2017 Year-End Planning – Business Expired, Expiring and New 2017 Provisions

Posted by Valerie Middlebrooks, CPA

As we approach year end, now is a good time to review the changes in business tax provisions including those that expired in 2016, those that will expire in future years, and those that began in 2017.  While we are all aware that Congress is working on a new tax bill, it is still good to review the current tax landscape.

Provisions that expired on December 31, 2016 include:

  • New Energy Efficient Homes Credit – $2,000/$1,000 per home contractor credit.
  • Energy Efficient Commercial Buildings Deduction – maximum deduction of the excess of the product of $1.80 times the square footage of the building over total claimed in earlier tax years.
  • Three-year depreciation for race horses two years old or younger.
  • Five-year recovery period for certain energy property.
  • Deduction allowable for income attributable to domestic production in Puerto Rico – 9%.
  • Special rate for qualified timber gains – 23.8%.
  • Excise tax credits for alternative fuel and alternative fuel mixtures.

Some provisions expiring in future years that you should be aware of:

  • New market tax credits – expiring 12/31/19.
  • Additional first-year depreciation for qualified property – expiring 12/31/19.
  • Election to accelerate AMT credits in lieu of additional first-year depreciation – expiring 12/31/19.

As a reminder, these provisions started in 2017:

  • Solar Heating Credit – tax credit on the cost of solar heating units and fuel cells falls to 10%.
  • Social Security Tax Contribution – increased to $127,200.
  • Business Standard Mileage Rate – decreased to 53.5 cents per mile.
  • Tax-Free Parking for Employees – $255 a month for parking and transit.
  • Health Care Flexible Spending Accounts – employees can contribute up to $2,600.
  • Accelerated Due Dates for Informational Returns – Forms W-2, W-3 and 1099-MISC must be filed by January 31 and there is no longer an extension for electronically filed returns.
  • Safe Harbor for de minimis errors on information returns – if the error is $100 or less (or $25 for errors involving withholding) issuer is not required to file a corrected return and no penalty is imposed.
  • Partnership and S-Corporations Filing Deadlines – due by March 15 (calendar year filers).
  • C Corporation Filing Deadlines – due by April 15 (calendar year filers).
  • User Fees for Pre-Filing Arrangements – increased from $134,000 to $218,600.
  • IRS Fast Track Settlement Program – made permanent for small businesses and self-employed individuals to reach agreement on tax disputes.

Photo by Wellness GM, (License)

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