Monthly Archives: March 2017

It’s Not Too Late to Make Retirement Account Contributions

If you haven’t already funded your retirement account for 2016, you may still do so. You have until April 17, 2017 for contributions to a traditional IRA, deductible or not, and to a Roth IRA.

Your total contributions to all your traditional and Roth IRAs can’t be more than $5,500 ($6,500, if you’re age 50 or older) or your taxable compensation for the year, if your compensation was less than this dollar limit. Making a deductible contribution will help you lower your tax bill this year.

This IRA contribution limit does not apply to rollover contributions and Qualified reservist payments.

Working Grandparents May Be Eligible for Earned Income Tax Credit (EITC)

The Internal Revenue Service wants working grandparents raising grandchildren to be aware of the Earned Income Tax Credit (EITC) and correctly claim it if they qualify.

What is the EITC?

The EITC is a federal income tax credit for workers who don’t earn a high income ($53,505 or less for 2016) and meet certain eligibility requirements. Because it’s a refundable credit, those who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund. The EITC could put an extra $2 or up to $6,269 into a taxpayer’s pocket.

Are grandparents eligible?

Grandparents and other relatives care for millions of children, but are often not aware that they could claim the children under their care for the EITC. A grandparent who is working and has a grandchild who is a qualifying child living with him or her may qualify for the EITC, even if the grandparent is 65 years of age or older. Generally, to be a qualified child for EITC purposes, the grandchild must meet the dependency requirements.

Do any special rules apply?

Special rules and restrictions apply if the child’s parents or other family members also qualify for the EITC. There are also special rules for individuals receiving disability benefits and members of the military.

Working grandparents are encouraged to find out if they qualify for this very important credit. To qualify for EITC, you must have earned income either from a job or from self-employment and meet basic rules. Also, certain disability payments may qualify as earned income for EITC purposes. EITC eligibility also depends on family size.

Health Insurance: You may qualify for a Special Enrollment Period

You may qualify for a Special Enrollment Period if you or anyone in your household experienced these changes within the past 60 days:

Did you get married? Pick a plan by the last day of the month and your coverage can start the first day of the next month.

Have you had a baby, adopted a child, or placed a child for foster care? Your coverage can start the day of the event — even if you enroll in the plan up to 60 days afterward, and even if the event happened late in 2016.

For example: You had a baby December 17, 2016 and enroll in a 2016 plan February 8, 2017. The coverage applies to medical services from December 17 through December 31, 2016. Your 2017 plan would cover your expenses from January 1, 2017 on. Note: If the event happened in 2016, you’ll need to contact the Marketplace Call Center to enroll in 2016 coverage.

Did you get divorced or became legally separated and lost health insurance? Note: Divorce or legal separation without losing coverage doesn’t qualify you for a Special Enrollment Period.

Had a recent death in the family? You’ll be eligible for a Special Enrollment Period if someone on your Marketplace plan dies and as a result you’re no longer eligible for your current health plan.

Watch out for IRS Impersonation Telephone Scams

An aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants, has been making the rounds throughout the country. Callers claim to be employees of the IRS, but are not. These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.

Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Or, victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn’t answered, the scammers often leave an “urgent” callback request.

Do not become a victim of these scams. The IRS will never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Ask for credit or debit card numbers over the phone.

Remember: Scammers Change Tactics — Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, but variations of the IRS impersonation scam continue year-round and they tend to peak when scammers find prime opportunities to strike.

Upcoming Tax Deadlines

March

We 1 Farmers and fishermen: File Form 1040 and pay any tax due. However, you have until Apr 18 to file if you paid your 2016 estimated tax payments by Jan 17, 2017.

Th 2 Applicable Large Employers provide Forms 1095-C to full time employees; For all other providers of Minimum Essential Coverage, provide Forms 1095-B to responsible individuals.

We 15 S Corps: File Form 1120S for calendar year and pay any tax due. Give copy of Sch. K-1 to each shareholder. File Form 2553 to elect S Corp status beginning with calendar year 2017. For automatic 6-month extension, file Form 7004 and deposit estimated tax.

We 15 Partnerships: File Form 1065 for the calendar year and furnish a copy of Sch. K-1 to each partner. File Form 7004 for extension (see instructions).

We 15 Electing Large Partnerships: File Form 1065-B calendar year return. Furnish Sch. K-1 to each partner. File Form 7004 for extension (see instructions).

Fr 31 Electronically file Forms W-2, W-2G, 1098, 1099, 8027, 1094-C, 1095-C, 1094-B, and 1095-B.