2017 Tax Updates you need to know

Merrick Lawrence on October 14, 2016

Images:   Forbes, St. Paul North Area Rookies

Maximizing tax benefits and minimizing negative impacts of tax law are what tax season is all about. Every year, millions of business entities and individuals undergo this process before their respective deadlines in order to satisfy the compensatory needs of their federal government, qualifying each other’s position in their love/hate relationship while keeping each other afloat. Below are new changes being implemented for both businesses and individuals alike for the 2017 tax filing/2016 tax return season.

 

New dates for Business returns?

In 2015, Congress passed a short-term highway funding extension bill which set new due dates for partnership and C corporation tax returns. The H. R. 3236 Act instructs the IRS to allow a maximum extension of six months for the U.S. Return of Partnership Income filing documents (Form 1065), as well as allowing a similar extension to fiscal year U.S. Corporation Tax Return filing documents (Form 1120). Calendar year C corporations are allotted only a five-month extension; corporations with a June 30 year end will get a seven-month extension, both until 2026.

Implemented for tax years beginning after Dec. 31, 2015, the new due date for calendar-year partnerships is March 15, while the 15th day of the third month following the close of the fiscal year is reserved for fiscal-year partnerships. For C corporations, the new due date is the 15th day of the fourth month following the close of the corporation’s annual cycle; S corporations will continue to have a due date of March 15.

The government’s fiscal year ends on September 30th, which presents an issue to some of these changes. For example, C corporation tax returns with a drop dead date of October 15th land outside of the government’s fiscal year. Rather than redo their budget window, Congress’ best bet is forcing tax advisors to get all the C corporations in their extension period to file their returns within the government’s fiscal year.

Moreover, beginning in 2017, the 30% tax credit for businesses regarding the cost of solar heating units and fuel cells falls 20% down to 10% for those that are placed in service after 2016. For more information about the 2017 business tax updates, please visit these Forbes and IRS webpages.

 

Individual Tax Return changes

Okay, so this is one thing we know for sure: The IRS does not automatically issue refunds without a tax return being filed. Every year, acts get passed, numerical data evolves, and analytical data follows new trends. At the end of 2015, Protecting Americans from Tax Hikes PATH Act of 2015 was enacted to provide tax relief for families and individuals; incentives for charitable giving, financial growth, jobs, investments, innovation, energy production and conservation, among other multiple provisions; more importantly, modifications to tax administration.

Additionally, Forbes unveiled the IRS’ 2016 tax brackets (for taxes due April 17, 2017) as follows:

                   

2016 standard deduction amounts:

                  

 

2017 tax deductions, deferrals, exclusions and credits were also adjusted such as: student loan interest deduction, transportation and parking benefits, foreign earned income exclusion, medical savings accounts, lifetime learning credit, Hope scholarship credit, adoption credit, child & dependent care, kiddie tax, and earned income credit.

For more information about the 2017 individual income tax updates, please visit these Forbes and IRS webpages.

 

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