Once
again it is time to gather your income and deduction records in
preparation for filing your 2017 income tax returns.
In
light of the doubling of the federal standard deductions for 2018, it
would in most cases be wise to maximize your 2017 deductions if you
itemize:*
1. If you pay estimated tax, you probably already pay
your 4th installment in December, but you may want to
consider increasing your state estimate.
2. Pay the March installment of property taxes on your
residence in December.
3. Consider increasing your December gifts to charity if
you will not be getting any tax benefit from making gifts to charity
under the proposed tax law changes.
(Note that next year contemporaneous proof will be required for all
charitable deductions, not just donations over $250.)
If you need more specific year-end tax planning advice,
you should contact our office to make an appointment. If
you choose to have our office prepare and file your federal and state
tax returns, you will need to sign and return the engagement
agreement on the reverse side of this letter.
All professionally prepared tax returns must be filed electronically
(“e-file”). Refunds will take longer to process due to ongoing
efforts to reduce fraudulent refunds obtained by identity theft.
Your best protection against such stolen refunds is to file as soon
as you receive your tax documents (W-2s, 1099s, K-1s, etc.).
If you made significant
purchases (whether personal or for business) with cryptocurrencies
(such as Bitcoin or Ethereum), be aware that you may have a taxable
capital gain to report due to the dramatic rise in their value. Do
not assume that your transactions cannot be audited by the IRS.
On the related topic of cybersecurity: Please do not send any documents by e-mail that contain social
security numbers or bank account numbers, unless they are password
protected.
IRS
requires mileage logs for vehicles with business use; standard
mileage rates for 2017 are:
Federal Iowa
Business: 53.5¢/mi. 53.5¢/mi.
Medical & moving: 17¢/mi. 17¢/mi.
Charitable: 14¢/mi. 39¢/mi.
You
are required to send a Form 1099 to any individual, partnership or
LLC that you paid $600.00 or more for services, rent or interest paid
in the course of your trade or business. Payments to cooperatives,
banks and other corporate entities are excluded. Wages in excess of
$150 in any quarter require the filing of Forms W-2 and W-3 (for
household employees you may file Schedule H with your tax return
instead). If you would like us to prepare these forms, you will need
to provide us with the information before January 24, 2018.
If
you have questions on any of the above or other tax matters feel free
to call, e-mail, or stop in. When you have your records ready you
may let us know and we will set up an appointment that is convenient
for you. Evening or Saturday appointments can be arranged.
Best
Wishes for the New Year!
*Pursuant to U.S.
Treasury Regulations, you are advised that any federal tax advice
included in this communication is not intended or written to be used,
and cannot be used, to avoid any U.S. federal tax penalties or to
promote, market, or recommend to another party any transaction or
matter.
