ROBERT RUBENSTEIN C.P.A.

THE BOTTOM LINE ACCOUNTANT

HomeProfileTax TipsServicesClient Testimonials
 
TAX TIPS

4.The 2016 year-end newsletter full of tax advice is available upon request. Please call the office at (201)797-4761 for your complimentary copy!


1.  In regard to retirement plans, the maximum contribution limits for 2017 are outlined below:   

                         Traditional & Roth IRA's for Taxpayers under 50 $  5,500 
                   Traditional & Roth IRA's for Taxpayers over 50 $  6,500
                   401K's for Taxpayers under 50

 $18,000

                   401K's for Taxpayers over 50 $24,000
                   SEP & Defined Contribution Plans for Taxpayers under  50 $54,000
                   SEP & Defined Contribution Plans for Taxpayers over 50 $54,000

2.  For 2017 the IRS allows a deduction for your automobile at various rates depending on the usage.  The details are outlined below:

                     Car used for business 53.5 cents per mile
                     Car used for charitable purposes 14 cents per mile 
                     Car used for medical or moving purposes 17 cents per mile

               

 

3. Child care tax credits for summer day camp and babysitters are still available for children under 13 years of age if both parents work.

4.  In regard to the "kiddie" tax the law increases the age from 14 to 18 regarding investment income.  If the child is under 25 and still in college and they have investment income of over $2,100 they will be taxed at their parents' rate instead of the individual rate. 

5.  The minimum corporate tax in New Jersey is now based on gross receipts and ranges from $500 to $2,000 for 2017.

6.  The New Jersey Homestead rebates for a homeowner now range from $1,000 to $2,000 for 2017.  

7.  The threshold for the deduction of unreimbursed medical expenses has been increased from 7.5% of your adjusted gross income to 10% for those taxpayers under 65.  If you are over 65, the threshold remains at 7.5%.

8.  The tax rate on dividend income is 15% for 2017. 

9.  The maximum tax rate on capital gains is 15% for 2017 if your taxable income is under $450,000 on a joint return.  If over $450,000, the capital gain rate rises to 20%. 

10.  A Medicare  surtax of 0.9% will be assessed on W-2 employee compensation or self-employment income if you earn over $250,000 on a joint return. 

11.  There is a 3.8% Medicare surtax on net investment income if your modified adjusted gross income is over $250,000 on a joint return.  Net investment income includes, interest, dividends, capital gains, annuities, royalties and passive rental income.  It does not include tax-free interest or distributions from retirement plans and IRA's.

12. For flexible spending accounts (FSA) over the counter medications are no longer eligible.  In 2017, the maximum annual FSA contribution for each employee will be capped at $2,600.

13. Under the American Opportunity Tax Credit there is a $2,500 maximum credit for qualified higher education expenses such as college. However the credit phases out for married couples earning over $160,000.

14. In 2017, there are no estate taxes at the federal level unless your estate is over $5,490,000.  In New York the estate must be over $5,250,000 in order to be taxed.   The annual gift tax exclusion is $14,000 per donee in 2017.

      In 2017, the exemption from New Jersey Estate tax will increase from $675,000 to $2 million.  In 2018, the estate tax will be totally eliminated in New Jersey.  However, the New Jersey Inheritance tax will remain in effect with no change during the same time period.  This is a tax assessed on transfers to beneficiaries other than spouses, parents, or children.  Therefore, it would be imposed on nieces, nephews, siblings and friends.  The New Jersey Inheritance tax rates range from 11% to 16% based on taxable income. 

15.  If your adjusted gross income is over $311,300 on a joint return, your itemized deductions are reduced by 3%.

16.  The Social Security wage base has increased to $127,200 for 2017.  If you start collecting Social Security at age 62, you will be subject to a 25% discount.  If you are between the age of 62-66, you can earn up to $15,120 before losing any benefits.  There is no income restriction of social security benefits after age 66.

17.  In 2017, contributions to HSA Plans are deductible up to $6,750 for family coverage.  If over 55, you can deduct an additional $1,000.

18.  There will be an increase in the New Jersey Gross Income Tax exclusion for pension and retirement income over the next 4 years up to $100,000 on a joint return. 

19.   The New Jersey sales tax is reduced from 7% to 6.875% starting January 1, 2017 and to 6.625% on January 1, 2018.