Tax Tips

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Take advantage of energy credits. Taxpayers can receive an energy tax credit of energy improvements to their primary residence equal to 10% of the cost up to $500.  The maximum of $500 is per property, not per year.  The items that qualify are Central A/C, Water Heater, Furnace, Insulation, Windows, Doors, and certain Roofs.  There are specific energy ratings and credit amounts for each item.


Gifting – You can gift up to $14,000 per person and not have to file a gift tax return. This amount is unchanged from the previous year.


New Filing Deadlines for 2017

Since April 15, 2017 is a Saturday and Monday is a Washington, D.C. holiday, taxpayers will have until Tuesday April 18, 2017, to file their 2017 individual returns and make their first 2017 estimated tax payment. 


Individual Tax Provisions Made Permanent 


State and local sales tax deduction: The state and local sales tax deduction can be taken in lieu of the state income tax deduction. This benefits taxpayers in states with no income tax and sometimes those who purchase "big ticket" items such as automobiles.


For taxpayers with children: The lower threshold for the refundable Child Tax Credit has been made permanent at $3,000.


Higher tuition tax credit: The enhanced American Opportunity Tax Credit of $2,500 is in place for qualified education expenses.


Deduction for teachers: The Teachers Classroom Expense Deduction of $250 allows teachers to deduct supplies they bought for their classrooms. It will be indexed for inflation beginning in 2016. It also includes a teacher's "professional development expenses."


IRA charitable allocation: The Qualified Charitable Distribution allows those over the age of 70 and a half to make a charitable donation directly via trustee-to-trustee from an IRA account. Up to $100,000 of the distribution is tax free.



Individual Provisions Extended Through 2016


For homeowners facing foreclosure and short sale: The Qualified Principal Residence Indebtedness Exclusion provides relief for distressed homeowners facing foreclosure and short sale.


Deduction for mortgage insurance premiums: The Mortgage Insurance Premiums Deduction is a deduction for private mortgage insurance for homebuyers who put little to no money down when buying their home. Income restrictions apply.


Deduction for tuition and fees: The Tuition and Fees Deduction is a deduction for taxpayers (yourself, your spouse or dependents) with qualified education expenses. Income restrictions apply.


Energy efficient credit: Credit for energy efficient nonbusiness items such as windows and doors. Limits apply.


Businesses: The Section 179 limit remains at $500,000, and the 50 percent bonus depreciation applies to property placed in service through 2017.

Please note: This is only a short list of some of the new tax rules. Please spend time with your tax preparer and learn the rules at IRS.gov so you and your advisor are knowledgeable about qualifying expenses, eligible purchases, contributions, gifts, etc., that may help to reduce your tax burden.


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