ABA Tax Accounting: January 2017

Tuesday, January 31, 2017

Child and Dependent Care Credit

Experienced Small Business Accountant -If you pay someone to take care of your dependent (defined as being under the age of 13 at the end of the tax year or incapable of self-care) in order to work or look for work, you may qualify for a credit of up to $1,050 or 35 percent of $3,000 of eligible expenses in 2017. For two or more qualifying dependents, you can claim up to 35 percent of $6,000 (or $2,100) of eligible expenses. For higher income earners the credit percentage is reduced, but not below 20 percent, regardless of the amount of adjusted gross income.

If you would like to schedule a Free Initial Consultation to learn more about the tax preparation and tax planning & compliance services we offer to businesses and individuals, send us an e-mail or call Amare Berhie today at 651-300-4777 to schedule a convenient time.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Monday, January 30, 2017

Child Tax Credits

Experienced Tax Accountant – For tax year 2017, the child tax credit is $1,000 per child.

The enhanced child tax credit was made permanent this year by the Protecting Americans from Tax Hikes Act of 2016 (PATH). In addition to a $1,000 credit per qualifying child, an additional refundable credit equal to 15 percent of earned income in excess of $3,000 has been available since 2009.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Friday, January 27, 2017

Earned Income Tax Credit

Experienced Small Business Accountant - For tax year 2017, the maximum earned income tax credit (EITC) for low and moderate income workers and working families rises to $6,318, up from $6,269 in 2016. The credit varies by family size, filing status, and other factors, with the maximum credit going to joint filers with three or more qualifying children.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

Thursday, January 26, 2017

Adoption Credit

Healthcare Accounting Service — In 2017, a non-refundable (only those individuals with tax liability will benefit) credit of up to $13,570 is available for qualified adoption expenses for each eligible child.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Tuesday, January 24, 2017

2017 Tax Filing Season Opens Today

ABA Tax Accounting — The Internal Revenue Service said today that it successfully started accepting and processing 2016 federal individual income tax returns on schedule. More than 153 million returns are expected to be filed this year.

People have until Tuesday, April 18, 2017 to file their 2016 returns and pay any taxes due. The deadline is later this year due to several factors. The usual April 15 deadline falls on Saturday this year, which would normally give taxpayers until at least the following Monday. However, Emancipation Day, a D.C. holiday, is observed on Monday, April 17, giving taxpayers nationwide an additional day to file. By law, D.C. holidays impact tax deadlines for everyone in the same way federal holidays do. Taxpayers requesting an extension will have until Monday, Oct. 16, 2017 to file.

The IRS expects more than 70 percent of taxpayers to get tax refunds this year. Last year, 111 million refunds were issued, with an average refund of $2,860.

Refund Delays - A law change now requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until Feb. 15. Under this change required by the Protecting Americans from Tax Hikes (PATH) Act, the IRS must hold the entire refund — even the portion not associated with the EITC and ACTC. Even though the IRS will begin releasing EITC and ACTC refunds on Feb. 15, many early filers will still not have actual access to their refunds until the week of Feb. 27. The additional delay is due to several factors, including weekends, the Presidents Day holiday and the time banks often need to process direct deposits.

This law change gives the IRS more time to detect and prevent fraud. Beyond the EITC and ACTC refunds and the additional security safeguards, the IRS anticipates issuing more than nine out of 10 refunds in less than 21 days. However, it’s possible a particular return may require additional review and take longer. Taxpayers are reminded that state tax agencies have their own refund processing timeframes that vary, and some states may make additional reviews to ensure their refunds are being issued properly. Even so, taxpayers should file as usual, and tax return preparers should submit returns as they normally do.

New AGI requirement for e-file - All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a tax filing software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

MN Income tax filing season opened January 23, 2017

Healthcare Accounting Service – Minnesota taxpayers can begin filing their state income tax returns. This is the same date the Internal Revenue Service will begin accepting federal income tax returns. Taxpayers have until Tuesday, April 18, 2017, to file their state and federal income taxes.

The department offers tips to income tax filers as they prepare to file their taxes:

E-file and choose direct deposit. Electronically filing your return and choosing direct deposit for your refund is the most secure and convenient way to file your taxes and get your refund.

