2017 TAX YEAR UPDATES
First off the Due date of returns this year is April 17, 2018 because the 15th falls on Sunday and Emancipation day is Monday the 16th.
There will be no Federal refunds issued before mid-February for Taxpayers that claim the Earned Income Tax Credit or the Additional Child Tax Credit. The IRS is expecting the earliest these refunds will be available to February 27, 2018, if you choose Direct Deposit and there are no other issues with the tax return.
Some of the changes that took effect for the 2017 Tax returns:
Tuition and Fees deduction is no longer available – However there are still the American Opportunity Credit and the Lifetime Learning Credit. Beginning in 2016 in order to claim Education Credits you MUST have a FORM 1098-T. No Form no credit. Also don’t be surprised if your Tax Professional asks you for proof of the amount paid of Tuition paid in 2017. So you might want to gather that information to have ready for them.
The Exclusion for Personal Residence Cancellation of Mortgage Debt – is GONE as of 12/31/2016
Mortgage Insurance Premium Deduction – is GONE as of 12/31/2016
Personal Energy Property Credit – is GONE as of 12/31/2016 for everything except for qualified Solar Electric property and qualified Solar Water Heating property.
A few other changes for 2017:
Medical expenses in excess of 7.5% of Adjusted Gross Income are deductible as itemized deductions. This was supposed to be 10%; however the Tax Cuts and Jobs Act of 2017 changed it back to 7.5% for 2017 – 2018.
Mileage Rate: Business $0.535 per mile
Medical & Moving $0.17 per mile
Charitable Services $0.14 per mile
Kicker Refund: Oregon’s surplus credit will be claimed as a credit on your 2017 tax return. The credit is based on 5.6% of your 2016 Oregon Tax Liability.
Earned Income Credit: For most qualified taxpayers the Oregon EIC is 8% of your Federal EITC. Beginning in 2017, the Oregon EIC is 11% of the Federal credit IF you have a qualifying dependent under age 3 at the end of the tax year.
Federal Tax Liability Subtraction: The Federal Tax Lability Subtraction is $6,550 for 2017, and may be limited further based on your AGI.
Tuition and Fees Deduction and Subtraction: Is not allowed for tax years beginning January 2017.
Special Oregon Medical subtraction: You or your spouse must be 64 years or older on December 31, 2017 and have qualifying Medical and/or Dental expenses you may qualify for this subtraction.
Be sure and keep this in mind even if you don’t itemize on Federal you may be able to use this subtraction on your Oregon return. It is always a good idea to keep records of medical expenses for that reason.
Lottery Withholding: Beginning in 2018 if you win $1,500 or more on the Lottery there will be 8% withholding from the State.
Transportation Package: Beginning July 1, 2018 there will be a TRANSIT TAX withheld from taxable wages and retirement distributions. The revenue from this tax will go to the Statewide Transportation Improvement Fund to finance investments and improvements in public transportation services, except for those involving light rail.
Residential Energy Tax Credit: 2017 is the last year for the Residential Energy Tax Credit. Devices must have been purchased by 12/31/2017 and must be operational by 04/01/2018.
AS ALWAYS IF YOU HAVE ANY CONCERNS OR QUESTIONS DO NOT HESITATE TO CONTACT YOUR TAX PROFESSIONAL