News & Publications
2017 Tax Rate Adjustment
The Internal Revenue Service has announced the annual inflation adjustments for a number of provisions for the year 2017, including tax rate schedules, tax tables and cost-of-living adjustments for certain tax items. These are the applicable numbers for the tax year 2017—in other words, effective January 1, 2017. They are NOT the numbers and tax rates that you’ll use to prepare your 2016 tax returns in 2017. Rather, these numbers and tax rates are those you’ll use to prepare your 2017 tax returns in 2018. If you aren’t expecting any significant changes, you can use the updated tax tables to estimate your liability for the 2017 tax year. If, however, you are expecting to make more money, get married, buy a house, have a baby or other life change, you’ll want to consider adjusting your withholding or tweaking your estimated tax payments.
The big news is, of course, the tax brackets and tax rates for 2017
Other Year-End Moves
Retirement Plan Contributions. Maximize your retirement plan contributions. If you own an incorporated or unincorporated business, consider setting up a retirement plan if you don't already have one. It doesn't actually need to be funded until you pay your taxes, but allowable contributions will be deductible on this year's return.
If you are an employee and your employer has a 401(k), contribute the maximum amount ($17,500 for 2014), plus an additional catch-up contribution of $5,500 if age 50 or over, assuming the plan allows this much and income restrictions don't apply.
If you are employed or self-employed with no retirement plan, you can make a deductible contribution of up to $5,500 a year to a traditional IRA (deduction is sometimes allowed even if you have a plan). Further, there is also an additional catch-up contribution of $1,000 if age 50 or over.
Health Savings Accounts. Consider setting up a health savings account (HSA). You can deduct contributions to the account, investment earnings are tax-deferred until withdrawn, and amounts you withdraw are tax-free when used to pay medical bills.
In effect, medical expenses paid from the account are deductible from the first dollar (unlike the usual rule limiting such deductions to the excess over 10 percent of AGI). For amounts withdrawn at age 65 or later, and not used for medical bills, the HSA functions much like an IRA.
To be eligible, you must have a high-deductible health plan (HDHP), and only such insurance, subject to numerous exceptions, and must not be enrolled in Medicare. For 2014, to qualify for the HSA, your minimum deductible in your HDHP must be at least $1,250 for single coverage or $2,500 for a family.
February 2017 is Service Industry Month at River East Accounting.
For the month of February 2017, all service industry worker will receive a flat rate charge of $135.00 for tax services. This includes,Servers and bartenders, front of the house, bar backs, cooks.
River East Accounting specializes in the service industry needs as it relates to tips. Contact us and you may see your tax liability go down. The State of Illinois tax liability can be especially challenging. We have been serving the industry for 22 years and know the ins and out of the tax tips laws.
*RESTRICTIONS DO APPLY