Tax Law Changes
On January 23, 2017, the IRS announced it is opening the 2016 tax filing season and published a summary of the top tax changes it made last year. Many will impact some of the 153 million Americans who file tax 2016 returns. Some of these changes may affect you:
1. Three Extra Days - The tax filing deadline is delayed because April 15 falls on a weekend and Emancipation Day in Washington, D.C. is observed on April 17. Returns may be filed until April 18, 2017. If you extend six months, the return will be due October 16, 2017.
2. Refund Delays - If you file early and claim the Earned Income Tax or Added Child Tax, the IRS must hold your refund until February 15. The first refunds for filers who claim these credits is expected to be the week of February 27.
3. Standard Mileage Rates - The IRS publishes mileage rates each year for business use, medical and moving travel and charitable travel. For 2016, the business use qualifies for $0.54 per mile, medical and moving expenses are $0.19 per mile and charitable travel is $0.14 per mile.
4. ABLE Accounts - It is now possible to create a special account for persons who become disabled before age 26. Donors are permitted to make annual gifts with the current exclusion amount of $14,000 per year. While the gift does not qualify for an income tax deduction, the account may grow and distributions for a disabled person’s qualified expenses are tax-free.
5. Renewing Individual Taxpayer Identification Numbers – An ITIN is used by some taxpayers in place of a Social Security number. If it has not been used in three years or the middle digits are 78 or 79, the ITIN will expire. It may take up to 11 weeks to renew the ITIN. Taxpayers may contact the IRS Taxpayer Assistance Center to obtain help in renewing their ITIN.
6. IRA Rollover Self-Certification - The normal IRA rollover limit is 60 days. Self-certification may enable you to have an extended period of time for an IRA rollover. In order to self-certify, you must fall into one of 11 specific categories. These include “a distribution check that was misplaced and never cashed, the taxpayer’s home was severely damaged, a family member died, the taxpayer or a family member was seriously ill, the taxpayer was incarcerated or restrictions were imposed by a foreign country.