Changes for tax year 2017 :: Wamhoff Financial & Accounting

Changes for tax year 2017

By: Susan Taylor
In 2017 the medical itemized deductions have affected those that are 65 and older. In prior years they were able to use 7.5% of their adjusted gross income; however, in 2017 that will now be 10% of their adjusted gross income.

Beginning January 1, 2017 the standard mileage rate for the use of your automobile will be the following:

  • 53.5 cents per mile for business miles driven. This is down from 54 cents in 2016
  • 17 cents per mile for medical or moving purposes. This is down from 19 cents for 2016
  • 14 cents per mile driven in service of charitable organizations. This is unchanged from 2016
Retirement Contributions

For an IRA to be deductible it must meet certain criteria listed below:

  • Single taxpayer’s covered by a workplace retirement plan, the phase-out range is $62,000 to $72,000.
  • Married 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
  • 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 $194,000.
Roth IRA’s
  • The income phase out range for taxpayers making contributions to a Roth IRS is $118,000 to $133,000 for singles and head of household.
  • For married filing jointly the income phase-out is $186,000 to $196,000. Keep in mind at the maximum phase out this means that you cannot contribute to a Roth.

401(K) Plans

  • The contribution limit for 401(K) 403(b), most 457 plans, and the federal government’s Thrift Saving’s Plan remains unchanged at $18,000.
  • Catch up contributions of $6,000 for those age 50 and over remain unchanged as well
Reminder on filing “exempt” on your W-4

You can only claim exemption from withholding for the current year only if both of the following situations apply:

  • In the previous year you had a right to a refund of all the federal income tax withheld because you had no tax liability.
  • For the current year you expect a refund of all federal income tax withheld because you expect to have no tax liability.

Also keep in mind that if you are a student and working multiple jobs when you file your taxes your gross income is from all sources. So if your parents are claiming you on their return and you anticipate making over the standard deduction for a single filer you more than likely will be subject to a tax liability depending on other items that may affect your return. Also remember that a student claiming exempt must file a new Form W-4 each calendar year.

To Avoid Stiff Penalties, Employers Must Use New Form I-9.

Also as of January 22, 2017 all employers must use a new version of the Form I-9, Employment Eligibility Verification form for all new hires. The new version was published on November 14th. Failure to use the new version of the Form I-9 carries stiff monetary penalties, starting at $216 per violation.