MDTAXES is a nationwide network of CPAs who specialize in the tax issues affecting healthcare professionals.

Find a CPA
Newsletters
Post a Question
PodCasts and Videos
Deduct your professional expenses
Track your professional expenses
Non-Cash Contribution Excel Worksheet * or PDF version
Listen About MDTAXES
Sign up to receive our monthly e-newsletter.
Email:
CPAs: Join the Network
Not a healthcare professional?


NOTICE TO RESIDENTS OF MARYLAND

We are NOT affiliated with the State of Maryland. If you are looking for information about Maryland income taxes, please go to www.marylandtaxes.com.


Useful Links:

FindAGoodCPA.com - Not a healthcare professional?  Find a CPA or EA who understands the tax issues specific to you.

Nanny Taxes - Find out what's involved with complying with the Nanny Tax Rules

IRS Web Site - for tax forms, publications, and general tax information.

Exchange Authority - New England's first authority for IRC 1031 Exchanges

Cost Segregation Studies - Accelerate tax depreciation deductions on new and existing buildings through cost segregation studies

Social Security - find out the latest rules or your projected retirement benefit.

The Company Corporation offers fast, reliable & affordable incorporation and LLC services.


MONTHLY TAX NEWSLETTER

March 2017

THE $3 REACTION TO LAST FALL'S ELECTION

by Andrew D. Schwartz, CPA

Following a historically crazy election season, more clients are checking the "Yes" box in our Tax Organizer to the question about contributing to the Presidential Election Campaign Fund than have done so during all of my prior 29+ years of practice combined.

While most taxpayers probably aren't even aware that this option exists, there is a box to check on the top right of the first page of your personal tax return (Form 1040) to designate $3 of your federal tax liability to be earmarked for the Presidential Election Campaign Fund. For joint filers, there is a second box for your spouse to check as well.

Please note that checking this box does not increase your tax liability by $3.  Instead, the federal government simply allocates $3 from your total tax liability to the Presidential Election Campaign Fund.

While your specific vote will probably never be the one vote to determine the outcome of an election, taking time to actually vote is critical to our democracy.  Same goes for the $3 you allocate to this fund that won't be enough on its own to make or break anyone's campaign. 

However, having these campaign funds available might make a difference to a candidate who is neither a billionaire nor entrenched as part of the political establishment.  Who knows, maybe one day someone as far removed from the political scene as a former surgeon can go on to become president of the United States thanks in part to these public campaign funds.

According to the instructions to the Form 1040:

Presidential Election Campaign Fund

This fund helps pay for Presidential election campaigns. The fund reduces candidates' dependence on large contributions from individuals and groups and places candidates on an equal financial footing in the general election. The fund also helps pay for pediatric medical research. If you want $3 to go to this fund, check the box. If you are filing a joint return, your spouse can also have $3 go to the fund. If you check a box, your tax or refund won't change.

TOP


ANDREW SCHWARTZ CPA TO SPEAK AT THIS YEAR'S NEGASC CONFERENCE

Mark your calendars.  The New England Graduate Accounting Studies Conference, Inc. (NEGASC) has invited Andrew Schwartz CPA to present to other CPAs and accounting professionals at their annual conference.  NEGASC 2017 will be held at the University of St. Joseph, located in West Hartford, CT, from June 20 through 23, 2017.  

 

Andrew's presentation will be on building a Niche accounting firm.  Over the past 29 years, Andrew has focused his CPA firm on the tax and basic financial planning issues affecting healthcare professionals and their practices.  With the help of his brother Rick,  their firm has grown to 20 staff members preparing personal taxes for a few thousand physicians, dentists, and psychologists each winter while also providing accounting, tax and payroll services to more than 250 dental and medical practices throughout the year.

 

The New England Graduate Accounting Studies Conference, Inc. (NEGASC) is an independent organization, run largely by non-paid volunteers. Its mission is to provide high quality and affordable professional learning to the US accounting profession through its annual conference.  NEGASC is not affiliated with, nor endorsed by, the Internal Revenue Service, any Federal or State agency, the American Institute of Certified Public Accountants, or any State society of CPAs.

 

The New England Graduate Accounting Studies Conference is among the oldest non-profit organizations set up to further CPA knowledge and education.  It’s does this by holding an annual conference, in which twenty (20) hours of continuing professional education (CPE) are offered.  The location of the annual seminar changes every year, but is held at a college or university in one of the New England states every June.  

 

TOP


PARENTS CAN FILE THEIR KIDS' TAX RETURNS FOR FREE THROUGH IRS.GOV

by Andrew D. Schwartz, CPA

If your high school or college aged child needs to file a tax return only to have federal or state income taxes withheld from their pay refunded, then why not file for free?  For federal taxes, this applies to dependents who earned no more than $6,300 (in 2016) unless they also have investment income exceeding $350.

Even if your child earns more than $6,300, if the only income is from W-2 wages, then please take advantage of the free filing.  Just be careful to make sure that you indicate that the child can be claimed as your dependent on their return.

