TREVOR KLEIN CPA, INC
ACCOUNTING TAX AND ADVISORY SERVICES
​
​
NEW TAX PROPOSALS
The White House unveiled the administration's proposed tax cut plan, which, if approved, would be the biggest tax cut and largest tax reform in the history of the United States. The following is a breakdown of the proposal.
For individuals, the plan is to:
-
Reduce the number of personal income tax brackets from seven to three, with new rates of 10 percent, 25 percent and 35 percent
-
Double the standard deduction (from $12,700 to $25,400 for joint filers)
-
Eliminate all deductions except for mortgage interest and charitable giving
-
Terminate the net investment income tax (3.8%), that applies to individuals earning more than $200,000 per year
-
Repeal the alternative minimum tax
-
Eliminate the estate tax, which currently only applies to estates worth more than $5.49 million for individuals and $10.98 million for couples.
The administration also plans to offer tax relief to families with child care expenses, though details have not yet been released.
For businesses, the plan is to:
-
Lower the top federal income-tax tax rate from 35% to 15%
-
Change the way pass-through entities are taxed - instead of being taxed at individual rates, owners of S corporations and partnerships, as well as self-employed taxpayers, would be taxed at a 15% rate
-
Allow for a one time repatriation tax to encourage the return of overseas profits earned by U.S. multinational corporations
-
Move to a territorial tax system for corporate offshore income
TIPS FOR THOSE WHO MISSED THE TAX DEADLINE
​
Monday, April 18, was the tax deadline for most people in 2016. If you didn’t file a tax return or an extension to file but should have, take action now. If you missed the tax filing deadline:
-
File and pay soon. If you owe taxes, you should file and pay as soon as you can, which will stop the interest and penalties that you will owe. IRS Direct Pay is a free, secure and easy way to pay your balance due directly from your checking or savings account. We don’t charge a penalty for filing a late return if you are due a refund. The sooner you file, the sooner you’ll get your refund.
-
Use IRS Free File. Nearly everyone can use IRS Free File to e-file their federal taxes for free. If your income was $62,000 or less, you can use free brand-name tax software. If you made more than $62,000, use Free File Fillable Forms to e-file. This program uses electronic versions of IRS paper forms and does some of the math for you. Fillable forms work best for those who are used to doing their own taxes. Either way, you have a free option on IRS.gov through the Oct. 17 extension period.
-
IRS e-file is safe and quick. No matter who prepares your tax return, you can use IRS e-file through Oct. 17. E-file is the easiest, safest and most accurate way to file your taxes. The IRS will send you electronic confirmation when we receive your tax return, and we issue more than nine out of 10 refunds in less than 21 days.
-
Pay as much as you can. If you owe but can’t pay in full, you should pay as much as you can when you file your tax return. IRS electronic payment options are the quickest and easiest way to pay your taxes. You should pay what you owe as soon as possible to minimize penalties and interest.
-
Make monthly payments through an installment agreement. If you need more time to pay your taxes, you can apply for a direct debit installment agreement through the IRS Online Payment Agreement tool. You don’t need to write and mail a check each month with a direct debit plan. If you don’t use the online tool, you can still apply on Form 9465, Installment Agreement Request. You can get the form at IRS.gov/forms at any time.
-
A refund may be waiting. If you are owed a refund, you should file as soon as possible to get it. Even if you are not required to file, you may still get a refund if you had taxes withheld from your wages or you qualify for certain tax credits like the Earned Income Tax Credit. If you don’t file your return within three years, you could lose your right to the refund.
​
THE AFFORDABLE CARE ACT
The Affordable Care Act contains comprehensive health insurance reforms and includes tax provisions that affect individuals, families, businesses, insurers, tax-exempt organizations and government entities. These tax provisions contain important changes, including how individuals and families file their taxes. The law also contains benefits and responsibilities for other organizations and employers.
If you purchased insurance through the Health Insurance Marketplace, you should report changes to the Marketplace when they happen. Changes to your household income or family size may affect your eligibility for the advance payments of the premium tax credit.
​
Individuals & Families
​
The law requires you and your dependents to have health care coverage, an exemption, or make a payment with your return. If you purchased coverage from the Health Insurance Marketplace, you may be eligible for the premium tax credit.
​
Employers
​
The Affordable Care Act includes requirements for employers regarding heath care coverage. The size and structure of your workforce determines your responsibility. However, if you have no employees, the information doesn’t apply to you.