2017 Taxes: Change Is Here (and Coming)
Hello. I’m Steve Tacinelli, V.P. of Tax Services at Holland Financial, and I’m here to tell you about some changes to the tax rules. It is expected that 2017 will bring significant tax reform, as both Donald Trump and Congress have said this is one of their top priorities. However, 2016 is ‘in the books,’ so any changes from tax reform would apply to 2017 and future tax years.
One of the biggest changes to the 2017 tax year is the medical expense deduction for taxpayers over the age of 65. Since 2013, if you itemized instead of taking the standard deduction, you were allowed to deduct all medical expenses over 10% of your adjusted gross income (AGI). However, taxpayers over the age of 65 were able to deduct all medical expenses over 7.5% of AGI. Now, ALL taxpayers have to overcome the 10% threshold. With expectations of major changes to the Affordable Care Act coming, this is one of the ‘hot button’ issues being mentioned by legislators.
Another change which needs to be noted is that the due dates for some returns have been moved up. While April 15th is still the deadline for personal tax returns, due dates for partnerships have been changed from April 15th to March 15th. This was in response to many investors not receiving their Schedule K-1s until the last minute and then scrambling to file their personal taxes.
One last topic . . . I receive calls (more often this time of year) from clients who are continuing to come into contact with IRS scams. Always remember – the IRS will NEVER call you and demand immediate payment. They handle almost everything through the US Postal Service. They will never demand payment with specific types of pre-paid debit cards, money orders or gift cards. They will not threaten arrest if you do not pay immediately. If you receive such a call, hang up immediately! Don’t engage the caller; anything you say could give them information to use the next time they call. Also, never click on a link in an email to update your information, even if it looks like it comes from the IRS. These links can download malicious software that can compromise your personal data. Close the email and visit the correct site (type www.irs.gov into your browser).
We don’t know what changes will come to pass in 2017; we only know it will be different! As always, we will do our best to keep you informed!