DON'T FORGET TO REMEMBER

Some reminders as we begin the new tax year.

 

(1) From my new quarterly newsletter ROBERT D FLACH’S TAX INSIGHTS –

 

“If you plan to contribute to a traditional or Roth IRA, a Coverdell Education Savings Account, a Section 529 College Savings Plan, a Health Savings Account, or an ABLE account for tax year 2017 do it today. 

 

Thanks to tax-free compounding, by making your contributions as early as possible each year, instead of waiting until the deadline, you will have substantially more funds in the accounts when you are ready to retire, or when you need the money to pay for education, medical or disability expenses.”

 

And –

 

“Make sure, if you are financially able to do so, that you have the maximum amount set aside in your employer's 401(k), 403(b) or 457 pension plan.  And also consider contributing to a ROTH (if available) or traditional IRA.

 

The 2017 maximum contributions for tax-deferred pension plans are: 

 

• IRA = $5,500

• IRA Catch-Up Contributions at age 50 and older = $1,000

• SIMPLE Plan = $12,500

• SIMPLE Catch-Up Contributions at age 50 and older = $3,000

• 401(k), 403(b), 457, and federal Thrift Savings Plan = $18,000

• 401(k), 403(b), 457, and federal Thrift Savings Plan Catch-Up Contributions at age 50 and older = $6,000 

 

For 2017 the AGI phase-out ranges for taxpayers making contributions to a Roth IRA are:

 

•   $118,000 - $133,000 = Single and Head of Household

•   $186,000 to $196,000 = Married Filing Joint and Qualifying Widow(er)

•   $0 - $10,000 = Married Filing Separate”

 

The premiere January 2017 issue contains many more details on “Starting the Year Off Right”.

 

(2) The deadline for submitting the 4^th Quarter federal and/or state estimated tax payment for 2016 is January 17^th.  Even though the payment is made in 2017 it is for 2016.  However, if you make your 4^th Quarter state tax payment for 2016 in 2017 it is deductible on your 2017 return and not your 2016 return – if you can itemize and you elect to deduct state and local income tax instead of state and local sales tax.  Any 4^th Quarter 2015 state estimated tax payment made in January of 2016 will be deductible on your 2016 Schedule A, instead of Jan. 15.  

 

(3) Make one of your 2017 resolutions to become more informed on tax issues.  Learn what you can, and cannot, deduct on your tax return, including the special items that are unique to your trade or profession, and the rules governing any special situations that apply to you, and keep up to date on federal and state tax law changes.

 

Even if you use a tax professional to prepare your return, the more informed you are on tax matters, the more prepared you will be when go to your annual appointment.

 

One way to remain up-to-date on federal and NJ tax developments is by “subscribing” to THE WANDERING TAX PRO.  Enter your email address in the box at the top of the right hand margin.  Another way is to subscribe to ROBERT D FLACH’S TAX INSIGHTS.

 

For information on “What’s New in Taxes for 2017” under current tax law click here to download my special compilation.

 

(4) Let me repeat a reminder from fellow tax blogger Russ Fox - "Start Your 2017 Mileage Log Now".  Click here to read Russ' excellent advice.

(5) For NJ residents - the New Jersey Sales and Use Tax will be reduced from 7% to 6.875% on and after January 1, 2017.  To be perfectly honest, this will prove to be a true PITA for individuals, businesses, and accountants and tax professionals.

 

BTW - while you are reading this I am attending my first tax CPE workshop of the year.

 

TTFN