Pub. 15 2016-2017 Issue 3

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 23 new jersey auto retailer W W W . N J C A R . O R G There are a number of important tax breaks that will expire at the end of 2016 unless Congress acts to extend them. versus future years tooptimize the tax impact. This approach is still a sound basis for tax planning. However, whatever you expect for your particular tax situations in the current and future years, it seems clear that the tax bite will be significantly less after 2016. With that in mind, consider some the following steps to defer income to 2017 and accelerate deductions to 2016: 1. Receive 2016 year-end salary or bonuses in 2017; 2. Donate your 2016 required minimum IRAdistribution toa charity. Individuals age 70½or oldermay take a tax-free IRA distribution up to $100,000 if donated to a charity; 3. Pre-pay deductions in 2016 such as state and local income taxes, real estate taxes, mortgage interest, purchases of busi- ness equipment (using available expensing allowances). Note that pre-paying state and local income taxes and property taxes may trigger or increase alternative minimum tax (AMT). Therefore, you should project the AMT impact before pre-paying these expenses. Expiring Tax Breaks There are a number of important tax breaks that will expire at the end of 2016 unless Congress acts to extend them. Some of these expiring tax breaks will likely be extended, but their fate is presently unknown so you should be aware that 2016 could be the last year to utilize these benefits. For individuals, the expiring breaks include: the exclusion that exempts some homeowners frombeing taxed on the amount they receive in mortgage loan forgiveness on their principal residence; the treatment of mortgage insurance premiums as deductible qualified residence interest; the 7.5% of adjusted gross income floor for medi- cal expense deductions (taxpayers age 65 or older); and the deduction for qualified tuition and related expenses. There is also a multitude of expiring energy provisions, including: the nonbusiness energy property credit; the residential energy prop- erty credit; the qualified fuel cellmotor vehicle credit; the alternative fuel vehicle refueling property credit; the credit for two-wheeled plug-in electric vehicles; the energy efficient homes credit; and the hybrid solar lighting system property credit. Changes in tax filing deadlines The IRS hasmade a number of changes in fil- ing deadline that are generally effective for tax years starting after December 31, 2015 (2016 tax returns prepared during the 2017 tax season). Partnerships and S Corporations: The new due date is March 15th for calendar year partnerships and S Corporations. Note that this is a month earlier than the previous date ofApril 15. Six-month extensions are allowed (September 15th for calendar year partnerships and S corporations). CCorporations: Thenewduedate is the 15th day of the fourthmonth following the close of the corporation’s tax year (that would be April 15 for a calendar-year corporation). Note that this is one month later than the previous due date of March 15 for calendar-year corporations. There is a six-monthextensionallowed, except calendar-year corporations will have only a five-month extension to September 15. Trusts and Estates: The due date remains at April 15th for calendar-year trusts and estates. However, the extension allowed is 5 ½months (September 30th for calendar-year trusts and estates) instead of the previous extension of 5 months. Fin CEN Report: The return used to report foreign bank and financial accounts has a new due date of April 15th with a 6-month extension allowed to October 15th. Previ- ously, the due date was June 30th with no extensions allowed. Forms W-2 and 1099-MISC: New due date of January 31 for IRS filings: W-2s: Previously, employers had two dates to keep in mind when remitting W-2s: January 31 to provide employee copies, and February 28, for paper filings submitted to IRS/Social SecurityAdministration (March31 for electronic filings). Beginningwith2016 forms, employers now have one filing deadline for all Federal W-2s, January 31. This is true for both em- ployee and agency copies, or whether filing paper or electronic returns. 1099-MISC: The new January 31 deadline applies to certain types of 1099s. If you’re fil- ing Form1099-MISCand reporting amounts in Box 7 (Non-employee Compensation) then you need to meet the new filing deadline of January 31. If you don’t have amounts inBox 7, then the deadline for filing with the IRS remains at February 28 for paper filings or March 31 for electronic filings. Rochelle Kimmins, CPA, CFP is Tax Director at WithumSmith+Brown, PC in Edison, New Jersey (formerly The Mironov Group). She can be reached at 732.379.5200 or rkimmins@withum.com.