Tax Law in 2017
With the new year and the new president, it is well to stay on top of the tax situation in 2017. Some things will change, and some things will stay the same. Following is a list of good, sound tax advice for the coming year.
If your employer proffers a 401(k) or deferred pension plan, always contribute the maximum amount allowable into it. This policy becomes especially important when your employer matches your contribution. Leaving anything out of the plan keeps money loose -- when it should be saved toward retirement. Even without a match, those funds are tax-deferred and can grow. If your employer does not offer a retirement plan, an individual retirement account or a Roth IRA are probably good options. Both permit tax-deferred gains, and the former may lead to a tax deduction for the year you contribute to it. Receiving an Identity Protection PIN (an IP PIN) means you must give that number on your tax returns -- this year and every year afterward. This PIN, assigned to eligible taxpayers, is a sixdigit number that changes every year designed to prevent fraudulent returns from being filed under your Social Security Number. It also helps the IRS accept your tax return. If you do not receive notification of this PIN in the mail, you will need to retrieve it from the IRS Website.
Do not forget the earned income tax credit. If you worked and yet earned less than $53,505 in 2016 (the limit will be $53,930 in 2017), the EITC Assistant tool will tell you if you qualify for this valuable credit. If you do, file a return. You can also save money by donating your extra stuff to charities. The government, if the stuff is in good condition or better, will grant you a tax deduction based on the market value of the items. If the price of your contribution surmounts $500, you must file Form 8283, Noncash Charitable Contributions, and give some details. When you file your return, the best way to receive your refund is to file it electronically and use direct deposit. Use IRS direct pay from your checking or savings account to settle any debts, and make sure to save a copy of your filed tax return. It can be so complicated otherwise. With new times come new rules, and it is well to be prepared. This list of tax tips should help you know how to manage your finances in the new year under President Trump. William Doonan is a tax law and legal expert in NYC.