IRS announces business vehicle deduction limits for 2017

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The IRS has published depreciation limits for business vehicles first placed in service this year. These limits remain largely unchanged from 2016 limits. Because 50% bonus depreciation is allowed only for new vehicles, these limits are different for new and used vehicles.

* For new business cars, the first-year limit is $11,160; for used cars, it’s $3,160. After year one, the limits are the same for both new and used cars: $5,100 in year two, $3,050 in year three, and $1,875 in all following years.

* The 2017 first-year depreciation limit for trucks and vans is $11,560 for new vehicles and $3,560 for used vehicles. The limits for both new and used vehicles in year two are $5,700, in year three $3,450 (up $100 from 2016), and in each succeeding year $2,075.

For details relating to your 2017 business vehicle purchases, contact us.

Will your tax refund be offset by debts?

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Be aware that if you have unpaid federal or state debt, such as overdue child support, state income tax, or student loans, all or part of your 2016 income tax return may be redirected to pay the debt. This is called the offset program. If an offset occurs with your tax return, the Treasury Department’s Bureau of Fiscal Service will send you a notice. The notice will list the original refund and offset amounts, as well as the name and contact information of the agency that received the payment. If you have questions, contact our office.

Answers to common questions after you file your tax return

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You have filed your 2016 tax return, but you probably still have questions. Here are a few of the most common post-filing questions the IRS answers. Read more.

Many taxpayers have questions after they file their tax returns. The IRS provides answers to many of them. These are a few of the most common.

* How can I check the status of my refund?

You can go online to check on your refund if it has been 24 hours since the IRS would have received your e-filed tax return or four weeks after you mailed your paper return. Go to http://www.irs.gov and click on “Where’s My Refund?” You will need your Social Security number, your filing status, and the amount of your tax refund.

* What records should I keep?

Keep receipts, canceled checks, or other substantiation for any deductions or credits you claimed. Also keep records that verify other items on your tax return (W-2s, 1099s, etc.). Keep a copy of the tax return, along with the supporting records, for seven years.

* What if I discover that I made a mistake on my return?

If you discover that you failed to report some income or claim a deduction or tax credit to which you are entitled, you can correct the error by filing an amended tax return using Form 1040X, Amended U.S. Individual Income Tax Return.

* What if my address changes after I file?

If you move or have an address change after filing your return, send Form 8822, Change of Address, to the IRS. You should also notify the Postal Service of your new address so that you’ll receive any refund you’re due or any notices sent by the IRS.

For answers to other tax questions you may have, give us a call.

The importance of maintaining good tax records

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Keeping your tax records organized year-round is a good practice and will keep you from hastily assembling your documents for your annual tax preparation appointment. If you are diligent about maintaining your tax records, you won’t have to worry about losing a valuable deduction because you forgot to list expenses on your return, or having unsubstantiated items disallowed in the event of an audit.

Generally, your tax returns can be audited up to three years after filing. However, if income is underreported more than 25%, the IRS can collect underpaid taxes up to six years later. So, keeping good records means you’ll always be able to verify what you report on your tax return. Hang on to your tax records for seven years.

Why you should consider a midyear tax review

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Most people don’t include tax planning on their summertime agenda, but there are benefits to doing so. The problem with waiting until the end of the year is that you reduce the time for planning strategies to take effect. If you take the time now to schedule a midyear tax planning review, you will have eight months for your actions to make a difference on your 2017 tax return. In addition, proposed tax reform could be cause for additional changes to your tax plan. Planning now for 2017 taxes not only helps reduce your taxes, but it may help you gain control of your entire financial situation. Give us a call to set up an appointment today.

Why you should consider a midyear tax review

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Most people don’t include tax planning on their summertime agenda, but there are benefits to doing so. The problem with waiting until the end of the year is that you reduce the time for planning strategies to take effect. If you take the time now to schedule a midyear tax planning review, you will have eight months for your actions to make a difference on your 2017 tax return. In addition, proposed tax reform could be cause for additional changes to your tax plan. Planning now for 2017 taxes not only helps reduce your taxes, but it may help you gain control of your entire financial situation. Give us a call to set up an appointment today.

Worth Tweeting if I tweeted…

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May 15 is the deadline for calendar-year nonprofit organizations to file 2016 information returns.

Be aware of scams long after tax filing time. If the IRS has questions, you will get a notice in the mail.

Consider adjusting your tax withholding if you received a large refund or paid a large balance due with your 2016 tax filing.

Summer family wedding? Encourage the soon-to-be married couple to do some tax and financial planning.

Have you inherited an individual retirement account? Know the distribution rules for beneficiaries. Call for help.

Don’t accrue failure-to-file penalties. If you haven’t filed tax returns for prior years, get caught up now.

Nonprofit organizations will lose their tax-exempt status if they do not file an annual report for three consecutive years.

Contribute the maximum amount to your retirement account that your employer will match. It’s free money.

Meet with your insurance agent once a year to evaluate your coverage. Many life events can change your coverage needs.

The IRS will never call you and use threatening language about immediate payment of your taxes.

Need to correct errors on a tax return? File an amended tax return, Form 1040X.
If you contribute to a retirement plan, you may qualify for a Saver’s Credit of up to $2,000 (married) or $1,000 (single).

The IRS can use all or part of your tax refund to pay other federal or state debts that you owe.

The second installment of 2017 individual estimated tax is due on June 15, 2017.

We deal with clients that have more complicated issues: rental properties, S Corps and partnerships. Rental Properties and Law Firms are our specialty areas. If you need assistance from a CPA firm, we love new clients.