While preparing your child's tax returns, please consider contributing the lesser of your child's gross wages, or $5,500, into a Roth IRA for your child.  Think decades of tax-free compounded growth on those contributions.

If a child is filing a tax return ro report significant investment income, however, the overly complex Kiddie Tax rules should deter most parents from trying to file for their kids using the free software.  

If you do have a working child and that child won't earn more than $6,400 in wages during 2017, please instruct your child to claim Exempt on Line 7 of the W4 form to avoid the need to file a tax return for that child.

Please also share these great resources with your working child:

And here is the information form the IRS regarding filing simple tax returns for free:

Use IRS Free File Software on Smart Phones or Tablets

IR-2017-21, Feb. 2, 2017                             

WASHINGTON – The Internal Revenue Service today announced that taxpayers now may use their smart phones or tablets to electronically prepare and file their federal and state tax returns through IRS Free File.

The IRS and its private-sector partners who offer their brand-name software products for free now support a new design that allows for the use of desktops, laptops, mobile phones and tablets.

You may access the products using mobile devices in two ways: (1) Use the IRS app, IRS2Go, which has a link to the Free File Software Lookup Tool or (2) use the device’s browser to go to www.IRS.gov/freefile and select the “Free File Software Lookup Tool” or “Start Free File Now” to find the software product that matches your situation. The IRS2Go app is available for Android and iOS devices.

Taxpayers with adjusted gross income of $64,000 or less will find one or more free software options. Each of the 12 software providers set the eligibility requirements for their product, generally based on age, income or state residency. The Free File Software Lookup Tool asks a few questions to help you identify the appropriate software products.

Some partners offer free federal and free state tax return preparation; some charge a fee for state return preparation. Active duty military personnel whose income was $64,000 or less are exempt from any eligibility requirements and may use any Free File product they choose to file their federal return for free.

The Free File software allows for free electronic tax preparation and filing and direct deposit of refunds. Some taxpayers may need their 2015 adjusted gross income if they filed a return, in order to validate their identities and complete the electronic filing process.

TOP


TAX AND FINANCIAL PLANNING CALENDAR FOR MARCH 2017

Month

Income Taxes

Saving and Investing

 

March

  • To have your returns completed by 4/15, please get your information to one of the MDTAXES CPAs during March
  • Use your tax refund to pay off some debts, fund an IRA, and/or invest.

 TOP


2016 & 2017 TAX FACTS

  • For 2016, the standard deduction for a single individual is $6,300 and for a married couple is $12,600. A person will benefit by itemizing once allowable deductions exceed the applicable standard deduction. Itemized deductions include state and local income taxes (or sales taxes), real estate taxes, mortgage interest, charitable contributions, and unreimbursed employee business expenses.
  • For 2016, the personal exemption is $4,050. Individuals will claim a personal deduction for themselves, their spouse, and their dependents. 
  • The maximum earnings subject to social security taxes is $127,200 for 2017, up from $118,500 for 2015 and 2016.
  • The standard mileage rate is $.535 per business mile as of January 1, 2017, down from $.54 for 2016.
  • The maximum annual salary deferral into a 401(k) plan or a 403(b) plan is $18,000 in 2015, 2016 and 2017, up from $17.5k in 2014.  And if you'll be 50 or older by December 31st, you can contribute an extra $6,000 into your 401(k) or 403(b) account this year.
  • The maximum annual contribution to your IRA is $5,500 for 2014 through 2017.  And if you turn 50 by December 31st, you can contribute an extra $1,000 that year.  You have until April 15, 2017 to make your 2016 IRA contributions.

TOP

Need Help With Your Nanny Payroll?
 

This Month's Topics

The $3 Reaction To Last Fall's Election

Andrew Schwartz CPA To Speak At This Year's NEGASC Conference

Parents Can File Their Kids' Tax Returns For Free Through IRS.GOV

The FICA Refund for Medical Residents 

2016 & 2017 Tax Facts

Tax and Financial Planning Calendar for March 2017

 

NEWSLETTER ARCHIVES
Browse our index of previous months' newsletter topics

Need a Lawyer or
Financial Advisor?


Directory of Lawyers &
Directory of Financial Advisors
 Lists of MDTAXES-affiliated professionals experienced with the issues that affect you and your colleagues.

Not a Healthcare Professional?

Go to FindAGoodCPA.com to locate a tax professional in your metropolitan area based on the professional's specialty.

WHAT'S NEW WITH THE FICA REFUND?

In a shocking development, the IRS recently announced that they will be honoring the FICA tax refunds submitted by residency programs and individual doctors.  The catch is that only FICA taxes paid prior to 4/1/05 qualify.

For more information, go to our April 2010 Newsletter, our January 2009 Newsletter, or our February 2001 Newsletter or read through the IRS' Chief Counsel Advice Memorandum on this issue.

Let's work together to keep current on this hugely valuable tax break.  Please post whatever you read or hear regarding this FICA issue on our new Message Board we set up just for this topic.

 

 
Copyright 2017 The MDTAXES Network by CPANiche, LLC    Email us at  admin@cpaniche.com