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    Tax Law Changes for 2017 Tax Returns

  • Federal income tax filing deadline

    This year, the IRS's deadline to file your taxes is April 17th because April 15th is a Sunday and the Emancipation Day holiday in the District of Columbia (DC) is observed on Monday April 16th. This applies to you even if you do not live in the District of Columbia.

    If you file your tax return early and owe the IRS money, you will still have to send your payment in to the IRS by this date to avoid any penalties.

  • Delayed refunds for returns claiming certain credits

    The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act), was enacted on December 18, 2015. The PATH Act contains several changes to the tax law that affect individuals, families, businesses and help safeguard against tax fraud.

    The PATH Act mandates that the IRS not issue a refund on tax returns claiming the Earned Income Tax Credit or Additional Child Tax Credit until Feb. 15. The additional time helps the IRS stop fraudulent refunds from being issued to identity thieves and fraudulent claims with fabricated wages and withholdings.

    This applies to the entire refund, not just the portion associated with these credits.

  • IRS Electronic Filing PIN

    Electronic Filing PIN, an IRS-generated PIN used to verify your signature on your self-prepared, electronic tax return, is no longer available. To validate your signature, you must use your prior-year adjusted gross income or prior-year self-select PIN.

  • Standard deductions

    In 2017, there was an increased deduction to all filing statuses:

    • Single:  $6,350, an increase of $50
    • Married Filing Separately:  $6,350, an increase of $50
    • Head of Household:  $9,350, an increase of $50
    • Married Taxpayers Filing Jointly and Qualifying Widow(er)s:  $12,700, an increase of $100.
  • Exemptions

    The amount you can deduct for each exemption claimed on a federal income tax return in 2017 will remain at $4,050.

  • Earned Income Credit

    The earned income credit applies to working taxpayers that have earned income falling below certain thresholds.  The qualification threshold depends on the number of persons in each family.  The thresholds in 2017 to qualify for this credit include:

    • No Children:  earnings must be less than $15,010 or $20,600 if married filing jointly.
    • One Child:  earnings must be less than $39,617 or $45,207 if married filing jointly.
    • Two Children:  earnings must be less than $45,007 or $50,597 if married filing jointly.
    • Three or More Children:  earnings must be less than $48,340 or $53,930 if married filing jointly.

    The tax credits themselves have also increased in 2017, with the maximum credits that can be received as indicated below:

    • No Children:  $510
    • One Child:  $3,400
    • Two Children:  $5,616
    • Three or More Children:  $6,318
  • American Opportunity Credit

    In order to claim the American Opportunity Credit, you must now provide the employer identification number (EIN) of the institution of which your qualified expenses were paid.

  • Alternative Minimum Tax

    The Alternative Minimum Tax (AMT) exemption amount rises in 2017 to $54,300 ($84,500, for married couples filing jointly).

  • Mileage deduction rates
    Category Rate (January to December)
    Business Miles 53.5 cents per mile (down from 54 cents)
    Charitable Services 14.0 cents per mile
    Medical Travel 17 cents per mile (down from 19 cents)
  • Healthcare: Individual Shared Responsibility Provision

    In 2017, each individual taxpayer must carry the required "minimum essential coverage" each month, qualify for an exemption, or pay mandatory taxes. For those facing this new penalty, relief provisions have been written into the tax laws to help taxpayers transition into these new requirements. The minimum amount of insurance coverage you must carry is calculated per family member and then added together.

  • High income individuals: phase-out of itemized deductions and personal exemptions

    In 2017, the taxpayer's itemized deductions and personal exemptions will begin to be reduced when their adjusted gross income (AGI) reaches the following threshold amounts:

    • $261,500 - Single
    • $313,800 - Married Filing Jointly
    • $287,650 - Head of Household
    • $156,900 - Married Filing Separately

    The reduction in Itemized Deductions will be calculated as the lesser of:
    • 3% of the amount over the taxpayer's threshold amount; or
    • 80% of the total itemized deductions

    Personal exemptions will be reduced by 2% for each $2,500 (or fraction thereof) by which the taxpayer's AGI exceeds the applicable threshold amount.