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Tax Tip of the Week | No. 387 | Happy New Year! December 28, 2016

Posted by bradstreetblogger in : General, Tax Deadlines, Tax Planning Tips, Tax Tip, Taxes , add a comment

Tax Tip of the Week | December 28, 2016 | No. 387 | Happy New Year!

And get ready for the tax filing season.

Hopefully, you followed some of the suggestions we outlined a few years ago in TTW # 21 to organize your records.  If you did, great!  This will make filing your tax returns a lot easier this year. It also means that you and your tax advisor can spend more time on tax and financial planning issues for 2017 vs. looking back to 2016.

If you are new to our Tax Tip of the Week series, or didn’t follow our suggestions from a few years ago, now would be a good time to review TTW #21.   You might want to make getting organized your 2017 New Year’s Resolution!

This week we will look at some of the more common forms that you should be watching for in the coming weeks and months:

W-2:    Employers should mail these by 1/31/17.  If you have moved during the year, make sure former employers are aware of your new address.

W-2G:    Casinos, Lottery Commissions and other gambling entities should mail these by 1/31/17 if you have gambling winnings above a certain threshold. Note:  Some casinos will issue you a W-2G at the time you win a jackpot.  Make sure you have saved those throughout the year.

1096:    Compilation sheet that shows the totals of the information returns that you are physically mailing to the IRS. The check box for Form 1099-H was removed from line 6, while a check box for Form 1098-Q was added to line 6. The spacing for all check boxes on line 6 was expanded. The amounts reported in Box 13 of Form 1099-INT should now be included in box 5 of Form 1096 when filing Form 1099-INT to the IRS.

1098-C:    This form is for contributions of motor vehicles, boats, and airplanes. A donee organization must file a separate Form 1098-C with the IRS for each contribution of a qualified vehicle that has a claimed value of more than $500. All filers of this form may truncate a donor’s identification number (social security number, individual taxpayer identification number, adoption taxpayer identification number, or employer identification number), on written acknowledgements. Truncation is not allowed, however, on any documents the filer files with the IRS.

1099-MISC :    This form reports the total paid during the year to a single person or entity for services provided. Certain Medicaid waiver payments may be excludable from the income as difficulty of care payments.  A new check box was added to this form to identify a foreign financial institution filing this form to satisfy its chapter 4 reporting requirement.

1099-INT:    This form is used to report interest income from banks and other financial institutions. Box 13 was added to report bond premium on tax-exempt bonds. All later boxes were renumbered.  A new check box was added to this form to identify a foreign financial institution filing this form to satisfy its chapter 4 reporting requirement.

1099-DIV:    This form is issued to those who have received dividends from stocks. A new check box was added to this form to identify a foreign financial institution filing this form to satisfy its chapter 4 reporting requirement.

1099-B:    This form is issued by a broker or barter exchange that summarizes the proceeds of transactions. For a sale of debt instrument that is a wash sale and has accrued market discount, enter code “W” in box 1f and the amount of the wash sale loss disallowed in box 1g.

1099-K:    This form is given to those merchants accepting payment card transactions.  Completion of box 1b (Card Not Present transactions) is now mandatory.

K-1s:    If you are a partner in a business or a limited partner in some investments, your income and expenses will be reported to you on a K-1. The tax returns for these entities are not due until 3/15/17 (if they have a calendar-year accounting). Sometimes, you may not receive a K-1 until shortly after the entity’s tax return is filed in March.

If you are a beneficiary of an estate or trust, your share of the income and expenses for the year will also be reported on a K-1. The timing of when you may receive your K-1 is the same as outlined above.

NOTE:  Many times partnerships, estates and trusts will put their tax returns on extension.  If they do, the due date of the return is not until 9/15/17.  We often see client’s receiving K-1s in the third week of September.

If you receive, or expect to receive, a K-1 it may be best if you place your personal return on extension.  It is a lot easier to extend your return then it is to amend your return after receiving a K-1 late in the year.

So start watching your mailbox and put all of these statements you receive in that new file you created!

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 386 | Special Holiday Edition December 21, 2016

Posted by bradstreetblogger in : General, Taxes , add a comment

Tax Tip of the Week | December 21, 2016 | No. 386 | Special Holiday Edition

Enjoy the Holidays!

