5 Changes That May Impact Your Taxes in 2017

As the window opens for filing tax returns for 2016, attention also shifts to what is in store for taxes in 2017.   As of current legislation, the following is a quick list of items that will most likely impact your tax filings for the year 2017.  However, because there is a new presidential administration incoming, and the environment for comprehensive tax reform appears ripe, some or all of the following may change.  Check back with us here on our blog and we will keep you updated.

  1. Medical Expense Deductions: For Tax Years beginning after December 31, 2016, itemized medical expenses for all taxpayers must exceed 10% of Adjusted Gross Income (AGI). This sunsets the earlier allowance for taxpayers over age 65 to continue to use the over 7.5% of AGI limit.
  2. New Due Dates: For Forms W-2 and 1099, for regular and extension due dates of Partnership and C Corporation returns, Form 114 Foreign Bank Reporting. Please see our comprehensive article on the new due dates here.
  3. Safe Harbor for de minimis errors on information returns: Effective for information returns and payee statements that must be filed after December 31, 2016, a de Minimis safe harbor from penalties for the failure to file correct information returns or supply correct payee statements.  For errors of $100 or less ($25 or less if the case involves tax withholding) the issuer is not required to file a corrected return, and no penalty is imposed.
  4. Due Dates for Filing ACA Information Returns: The due date for furnishing forms 1095-A, B, or C to individual taxpayers has been deferred until March 2, 2017.  Individual taxpayers do not need to wait to file their individual returns, however, it should be noted that a matching error may arise if the information reported on the taxpayer’s Form 1040 does not match what is reported to the IRS by the provider.  Forms 1094-A, B, or C that report health insurance coverage to the IRS have a deferred due date of February 28, 2017 if mailed, and March 31, 2017 if filed electronically.
  5. Brokers must now report more information: In addition to proceeds and basis reporting requirements, brokers now have additional requirements for tax-exempt obligations. For tax-exempt obligations acquired on or after January 1, 2017, a payor must report the daily portions of Original Issue Discount (OID). Also for tax years beginning after December 31, 2016 the final regulations allow, but do not require, a broker to report OID and acquisition discount for a covered security that is also tax-exempt obligation acquired before January 1, 2017.

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