Part 1: Three Timely Tips for Tax Day, 2017
Especially if you’re a business owner (and even if you’re not), shortly after we’re done celebrating the New Year, our minds tend to turn to that next red-letter event: Tax Day. This year, that’s April 18 for most of us … unless you’re a patriot who files in Maine or Massachusetts, in which case, congratulations, it’s April 19!
Regardless of the exact date, there are mini-deadlines and other action items that tend to be “taxing” throughout the first quarter. There are those mid-January estimated payments. Then there are W-2s due to employees and certain Form 1099s due to household employees and various other service providers by the end of January. If you’re working with a tax professional (such as our affiliated firm, DHAS CPAs), I know how much they appreciate your completing your organizer, or at least bringing them your “shoe box” of records in a timely manner, so they can do their best work on your behalf.
To help you get a leg up on this and future tax seasons, we’ll share some ideas you can apply immediately as well as a few ways to prepare for future efficiencies.
First up, here are three timely tips for the tax season already under way.
1. This Year and Every Year: Watch Out for Tax Scams
We’ve covered this one before (and even had our commentary published by Nasdaq), but most other tax tips pale in comparison to remaining on guard against the ongoing stream of tax scams.
- Augmenting last year’s still relevant “Dirty Dozen Tax Scams,” the IRS just published an update, suggesting that phishing (bogus e-mails from imposters posing as the IRS) remains prevalent this year as well. Remember, the IRS does NOT call or e-mail you out of the blue. If the IRS needs to reach you personally, the initial contact will be by snail mail.
- If you or anyone you know is an HR professional, also pay particular attention to this spreading phishing scam, in which an imposter posing as your boss seeks W-2 info about your employees – now targeting not-for-profit and for-profit organizations.
Action item: If anyone does spring a call or e-mail on you, demanding tax payments or even just requesting information – hang up, pronto if it’s a phone call. If it’s an e-mail, do not reply to it and do not click on any of the links. No peeking! You can also report the suspicious call or e-mail to the actual IRS.
2. What’s New?
Since some of our best friends are CPAs (such as Larry and his partners at DHAS), we know how much time it takes to keep up with everything there is to know about income taxes. Instead of trying to learn it all, it helps to at least familiarize yourself with what’s changed.
Action item: Check out our affiliated accounting firm DHAS’ recent post, “10 Important Tax-Related Developments for 2016,” to see if any of these relatively widespread changes may impact your personal or business income taxes.
3. Have You Made the Most of Your Tax-Sheltered Accounts?
Usually, once a tax year is over, it’s over. But don’t forget that you can still make 2016 contributions to your Traditional or Roth IRAs up until April 18th 2017 (or, again, April 19th for ME or MA residents). A 2016 SEP IRA contribution can also be made in 2017, up to the April 18, 2017 due date, plus extensions. Ed Slott notes that “A 2016 Roth conversion can be undone up to Oct. 16, 2017 whether or not an extension is filed. This could come in handy if new tax legislation reduces tax rates.”
Action item: To say the least, there may be a lot of events affecting us and our pocketbooks this year over which we’ll have little control. Saving for your retirement is one action you can own and, while you’re at it, potentially shave off some immediate taxes due.
Next Up: Tax Planning … to Infinity and Beyond
Beyond each year’s immediate tax preparation duties, there are a number of ways you can coordinate your tax planning with your overall investment management, retirement planning and estate planning alike. This is where (no pun intended) a sage adviser with a broad view of your total wealth interests can help you uber-optimize your actions. We’ll cover a few ideas on this front in our next post.
SAGE Serendipity: Terry Gross, host of NPR’s Fresh Air, spoke with Jeff Turow, author of the new book “The Aisles Have Eyes: How Retailers Track Your Shopping, Strip Your Privacy, And Define Your Power.”
Here’s a bit of the conversation:
” TUROW: Phones are, in many ways, a marketing device. People don’t realize it, but there’s so much in the phone that can be used by marketers, even to the point of knowing where you are in a mall based upon the accelerometer, what level you’re on. OK?
GROSS: Whoa, whoa, whoa. The accelerometer, what is that?
TUROW: There’s an accelerometer in the phone that can tell whether you’re going up or down.”
Listen to the full conversation here.