Many people are finally getting ahold of the tax changes that went into effect on January 1, 2016. While we still have a few months before most people have to file their personal income taxes, the new year is less than a month away. Before you can make tax and financial plans for the next year, it is important to know the coming changes in tax laws and regulations.
One of the major changes affecting businesses involves a change in filing deadlines. The deadline for Partnership Form 1065 filings is moving from April 15th to March 15th. Thus, many businesses will have one less month to file their federal tax forms in 2017. However, corporations filing Form 1120 will still have an additional month, with the deadline being April 17th.
Foreign account reporting on FinCEN Report 114 will move from June 30th to April 15th (April 17th for 2017), or until October 15th with an extension. Additionally, there are other international tax regulations that may change in the year ahead. The passive foreign investment company rules will expire on December 30, 2016, and inversion regulations for surrogates are set to expire on January 13, 2017.
Looking ahead to 2017, it may be important for you to inform your tax professionals or tax attorneys about how your life may change in the coming year. If you plan to get married, expect a child, are starting a small business, or will be relocating for work, these life changes will likely have an impact on your tax liability. Understanding how these changes will affect your taxes will help you plan ahead to save money and avoid penalties.
In addition to the above changes, the new year is a good time to make sure you are taking full advantage of the tax-saving opportunities that are already in place. Taking any work or life changes into account, you may also want to adjust your withholdings. If you had a large refund, changes to your withholdings can put more money in your pocket throughout the year. If you had a large tax bill, you may want to increase your withholdings or make estimated tax payments.
It is also a good time to review your retirement plans to make sure you are taking advantage of employer matching programs. While most tax laws require action during the tax year, you still have until April 17, 2017, to make IRA contributions. For a traditional IRA, contributions may enable you to lower your 2016 tax year liability while setting aside money for your retirement. For 2016, the maximum IRA contribution is $5,500, or $6,500 for individuals aged 50 or older.
Talk to your tax attorney or tax professional to make sure you are kept up to date on changes for the coming tax year.
Butterfield Schechter LLP is San Diego County's largest firm focusing its law practice on employee benefit legal services, tax law, and business counseling. Our firm can help you and your business identify tax-savings opportunities, avoid tax penalties, and plan for the 2017 tax year. Contact our office today with any questions on how we can help you and your business succeed.