Tax Facts

In order to better serve you, if you are planning a vacation or extended trip away from home during tax season, please be sure to let us know. If you started a business or purchased or sold a rental property and you did not discuss this with Denise in advance, please call our office and bring this change to our attention.

Mileage Rates and Per Diem Rates

Standard mileage rates: 2017  2016
Business or Employer 0.535 cents  0.54 cents
Medical and Moving 0.17 cents  0.19 cents
Charitable 0.14 cents  0.14 cents

IRA Contributions

There are various rules related to contributing to your IRA, please consult with your tax professional. For 2016 the maximum contribution for those less than 50 years old is $5500.00. For those 50 years and older the maximum contribution is $6500.00. These amounts remain the same for 2017.

HSA Annual Contributions

There are various rules related to contributing to your HSA account, please consult with your tax professional. For 2016 the maximum contribution for single coverage is $3350.00 and family coverage $6750.00. For those taxpayers reaching age 55 and older you will be able to contribute an additional $1000.00 for the year.

For the calendar 2017, the annual limitation on deductions for an individual with self-only coverage under a high-deductible health plan is $3400.  The annual limitation on deductions for an individual with family coverage under a high-deductible health plan is $6750.

For 2017, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1300.00 for self-only coverage or $2600.00 for family coverage, and the annual out-of-pocket expenses (deductible, co-payments, and other amounts, but not premiums) do not exceed $6550.00 for self-only coverage or $13100.00 for family coverage.

Gift Tax Exclusion

For 2016 and 2017 the amount of the gift tax exclusion has not changed and remains at $14,000.

Estates

Estates of decedents who die in 2016 can exclude $5,450,000 from federal estate taxes. This amount increases to $5,490,000 in 2017.

The PA government and local municipalities do not allow taxpayers to deduct per diem rates on their income tax returns. You must use your actual expenses.

  • Truck Drivers, Sales Reps, Employees and Owners: For federal purposes only – taxpayers in the transportation industry (truckers, stewardesses, pilots, bus driver, etc.) have a special meal and incidental expense rate of $63.00 per day when traveling in the continental United States. If you must file a PA Income Tax Return you must save all your business receipts for travel, meals and entertainment. The PA Department of Revenue does not follow federal tax law on these deductions and requires actual receipts. Please be sure to note your tips on all your meal and lodging receipts. Please contact your state representative on this issue. They need to know the burden this may put on certain taxpayers.
  • The federal government updates the meals and incidental per diem allowances once a year which can be paid to employees only. The definition of “incidental expenses” includes only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships.

Check your bank – did your check/payment clear your bank?

Anytime you issue a check to any government agency please be sure the check clears your bank. If the check does not clear your bank within 20 days you need to contact the agency. The bank might be able to help you. If it was from a tax return we completed please call our office so we can resolve the problem.

Direct Deposit

Your refund can be directly transmitted to your bank and deposited into your checking or savings account. You can even transmit your refund to your IRA account. If you plan on depositing your refund into a checking or savings account we will need a photocopy of a blank check or bank identification card, not your debit card. A deposit slip cannot be used. We also need the bank’s routing number and your account number.

Your 401k Statements

Save all your year-end 401k statements until a few years after the account is closed. Include your year-end statement with the tax information you give us at the end of the year.

Marriage/Divorce Checklist

Whether you are getting married or going through a divorce, here is a list of items to keep in mind while going through this life event:

  • Change of name – report it to the SSA. File Form SS-5, Application for Social Security Card. You can either go online to SSA.gov to download and print the form or you can call SSA at 800-772-1213 to order the form, or get it from your local SSA office.
  • Change tax withholding – Please consult with your tax professional before making changes to your Form W-4.
  • Changes in circumstances – if you receive advance payments of the premium tax credit you should report the changes in circumstances, such as marriage or divorce, to your Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments.
  • Change of address – Call your tax professional with your new address. Let the IRS know if you move. File Form 8822, Change of Address, with the IRS. Your tax professional will file this form for you if you notify them of your address change. You should also notify the U.S. Postal Service. You can change your address online at USPS.com or report the change at your local post office.

Having a yard sale? Please read the following –

Have you ever wondered if you need to pay taxes on the income you earn from selling your used stuff? Typically, since the items sell for far less than what you paid for them, the transaction is tax-free. As long as this is a once or twice a year event—and not a set-up at a farmer’s market or flea market on a regular basis—then you don’t need to worry about profits and losses, sales tax or self-employment tax.

The #1 item most taxpayers forget to bring to their tax appointment is the correct last YTD payroll stub for the calendar year from all of their employers. Look for the last payroll check you received which is dated December 2016. Below is a list of important items most taxpayers forget to bring to their tax appointment. Always remember an easy rule, if you are not sure if we need the document, bring the document to your tax appointment:

  • Form 1095
  • College tuition quarterly/semester billing statement
  • Real Estate Taxes – School, County & Township (most homeowners get a bill in the spring &       fall of each year). For your own protection please ask the tax collector to stamp your real estate tax bills paid. If you will be filing a property tax rebate your real estate tax bills must be stamped paid from the tax collector.
  • Schuylkill County Residents who are not retired, don’t forget your Occupational Privilege Assessment you pay with your real estate taxes.
  • December 31 odometer reading on vehicles used for business, rental or employers use.
  • Business or employer miles, along with commuting miles.
  • Employee business expenses – uniforms, union dues, etc.
  • Year-end inventory for business owners.
  • Sale proceeds and date of sale on property or securities sold.
  • Purchase date and cost of property or securities sold.
  • Real estate settlement sheets for refinancing and purchasing of land or real estate.
  • Canceled checks for all estimated tax payments
  • Last payroll stub from each employer for the tax filing year, the check will be dated on or before December 31, 2016.
  • Year-end 401k statement.

Please remember that our web site is updated twice a year. Tax laws change throughout the year. Certain tax laws may not impact all of us the same. It is very important to contact our office if you have any concerns or questions related to the above information.