6 Things You Need to Know About This Tax Season

There’s been a lot of talk about all the changes coming next tax season – but first you’ll have to get through this year’s tax return.

To help you get started, here are six things you need to know about your 2017 tax return.

  1. April 17, 2018 is the due date for your 2017 return or extension. REMEMBER: Extensions let you file later, but you still have to pay any taxes you owe by April 17 to avoid interest and penalties.
  2. The IRS ramped up online security this year, so be ready to verify your identity if you need to access tax transcripts or create a tax account. You’ll need to provide specific information, including:
    • your email address
    • your filing status and address from last year’s tax return
    • your Social Security number
    • the account number from a credit card, home equity loan, mortgage, or car loan
    • a mobile phone you can get text messages on

    If you have a credit freeze through Experian, you’ll need to do a temporary “unfreeze” to gain IRS secure access. To find out more, go to the IRS Secure Access information page.

  3. Form 1040 looks a little different this year. Line 34 now says “Reserved for future use.” That’s because the deduction for tuition and fees disappeared, and Congress didn’t reinstate it…until they passed the budget on February 9. They haven’t changed the form yet, but probably will very soon.
  4. Schedule A looks different, too. The first change is thanks to a retroactive provision in the new tax law that lowers the floor for deductible medical expenses down to 7.5% (from 10%) of adjusted gross income (AGI). That means more people will be able to deduct more medical expenses on their 2017 tax returns. You’ll also see a “Reserved for future use” line on this schedule because the deduction for mortgage insurance premiums also disappeared…and was resurrected in the new budget, even though the form hasn’t been changed yet to reflect that.
  5. You still have to report health care coverage on your 2017 tax return. The mandate repeal starts when you file your 2019 taxes in 2020. So for now, if you and all of your dependents had health coverage all year, remember to check the box on:
    • Form 1040, line 61
    • Form 1040A, line 38
    • Form 1040EZ, line 11
  6. There’s still time to set up and fund an IRA for tax year 2017 – and that includes Roth IRAs and SEP-IRAs (for self-employed people).  You can stash up to $5,500 in a traditional or Roth IRA – $6,500 if you’re 50 or older – by April 17 even if you participate in a retirement plan through your job (as long as you don’t exceed income limits). If you have ANY self-employed income at all, which includes freelance work and contract side gigs, you can open a SEP-IRA and stash up to 25% of your net income…up to $54,000 for 2017.The most important thing to remember, though, is to file as soon as you possibly can – especially if you’re due a refund. Not only will your money get back to you faster, you’ll also be able to beat tax identity thieves to the punch.
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