We are going to take a break from tax planning this week. Instead, the family of Bradstreet & Company would like to wish you and your family the most joyous holiday season and best wishes for 2017.

We hope you have enjoyed the Tax Tip of The Week this year.  Please let us know what topics you would like us to cover as we enter the New Year.

Is the Tax Tip of the Week real?

While your kids are questioning if Santa is real, we continue to receive some interesting feedback that some of you don’t realize this is really Bradstreet CPAs reaching out each week (… some suspect this is a “packaged” communication to which we add our logo.) Well, rest assured it’s us and we’d love to hear from you.

Enjoy the week and, “Yes Virgina, there is a Santa Claus”.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 385 | Some Tax Benefits to Increase Slightly in 2017 December 14, 2016

Posted by bradstreetblogger in : Deductions, tax changes, Tax Tip, Taxes , add a comment

Tax Tip of the Week | December 14, 2016 | No. 385 | Some Tax Benefits to Increase Slightly in 2017

Annual inflation adjustments will affect more than 50 tax provisions, including the tax rate schedules, in tax year 2017, the Internal Revenue Service announced.

Here are some highlights of these changes:

The standard deduction for married filing jointly rises to $12,700 for tax year 2017, up $100 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $6,350 in 2017, up from $6,300 in 2016. For heads of households, the standard deduction will be $9,350 for tax year 2017, up from $9,300 for tax year 2016.

The personal exemption for tax year 2017 remains $4,050. The exemption is subject to a phase-out that begins with adjusted gross income of $261,500 ($313,800 for married couples filing jointly). It phases out completely at $384,000 ($436,300 for married couples filing jointly).

For tax year 2017, the 39.6 percent rate affects single taxpayers whose income exceeds $418,400 ($470,700 for married taxpayers filing jointly), up from $415,050 and $466,950, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds for tax year 2017 are described in the Revenue Procedure 2016-55.

The limitation for itemized deductions to be claimed on tax year 2017 returns of individuals begins with incomes of $287,650 or more ($313,800 for married couples filing jointly).

The Alternative Minimum Tax exemption amount for tax year 2017 is $54,300 and begins to phase out at $120,700 ($84,500, for married couples filing jointly for whom the exemption begins to phase out at $160,900). The 2016 exemption amount was $53,900 ($83,800 for married couples filing jointly). For tax year 2017, the 28 percent rate applies to taxpayers with taxable incomes above $187,800 ($93,900 for married individuals filing separately).

The tax year 2017 maximum Earned Income Tax Credit is $6,318 for taxpayers filing jointly who have three 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 tax year 2017, the monthly limitation for the qualified transportation fringe benefit is $255, as is the monthly limitation for qualified parking.

For calendar 2017, the dollar amount used to determine the penalty for not maintaining minimum essential health coverage is $695.

For tax year 2017, the Lifetime Learning Education Credit begins to phase out at an AGI of $112,000, up from $111,000 for tax year 2016.

Estates of decedents who die during 2017 have a basic exclusion amount of $5.49 million, up from $5.45 million for estates of decedents who died in 2016.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 384 | New Private Debt Collection Program to Begin Next Spring December 7, 2016

Posted by bradstreetblogger in : General, tax changes, Tax Tip, Taxes , add a comment

Tax Tip of the Week | December 7, 2016 | No. 384 | New Private Debt Collection Program to Begin Next Spring

Next spring, the IRS will begin to use private collection of certain overdue federal taxes and has selected four agencies. As a condition of receiving a contract, these agencies must respect taxpayer rights and abide by certain consumer protection provisions.

The IRS will give each taxpayer and their representative written notice that their account is being transferred to a private collection agency. The agency will then send a second, separate letter to the taxpayer and their representative confirming this transfer.

The IRS will do everything it can to help taxpayers avoid confusion and understand their rights and tax responsibilities, particularly in light of continual phone scams where callers impersonate IRS agents and request immediate payment.

Private collection agencies will not ask for payment on a prepaid debit card. Taxpayers will be informed about electronic payment options for taxpayers on IRS.gov. Payments by check should be made payable to the U.S. Treasury and sent directly to the IRS, not the private collection agency.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.