Enter your name, and any dependent’s names, exactly as they appear on Social Security cards. Double-check bank routing and account numbers used on tax forms for direct deposit. Incorrect information on tax forms can result in refund delays.

If you do file on paper, do not staple or use paperclips on your paper return. Staples and paperclips on tax returns need to be removed by hand and can slow down processing.

If you move after filing your return, contact us right away. That way anything sent to you will reach you, such as refund checks or requests for more information. You should do this even when requesting a direct deposit. Call us at 651-296-3781 or 1-800-652-9094 (toll-free) to change your address.

File your return by the April 18, 2017 due date, even if you owe more than you can pay. Pay as much as you can by the due date and contact us as soon as possible to set up a payment agreement for the remaining balance. Acting quickly can help to minimize any late payment penalties. For more information about making your payment electronically, visit our website.

If you owe. You can include your banking information on your return to make the payment on or before the due date. Another payment option is to pay electronically with our e-Services Payment System. You can specify when the payment will be taken from your checking or savings account, in advance or on the due date.

After you file:

Track Your Refund. You are able to track where your refund is in the process by using our Where’s My Refund? system. You will be able to track which of the four stages your refund is in and whether you need to take any action to allow us to complete the processing of your refund. You will see the date your refund was issued when it is finished processing.

Do not spend your refund until you see the money in your bank account. Returns may take longer to process because of the increase in attempted refund fraud due to scams, stolen personal information, and identity theft. The department will take the time necessary to review returns to make sure taxpayer dollars are not getting into the hands of criminals.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Monday, January 23, 2017

Estate and Gift Taxes

For an estate of any decedent during calendar year 2017, the basic exclusion amount is $5,490,000, indexed for inflation (up from $5,450,000 in 2016). The maximum tax rate remains at 40 percent. The annual exclusion for gifts remains at $14,000.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Friday, January 20, 2017

Pease and PEP (Personal Exemption Phaseout)

Both Pease (limitations on itemized deductions) and PEP (personal exemption phase-out) have been permanently extended (and indexed to inflation) for taxable years beginning after December 31, 2012, and in 2017, affect taxpayers with income at or above $261,500 for single filers and $313,800 for married filing jointly.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Thursday, January 19, 2017

Long-Term Capital Gains and Dividends

Long-Term Capital Gains and Dividends

In 2017 tax rates on capital gains and dividends remain the same as 2016 rates; however threshold amounts are indexed for inflation. As such, for taxpayers in the lower tax brackets (10 and 15 percent), the rate remains 0 percent. For taxpayers in the four middle tax brackets, 25, 28, 33, and 35 percent, the rate is 15 percent. For an individual taxpayer in the highest tax bracket, 39.6 percent, whose income is at or above $418,400 ($470,700 married filing jointly), the rate for both capital gains and dividends is capped at 20 percent.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Wednesday, January 18, 2017

Foreign Earned Income Exclusion

For 2017, the foreign earned income exclusion amount is $102,100, up from $101,300 in 2016.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Tuesday, January 17, 2017

Tax Changes for 2017 on Medicare Taxes

The additional 0.9 percent Medicare tax on wages above $200,000 for individuals

($250,000 married filing jointly), which went into effect in 2013, remains in effect for 2017, as does the Medicare tax of 3.8 percent on investment (unearned) income for single taxpayers with modified adjusted gross income (AGI) more than $200,000 ($250,000 joint filers). Investment income includes dividends, interest, rents, royalties, gains from the disposition of property, and certain passive activity income. Estates, trusts, and self-employed individuals are all liable for the new tax.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Thursday, January 12, 2017

Eligible Long-Term Care Premiums

Premiums for long-term care are treated the same as health care premiums and are deductible on your taxes subject to certain limitations. For individuals age 40 or younger at the end of 2017, the limitation is $410. Persons more than 40 but not more than 50 can deduct $770. Those more than 50 but not more than 60 can deduct $1,530 while individuals more than 60 but not more than 70 can deduct $4,090. The maximum deduction is $5,110 and applies to anyone more than 70 years of age.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Wednesday, January 11, 2017

AGI Limit for Deductible Medical Expenses

In 2017, the deduction threshold for deductible medical expenses remains at 10 percent (same as 2016) of adjusted gross income (AGI). Prior to January 1, 2017, if either you or your spouse were age 65 or older as of December 31, 2016, the 7.5 percent threshold that was in place in earlier tax years continued to apply. That provision expired at the end of 2016, however, and starting in 2017, the 10 percent of AGI threshold applies to everyone.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Friday, January 6, 2017

Penalty for not Maintaining Minimum Essential Health Coverage

Welcome, 2017! As the New Year rolls around, it's always a sure bet that there will be changes to current tax law and 2017 is no different. From health savings accounts to tax rate schedules and standard deductions.

