Hurricane Tax Relief
The Disaster Tax Relief and Airport and Airway Extension Act of 2017 that was signed into law on September 29 included the following tax provisions that provide relief for taxpayers affected by Hurricanes Harvey, Irma and Maria for 2017 federal tax returns.
Special Rule for Determining 2017 Earned Income for the Earned Income Tax Credit and Child Tax Credit
Qualified individuals may use their earned income from 2016 to determine their earned income tax credit and their child tax credit for their 2017 federal income tax return.
Qualified individuals are those whose principal place of abode was located in the Hurricane Harvey, Irma or Maria disaster zone on the date of each applicable hurricane and the individual was displaced from their home because of the hurricane.
Penalty-Free Access to Retirement Funds
Charitable Contributions for Hurricane Relief
Suspends the limitation on charitable contributions associated with hurricane relief that are made between August 23, 2017 and December 31, 2017.
Provides qualifying businesses a tax credit for 40 percent of wages (up to $6,000 per employee) paid by a disaster affected employer to an employee from a core disaster area.
PATH Act Reminders for 2018 Filing Season
Federal Refunds will not be Issued Until February 15 for Taxpayers who claim EITC or Additional Child Tax Credit
This is a reminder that as with last year any refund related to a federal return that claims the Earned Income Tax Credit or the Additional Child Tax Credit will not be issued to the taxpayer until February 15.
Expansion of Preparer Due Diligence Requirements
This is a reminder that the PATH Act expanded the EITC due diligence requirements under Code Section 6695 (including the $500 penalty) to include the child tax credit and the American Opportunity Education credit last year.
Therefore the Form 8867 (Paid Preparer’s Due Diligence Checklist) now includes questions for the child tax credit and the American Opportunity Education Credit as well as for the Earned Income Tax Credit.
Also for this year the IRS has made changes to the Form 8867 that should make it easier for preparers to understand and answer the due diligence questions.
See the draft of the 2017 Form 8867 to see what changes the IRS has made to the Paid Preparer’s Due Diligence Checklist.
Tax Year 2017 Annual Changes and Reminders (for returns filed during the 2018 filing season)
Schedule A – Medical Expense Threshold Percentage (Reminder)
Deductible when medical expenses exceed 10% of AGI for everyone
Exemption Amount: $4,000 per exemption
Additional Amount for Aged and Blind:
Standard Mileage Rates
Things to be Aware of for the Upcoming 2018 Filing Season
Jan 3, 2018
Reminder – Affordable Care Act for Tax Year 2017 Returns
Dec 28, 2017
Reminder of the Federal Refund Delay for Upcoming 2018 Filing Season
Dec 13, 2017
Preparer Due Diligence Requirement Expansion Reminder
Nov 30, 2017
PTIN Renewal and Last Day to File a Return Electronically
Nov 13, 2017