Tax Changes that Could Affect You and Your Business in 2017Share
Tax laws are constantly changing. In fact, there is discussion that some of these laws could change again in 2017 under the new administration. As in every year, the numbers have been tweaked for tax brackets, deduction amounts and both traditional and Roth IRA income phase-out limits. None of these routine adjustments for inflation will make a meaningful financial impact on most taxpayers, but some of the recent updates to tax laws probably will.
What can you expect, and will the overall impact be positive or negative? Here are a few of the current tax laws you should be aware of. First, those that affect individuals:
- Later refunds for some taxpayers. Beginning this year, the IRS will delay processing refunds for filers that claim the Earned Income credit or the Additional Child Tax Credit. These returns won’t be processed until after February 15, so early filers claiming these credits should plan to wait a little longer for their refunds.
- Lower healthcare deduction caps for seniors. While taxpayers over the age of 65 were previously allowed to deduct medical expenses over 7.5% of adjusted gross income, in 2017 they’ll be held to the same standards as younger filers. That means qualified expenses for healthcare won’t be deductible until they exceed 10% of AGI.
- Higher penalties for filers without health insurance. The ACA requires taxpayers without health insurance to pay a penalty, unless they qualify for one of several exemptions. For both 2016 and 2017, the penalty is the greater of 2.5% of household income above the filing threshold or $695 for each adult and $347.50 per child. The fee applies to filers and each of their uncovered spouses and dependents, with a household maximum of $2,085.
- More earned income subject to payroll taxes. As of January 1, the Social Security payroll tax will be deducted from earnings up to $127,200. That’s a significant increase from 2015 and 2016 limits of $118,500. Self-employed taxpayers will be required to pay the full 15.3% for taxable earnings up to the new, higher limit.
- ITIN renewals. All filers who have an ITIN but haven’t filed taxes for three years or more will need to renew their numbers before filing. Any numbers that have not be utilized in that period automatically expire. In addition, older ITINs will require periodic renewal, with expiration dates set by a rolling schedule based on the digits included in the numbers.
The changes for businesses are more complex, not surprisingly, and business owners are encouraged to meet with their tax professionals in order to learn what these updates may mean for their individual business. Some key changes include:
- Revised due dates for tax returns for partnerships and C-corporations
- Deferred due dates for ACA information returns
- Changes to the rules regarding automatic filing extensions
- ACA market reform requirement exemptions for qualified small employer HRAs
- Higher limits on earnings subject to Social Security withholding tax
- Expanded Section 179 deduction limits, up to $510,000
- Reduced refundable corporate AMT credits
- Safe harbor on returns and statements containing de minimis errors
If you’d like to learn more about these tax changes or anything else that affects your financial picture, please contact the AGH tax professionals.
Tagged In: 2017 tax changes for businesses, 2017 tax changes for individuals, Atlanta Accounting Firm, atlanta business advisory services firm, Atlanta CPA Firm, Higher penalties for filers without health insurance, ITIN renewals, Later refunds for some taxpayers, Lower healthcare deduction caps for seniors, More earned income subject to payroll taxes