2017 Tax Updates - What's New
• Jan. 1 The first day you fund your 2016 individual retirement accounts.
• Jan. 15 Fourth quarter estimated taxes are due.
• Jan. 20 First day the IRS will begin to accept 2015 return
• Feb.14 1099 forms should be received or in the mail.
• March 15 The deadline at many companies for submitting expenses for reimbursement from your flexible spending account, which are funded with pre-tax dollars.
• April 15 The last day to file your income tax return or request an extension.
• April 15 The last day to fund a 2015 IRA
• June 15 Estimated taxes due
• Sept.15 Estimated taxes due
• Oct.15 Taxes due for those who requested an extension.
• Oct.15 Annual Medicare enrollment opens and runs thought Dec.7.
• Dec.31 Last day for making year-end contributions and tax-free gifts of up to $14,000 per recipient.
• Dec.31 Last Day for making mortgage or tax payment that can be used as deductions in 2016
2015 EITC Income Limits, Maximum Credit Amounts and Tax Law Updates
Earned Income and AGI Limits
Earned income and adjusted gross income (AGI) must each be less than:
Qualifying Children Claimed
Three or more
|Single, Head of Household or Surviving Spouse||$14,820||$39,131||$44,454||$47,747|
|Married Filling Jointly||$20,330||$44,651||$49,974||$53,267|
Investment Income LimitInvestment income must be $3,400 or less for the year.
Maximum Credit Amounts
The maximum amount of credit for Tax Year 2015 is:
• $6,242 with three or more qualifying children
• $5,548 with two qualifying children
• $3,359 with one qualifying child
• $503 with no qualifying children
The American Tax Relief Act of 2012
The American Tax Relief act extended the relief for married taxpayers, the expanded credit for taxpayers with three or more qualifying children and other provisions to December 31, 2017.
IRS Recognizes Legal Same-Sex Marriages
In June 2015, the United States Supreme Court held that all states must allow same-sex couples to marry on the same terms and conditions as opposite-sex couples, and that all states must recognize lawful same-sex marriages performed in other states. The U.S. Department of the Treasury and the Internal Revenue Service ruled in 2013 that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax creditor child tax credit.
Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country will be covered by the ruling. However, the ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law.
Why Age is Important in TAXES
• Day one Upon arrival babies can be signed up for a Social Security number
• Age 19 Children not attending college can say farewell to the so-called “kiddie tax” because they are no longer considered dependents. This provision taxes any unearned income, such as interest and dividend payments, above $2,100 in a child’s account at the same rate as the parents. For college students, the tax stays in effect until age 24.
• Age 21 This is a age at which most states say children control their own assets. That means custodial accounts such as those created under the Uniform Transfer to Minors Act need to be converted to noncustodial accounts.
• Age 26 Children age out the parents health insurance policies and must obtain their own coverage.
• Age 50 Uncle Sam lets you tuck extra funds into your tax-advantaged retirement plans starting the year you turn 50, you can put an extra $1,000—for a total of $6,500 –into either your Roth or traditional IRA . And you can put an additional $5,500 ($6,000 in 2015) into your company 401(k) plan. Since catch-up provisions are indexed to inflation, the amounts may increase in future years.
• Age 50 1/2 There is no longer an early withdrawal penalty for taking money out of tax-advantaged retirement plans.
• Age 62 You can claim Social Security, but your benefits will only be 75 percent of what you could collect at full retirement, which is age 66 for people born between 1943 and 1954. Benefits increase until reach 70, at which point there is no reason to delay payments further.
• Age 65 Time to sign up for Medicare, with initial open enrollment beginning three months before your 65th and continuing seven months. Everyone should sign up for Part A, which cover hospitalization and cost nothing. If you covered under an employee health insurance plan, however, you may be able to delay signing up for other Medicare benefits until later. But don’t miss any of the sign-up deadlines or you may be hit with delayed coverage or higher premiums.
• Age 66 If you were born between 1943 and 1954 , you’ve now reached “full retirement age” and quality for “full” Social Security benefits. “Full retirement age” gradually increases until 67 for those born in 1960 or later.
• Age 70 If you waited to take your Social Security benefits, wait no longer. You quality for the maximum benefit, which is 32 percent more than your “full” benefits at 66 and 76 percent more than your benefits age 62.
• Age 70 ½ This half birthday signal the start of annual required minimum distributions from your IRA and 401(k)s. Calculated on life expectancy and retirement account balances, the first distribution must be taken by April 1 of the year following this half birthday.
Take note: The penalty for missing this deadline is 50 percent of the distribution amount.