Now Accepting 2017 Income Tax Returns
The widely anticipated day has arrived: Tax Season 2017! The IRS began accepting income tax returns today. Remember, most returns will experience delays, especially those with Earned Income Credit and Child Tax Credit. Overall, taxpayers have until April 18th, 2017 to be considered filed on time and escape penalties and interests.
Earned Income Credit
The tax year 2017 maximum Earned Income Credit amount is $6,318 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,269 for tax year 2016. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phase-outs.
For calendar year 2017, the dollar amount used to determine the penalty for not maintaining minimum essential health coverage is $695.
For tax year 2017, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $112,000, up from $111,000 for tax year 2016.
For tax year 2017, the foreign earned income exclusion is $102,100, up from $101,300 for tax year 2016.
Estates of decedents who die during 2017 have a basic exclusion amount of $5,490,000, up from a total of $5,450,000 for estates of decedents who died in 2016.
Several changes have occurred between 2015 and 2016 tax year. With a new president; new administration; and promised changes to the tax code, we can expect more changes to occur. Strategic tax planning with your tax professional is an excellent way to help you optimize your tax filing experience each year.
TIP: What You Need to Know About Extension to File Tax Returns
Counting today, we have 8 days before the IRS starts accepting tax returns. With that, I would like to clear up a few misconceptions for taxpayers who are planning on filing an extension.
An extension gives you extra time to File your tax return. Yes! However, an extension does NOT give you extra time to pay any taxes due. Any taxes owed – even when you file an extension – will still be due by the due date. An extension can help reduce penalties, but any outstanding balance will still be charged a late payment penalty and interest.
Not everyone qualifies for an extension. For example, taxpayers who were approved for an Offer in Compromise are still required to file by the due date during their five-year probationary period. If you don't file by the due date, the IRS can revoke your offer-in-compromise and re-instate the original amount you owed. Likewise, contributions to a Traditional IRA and/or Roth IRA are due by the original April deadline.
“All CPA are certified accountants, but not all accountants are CPAs.” (unknown)