000.  For married couples filing jointly, the income phase-out range is $186,000 to $196,000, up from $184,000 to $194,000.  The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
 
Source: Internal Revenue Service.

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Newly Married Couples Should Report Marriage to Marketplace

If you’re recently married, you probably have a list of things to do.  There’s one other thing you should add to that list: a health insurance review. This is particularly important if you enrolled in coverage through a Health Insurance Marketplace and you receive premium assistance in the form of advance payments of the premium tax credit.

When you apply for assistance to help pay the premiums for health coverage through the Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year using the information you provide. This information includes details about your family composition and your projected household income.
It is important for you to report life changes – known as changes in circumstances – to your Marketplace to get the proper type and amount of financial assistance and to avoid getting too much or too little in advance. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.
To report changes and to adjust the amount of your advance payments of the premium tax credit you must contact your Health Insurance Marketplace. Be sure to report all changes directly to that Marketplace because they can affect both your coverage and your final credit when you file your federal tax return.
Other changes you should report to the Marketplace include:

• Birth or adoption
• Marriage or divorce
• Moving to a different address
• Increases or decreases in your household income

These changes may also open the door for the Marketplace special enrollment period that permits health care plan changes. In most cases, the special enrollment period for Marketplace coverage is open for 60 days from the date of the life event.
The Premium Tax Credit Change Estimator can help you estimate how your premium tax credit will change if your income or family size changes during the year. This estimator tool does not report changes in circumstances to your Marketplace. Because these tools provide only an estimate, you should not rely on them as an accurate calculation of the information you will report on your tax return. You should use these estimators only as a guide to assist you in making decisions regarding your tax situation.

Source: Internal Revenue Service

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(858)247-1680

ITIN - New requirement for dependents whose passports don’t have a date of entry into the U.S.

The IRS changed its policy on acceptable documentation for issuing dependent Individual Taxpayer Identification Numbers (ITIN). The agency no longer accepts passports that do not have a date of entry into the U.S. as a stand-alone identification document for dependents from countries other than Canada or Mexico or dependents of military members overseas.

In addition to their passport, affected applicants will now be required to submit either

• U.S. medical records for dependents under age six or • U.S. school records for dependents under age 18, along with the passport.

Dependents aged 18 and over can submit a rental or bank statement or a utility bill listing the applicant’s name and U.S. address, along with their passport.

Form W-7 dependent applications submitted after Sept. 30, 2016, that don’t meet the new identification requirement, will be incomplete. Applicants will be notified by correspondence and given 45 days to respond with the appropriate documentation.

The new policy ensures that any dependent issued an ITIN will be used for legitimate tax purposes and serves to further protect the ITIN program and refund process.

Source: Internal Revenue Service

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(858)247-1680

Package Pricing - Take Advantage Now

Take advantage now for the next tax season, check our package pricing HERE

 

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Record Keeping

If you have a business, keeping track of income and expenses is part of the job.
Be sure to keep:

• Track of ALL spending;
• A copy of EVERY tax form you file;
• Separate bank accounts for business and personal purposes;
• Personal expenses separate from business expenses;
• All business records at least four years after return is filed.

contact@officetaxservices.com

(858)247-1680