Swaim Accounting

Tax season is over! (unless you filed an extension :-))

Monday morning FACT: filing deadline is tomorrow! In 2018, Tax Day falls on a Sunday. That means that it should get pushed ahead to Monday but Emancipation Day falls on Monday, April 16. Since that’s a legal holiday in the District of Columbia, the tax filing deadline will be pushed ahead for all individual taxpayers to Tuesday, April 17, 2018!

Monday morning FACT: only one week left to file! Can't get your return done in time? You can file an extension which grants an automatic 6 months extra to file. [An extension of time to file your return does not grant you any extension of time to pay your taxes. April 17 is the deadline for most to pay taxes owed and avoid penalty and interest charges.]

Monday morning FACT: you may be able to deduct child or dependent care expenses (i.e. daycare). You could receive a tax credit up to 35% of qualifying expenses of $3,000 for one, or $6,000 for two or more children or dependents. Several rules and qualifications apply. Ask for your individual assessment today! https://www.irs.gov/publications/p503

Monday morning FACT: if you receive a refund in 2018, you can apply any, or all of it, toward estimated taxes due! This applies at both the federal and state level.

Monday morning FACT: the IRS provides a retirement savings contribution credit ("savers credit") for making eligible contributions to your IRA or employer-sponsored retirement plan. Income limitations apply. Ask for your individual assessment today! https://www.irs.gov//retirement-savings-contributions-save

Monday morning FACT: if you have a qualified high deductible health insurance plan, you may be able to contribute to an HSA (health savings account). With an HSA, you can contribute pre-tax dollars to be used toward medical bills. The annual contribution for 2018, self-only is $6,650 and family is $13,300.

Monday morning FACT: did you move in 2017? You may be able to deduct moving expenses whether you are self-employed or an employee. IRS offers $0.17 per mile but you must meet 3 requirements: (1) Your move is closely related to the start of work. (2) You meet the distance test. (3) You meet the time test. Ask for your individual assessment today! https://www.irs.gov/publications/p521

Monday morning FACT: Depending on your income, you could have to pay your federal income tax rate on up to 85% of your Social Security benefits! It all depends on your filing status and combined income. California does not tax social security income from the US, including survivor's benefits and disability benefits. [Personal assessments will be required]

Monday morning FACT: some disability payments are taxed, and others are not. How do you tell? Almost every situation will be different! Below is a good article summarizing. But a personal assessment by your tax professional will be required. https://www.forbes.com//irs-warns-that-pay-on-disability/

Monday morning FACT: You can take distributions from your IRA (including your SEP-IRA or SIMPLE-IRA) at any time. There is no need to show a hardship to take a distribution. However, your distribution will be includible in your taxable income and it may be subject to a 10% additional tax if you're under age 59 1/2. The additional tax is 25% if you take a distribution from your SIMPLE-IRA in the first 2 years you participate in the SIMPLE IRA plan. There is no exception to the 10% additional tax specifically for hardships. See chart of exceptions to the 10% additional tax. https://www.irs.gov//retirement-plans-faqs-regarding-iras-

Monday morning FACT: alimony is typically taxable income for the recipient and a tax deduction for the payor. Several rules apply and must be strictly followed (https://www.irs.gov/taxtopics/tc452). [Please ask for individual assessment]

Monday morning FACT: if you received a state or local income tax refund in 2017, you will be issued a 1099-G at year-end. Take it with to your annual tax appointment! Your tax professional can assess if it will be income or not in the current year.