Most Asked About Limit Updates for 2017

by Joy Johnson on January 2, 2017

Standard Deduction: Married filing jointly – $12,700.  Single taxpayers and married individuals filing separately – $6,350.   Head of households – $9,350. Personal Exemption – $4,050.  5 fc

STANDARD MILEAGE RATES:  Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 5 cents per mile for business miles driven, down from 54 cents for 2016
  • 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
  • 14 cents per mile driven in service of charitable organizations

PENSIONS:  The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the saver’s credit all increased for 2017.

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions.  If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor their spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.)    Here are the phase-out ranges for 2017:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is $62,000 to $72,000, up from $61,000 to $71,000.
  • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $99,000 to $119,000, up from $98,000 to $118,000.
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $186,000 and $196,000, up from $184,000 and $194,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income phase-out range for taxpayers making contributions to a Roth IRA is $118,000 to $133,000 for singles and heads of household, up from $117,000 to $132,000.  For married couples filing jointly, the income phase-out range is $186,000 to $196,000, up from $184,000 to $194,000.  The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

LIMITATIONS THAT REMAIN UNCHANGED FROM 2016

  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $18,000.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $6,000.
  • The limit on annual contributions to an IRA remains unchanged at $5,500.  The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

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2017 Filing Season Begins . . .

by Joy Johnson on December 12, 2016

Tax season will officially begin on January 23, 2017.

Refunds for Returns with EITC or ACTC will be delayed.  The PATH Act of 2015 requires the IRS to hold refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until February 15. The IRS must hold the entire refund — even the portion not associated with the EITC and ACTC — until at least February 15. The IRS cautions that these refunds likely won’t arrive in bank accounts or debit cards until the week of February 27 –- if there are no processing issues with the tax return and the taxpayer chose direct deposit.

Filing Deadline is April 18:  The filing deadline to submit 2016 tax returns is Tuesday, April 18, 2017. This date is due to April 15 falling on a Saturday and the following Monday being Emancipation Day, a legal holiday in the District of Columbia.


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Still Waiting for RI Refunds?

May 22, 2016

On May 4th, WPRI, Channel 12, in Providence went looking for answers for the late refunds.  The bottom line is you should have it by the end of May and if you don’t, their excuse for not getting them out is that you are suspected of fraud.  Of course it’s not because they just can’t get […]

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IRS SCAM CALLS

May 5, 2016

If you get a call from someone claiming to be from the IRS, it’s a scam.  Just hang up on them.  The IRS will notify you by mail first if there is ever a problem.  If you get a letter from the IRS, send a copy along to us.  We’ll check it out and let […]

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Rhode Island Continues to Have Problems Issuing Refunds

April 22, 2016

If you’re still waiting for a refund from RI, you’re not alone.  They claim they are moving ahead, but based on calls, emails, and messages I’m getting from clients, not very quickly.  Here’s their statement from the end of the filing season. http://www.tax.ri.gov/Tax%20Website/TAX/Advisory/ADV%202016-09.pdf You’ll be thrilled to find out, along with knowing there is no […]

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Payment Plans and Credit Card Payments

April 14, 2016

If you can’t pay your taxes in full, you can ask for payment plans.  The links to more information for both the IRS and CT are here: IRS Payment Plans CT Payment Plans   If you’d like to pay by Credit Cards, that info is here: IRS Payments by Credit Card CT Payments by Credit Card

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Rhode Island Filing Issues

March 24, 2016

The State of Rhode Island and Providence Plantations State Employer ID numbers need to be 9 digits to clear software checks.  Many RI employers are tacking extra zeros on the end of their numbers resulting in the State asking for proof of withholding.  While it’s a huge annoyance, just send them copies of your W-2s […]

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CONNECTICUT DOR CORRECTING ITS ERRORS – MAY COST YOU MONEY

March 24, 2016

Connecticut Department of Revenue Services – http://www.ct.gov/drs/cwp/view.asp?Q=578316&A=1436&pp=12&n=1 From the CT DOR website: ERROR AFFECTING SOME RESIDENT STATE INCOME TAXPAYERS BEING CORRECTED   For Immediate Release: Friday, March 18, 2016 Hartford – Connecticut Department of Revenue Services (DRS) Commissioner Kevin Sullivan issued the following statement. “Late Thursday, DRS discovered that certain information provided to some resident income […]

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IRS Experiencing E-file Problems

February 5, 2016

The IRS has been experiencing problem with the E-file system since Wednesday but it’s back online today.  Of course there’s a huge backlog at this point, and many early returns contain EIC forms which require more authentication than most.  However, delays should be minimal. There are no problems with either CT or RI at this […]

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Penalties for Failure to File 1099s

July 6, 2015

Part of one of the new trade bills the President signed into law has, as an “offset” – or a way of paying the bill for the legislation.  This is how they write laws – or, rather, changes to them – and you can see exactly how much these penalties have increased.  The bottom line […]

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