2017 Income Tax Deadline

2017 Income Tax Deadline

2017 Income Tax DeadlineIt is that time of the year again when your mailbox starts getting filled with tax forms (officially known as Information Returns) from employers, brokerage accounts, banks and other places where you have financial activity.   If you are like most Americans, you probably have a pile of papers that you’ve put together that will be sent off to your tax preparer soon so they can prepare your returns.   As we get ready for this annual ritual, it would be a good time to remind ourselves of a few important tasks related to tax season.

Make Sure They Are Accurate

If you receive an information return such as a 1099-div, make sure to review the amount being reported to be accurate. If there is an error, it is your responsibility to contact the issuer to have them correct it. If you are unable to get it corrected, you will need to address it on your tax returns.   Remember, a copy of that return has already been sent to the IRS, so if they see a discrepancy, they will need an explanation.

Not All Information Returns Are For Taxable Income

In certain instances, you may receive an information return for a transaction that may not be taxable. For example, if you had a rollover, you may receive such a notice. Don’t ignore these returns. You still have to account for them, and also make sure they are accurate.

If You Don’t Get A 1099

You have a duty to report all your income whether your received an information return or not. As an example, if you were hired as an independent contractor where you earned income, and for whatever reason you did not receive a 1099 in the mail, it is your obligation to report that income on your tax returns. No EXCEPTIONS!

Check Your Social Security Statement Online

Identity theft is one of the fastest rising crimes today.   Thieves will often steal social security numbers to not only steal money, but in some cases to gain employment for undocumented persons.   One of the ways you can monitor this to make sure you are not a victim is by checking your social security statements. If you are getting close to retirement, the last thing you want to deal with is having your social security benefits held up.

Last Minute Tax Deductions

If you have not done proactive tax planning, then you may still have some opportunities for some last minute tax deductions for your 2016 returns. If you are still employed, the deadline to make contributions to IRAs is on Tuesday, April 18, 2017. This means that you can make eligible contributions that apply towards your 2016 tax liabilities.

Proactive Tax Planning

Unlike contributions to qualified plans, withdrawals made from qualified plans are generally accounted for in the calendar year. Nonetheless, tax season is a great time to get clarity on your income tax bracket for making tax-planning decisions. For example, if you find yourself in a favorable tax bracket, you may want to consider the impact of making withdrawals knowing the certainty of today’s tax rates vs the uncertainty of future tax legislation. Remember, when you reach age 70.5, you have to start taking Required Minimum Distributions from your qualified plans. If you wait until that time, your options will be severely limited from a planning perspective. This is a complex topic, and one where you should seek the guidance of a qualified professional.