2016 Tax Update - Part I

Published: 11/30/2016 12:32:55 PM

Please take a moment to review the information stated below – these are important changes that will affect most of you. If you have any questions about these please reach out to me or your CPA. Our goal is to work together to incorporate these changes seamlessly.

>>SIGNIFICANT CHANGES TO FILING DEADLINES & OTHER REVISIONS:

Revised due dates for Partnerships and C-corporations:

  • Partnership tax returns (Form 1065) will be due 3/15/2017 instead of 4/15/2017
  • C- Corporation tax returns (Form 1120) will be due 4/15/2017 instead of 3/15/2017

Revised due dates for filing 1099-Misc and W-2’s:

  • Employers will now have one filing deadline for all Federal W-2s
  • 2016 forms W-2s will be due 1/31/2017. This is true for both employee and agency copies, or whether filing paper or electronic returns.
  • 2016 Form 1099-Misc if you're filing Form 1099-Misc and reporting amounts in Box 7: Nonemployee Compensation, then you will need to meet the new filing deadline of 1/31/2017.

If you don't have amounts in Box 7, then the deadline remains February 28 for paper filings or March 31 for electronic filings.

There is an extension form that can be filed Form 8809 to submit the W-2’s or 1099-Misc later.

The above is not to be ignored as the IRS is vocal about enforcing penalties for these late filed information reports:

  • $30 per 1099, if you file within 30 days of due date; maximum penalty of $75,000. $60 per 1099,
  • if you file more than 30 days after the due date but by August 1; maximum penalty of $200,000.
  • $100 per 1099, if you file after August 1; maximum penalty of $500,000.

Revised 2016 standard mileage rate

  • 54 cents per mile for business miles driven (down from 57.5 cents per mile in 2015)

Revised social security limit for 2017 wages

  • 127,200 (up from 118,500 we had in 2015 and 2016)

Obamacare penalties are going up

  • 2.5% of your total household adjusted gross income or $695 per adult and $347.50 per child, to a maximum of $2,085.

Retirement plan limits

Contribution limits to 401(k) plans, IRAs, and flexible spending arrangements are all staying the same in 2016 as they were in 2015,

reflecting the minimal amount of inflation in the economy (as they say). No increase planned so far for 2017 numbers either.