Be aware, under a rule going to be proposed by the Centers for Medicare & Medicaid Services, small firms would no longer use the HealthCare.gov website to enroll in SHOP (Small Business Health Options Program). Instead, beginning on Jan. 1, 2018, employers would instead enroll directly with an insurer, agent or broker offering the SHOP plans.
This move could make it easier for small firms to qualify for tax credits, since they would no longer have to buy group insurance through SHOP to receive it. Firms with fewer than 25 full-time workers can qualify for a tax credit of up to 50% of employer premium contributions. So far, SHOP covers about 230,000 individuals.
However, the ability to comparison shop likely would disappear. Choices would be limited to a single plan or just a few options offered by a single insurer.
Remember, my Tax Problem Solver Team and I are here to help you deal with any tax situations you may find yourself dealing with. We can offer suggestions for optimizing your tax credits in your small (or large) business situation. Message me here or email me at: email@example.com
Sadly, it’s becoming clear that you can’t bank on the traditional idea that your tax bill will go down in retirement. A lot of things can get in the way of smooth sailing, so it’s best to get a plan in place – and now is the best time.
When asked what the biggest threats to their retirement plans are, people offer a variety of responses. The most commonly identified threats include outliving their wealth, health insurance costs, nursing home expenses and having to help their children or grandchildren financially. All of these can be major threats to your retirement plans, but there’s one biggie that people tend to forget: taxes.
Not having a clear plan to deal with the possibility taxes is one of the most serious threats to the finances of retirement-minded people.
We’ve always been told that when we retire, we will be in a lower tax bracket than whenRead More
Most key dollar ceilings on retirement plans do not change for 2017:
The 401(k) contribution limit remains $18,000, but folks born before 1968 can put in $6,000 more. These payin maximums apply to 403(b) and 457 plans, too. The cap on SIMPLEs stays at $12,500…$15,500 for individuals age 50 and older. However, the payin limit for defined contribution plans goes up to $54,000. And retirement plan contributions can be based on up to $270,000 of salary.
The 2017 payin limits for IRAs and Roth IRAs also stay steady at $5,500, plus $1,000 as an additional catch-up contribution for taxpayers age 50 and up.
Deduction phaseouts for regular IRAs start at higher levels in 2017, from $99,000 to $119,000 of AGI for couples and from $62,000 to $72,000 for singles. If only one spouse is covered by a plan, the phaseout zone for deducting a contribution for the uncovered spouse rises a bit.Read More
The income tax brackets for 2017 are a bit wider than for 2016 because of mild inflation during the 12-month period from Sept. 2015 through Aug. 2016, used to figure the adjustments. Tax rates do not change.
The 2017 standard deductions go up a bit. Married couples get $12,700, plus $1,250 for each spouse age 65 or older. Singles can claim $6,350 – $7,900 if 65 or up. Household heads get $9,350, plus $1,550 once they reach age 65. Blind people receive $1,250 more ($1,550 if unmarried and not a surviving spouse).
High-incomers lose itemized deductions starting at a higher level in 2017. Their write-offs have been slashed by 3% of the excess of AGI over $261,500 for singles, $287,650 for household heads and $313,800 for marrieds. But note: the total reduction can’t exceed 80% of itemizations. Medicals, investment interest, casualty losses and gambling losses (to the extent of winnings) are exempted from this cutback.
From time to time I’ll note changes in place for 2017 taxers. Some reflect prior-year inflation. Some are new rules. One thing is certain: All taxpayers will be affected.
The 2017 standard mileage rate for business driving falls to 53½¢ a mile, a 0.5¢ drop. The rate decreases to 17¢ a mile for travel for medical purposes and job-related moves. But the rate for charitable driving remains at 14¢ per mile.
$510,000 of assets can be expensed in 2017, and this figure phases out dollar for dollar once over $2,030,000 of assets are put into service during the year.
Two business tax breaks first apply on 2016 returns filed in 2017:
Small start-ups can opt to claim $250,000 of R&D costs to offset payroll taxes instead of their regular income tax liability. The election is available to companies in business for five years or less that have gross receipts under $5 million.