For calendar year 2017, the dollar amount used to determine the penalty for not maintaining minimum essential health coverage is $695.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Thursday, January 5, 2017

Medical Savings Accounts (MSAs)

There are two types of Medical Savings Accounts (MSAs): the Archer MSA created to help self-employed individuals and employees of certain small employers, and the Medicare

Advantage MSA, which is also an Archer MSA, and is designated by Medicare to be used solely to pay the qualified medical expenses of the account holder. To be eligible for a Medicare Advantage MSA, you must be enrolled in Medicare. Both MSAs require that you are enrolled in a high-deductible health plan (HDHP).

Self-only coverage. For taxable years beginning in 2017, the term "high deductible health plan" means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,250 and not more than $3,350 (same as 2016), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,500 (up $50 from 2016).

Family coverage. For taxable years beginning in 2017, the term "high deductible health plan" means, for family coverage, a health plan that has an annual deductible that is not less than $4,500 and not more than $6,750 (up $50 from 2016), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,250 (up $100 from 2016).

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Wednesday, January 4, 2017

2017 on Health Savings Accounts (HSAs)

Tax Changes for 2017 on Health Savings Accounts (HSAs)
Contributions to a Health Savings Account (HSA) are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. Medical expenses must not be reimbursable by insurance or other sources and do not qualify for the medical expense deduction on a federal income tax return.

A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance with the exception of insurance for accidents, disability, dental care, vision care, or long-term care.

For calendar year 2017, a qualifying HDHP must have a deductible of at least $1,300 for self-only coverage or $2,600 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,550 for self-only coverage and $13,100 for family coverage.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/dentalaccountingservices.php

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider.

Tuesday, January 3, 2017

Tax Changes for 2017 on "Kiddie Tax"

Tax Changes for 2017 on "Kiddie Tax"

For taxable years beginning in 2017, the amount that can be used to reduce the net unearned income reported on the child's return that is subject to the "kiddie tax," is $1,050 (same as 2016). The same $1,050 amount is used to determine whether a parent may elect to include a child's gross income in the parent's gross income and to calculate the "kiddie tax." For example, one of the requirements for the parental election is that a child's gross income for 2017 must be more than $1,050 but less than $10,500.

For 2017, the net unearned income for a child under the age of 19 (or a full-time student under the age of 24) that is not subject to "kiddie tax" is $2,100.

We are licensed in All States. We are affordable, experienced, and friendly. We are an Authorized IRS e-file Service Provider. If you would like to schedule a Free Initial Consultation to learn more about the tax preparation and tax planning & compliance services we offer to businesses and individuals, send us an e-mail or call Amare Berhie today at 651-300-4777 to schedule a convenient time.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/HealthcareAccounting.php

Monday, January 2, 2017

Tax Changes for 2017 on Alternative Minimum Tax (AMT)

Tax Changes for 2017 on Alternative Minimum Tax (AMT)

Exemption amounts for the AMT, which was made permanent by the American Taxpayer Relief Act (ATRA) are indexed for inflation and allow the use of nonrefundable personal credits against the AMT. For 2017, the exemption amounts are $54,300 for individuals ($53,900 in 2016) and $84,500 for married couples filing jointly ($83,800 in 2016).

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/HealthcareAccounting.php

Sunday, January 1, 2017

Individuals Tax Changes for 2017

For 2017, more than 50 tax provisions are affected by inflation adjustments, including personal exemptions, AMT exemption amounts, and foreign earned income exclusion.

While the tax rate structure, which ranges from 10 to 39.6 percent, remains the same as in 2016, tax-bracket thresholds increase for each filing status. Standard deductions and the personal exemption have also been adjusted upward to reflect inflation.

Amare Berhie, Senior Accountant

CEO, ABA Tax Accounting

651-300-4777

http://www.abataxaccounting.com/HealthcareAccounting.php