Filing Requirements for Children

When should you file a tax return for your child? If your child receives a W-2 and the amount is greater than $6,350 then a return is required. Also if withholding was done on your child's W-2 then you should file a return to obtain a refund even if the W-2 amount is less than $6,350. You don't want to let the government keep it. If your child receives a 1099 with box 7 filled out which is nonemployee compensation, then a return is required if the amount is $400 or more because self employment tax of 15.3% is due on net self employment income. The IRS considers interest, dividends, and capital gains unearned income and your child is required to file a return if the amount of such income is greater than $1,050.

1099's and W-2's

The season of 1099's and W-2's is now here for 2017. You are supposed to receive them by 1/31/2018. In the next two weeks you will be receiving many 1099's and W-2's relating to interest and dividend income, social security income, wage income, other income, mortgage interest, college tuition payments, pension and IRA distributions, etc. Make sure you save all of these tax documents as they have been reported to the IRS and you will be subject to penalties if you don't report the same amounts on your return. Give these documents to me for your 2017 tax return. I make a computer copy for your file in case you get a notice from the IRS in the future regarding your tax return.

Mileage Rates for 2018

The IRS has changed the mileage rate for business miles starting January 1, 2018 from 53.5 cents per mile to 54.5 cents per mile. The medical and moving rate is up one cent to 18 cents per mile. Charitable mileage remains at 14 cents per mile.

Obamacare Question on the 2017 Tax Return

Unfortunately you won't have the option of not answering the question concerning your qualified health care coverage during 2017 like you did on the 2016 income tax return. The IRS is now going to force you to answer the question. This means that you will will have to pay a substantial penalty if you didn't have qualified health insurance unless you qualify for one of the exemptions such as low income or only a two month break in coverage.

Expired Tax Breaks

The provisions below expired at the end of 2016 and won't be available for the 2017 tax return.
1. The $4,000 tuition and fees deduction for adjusted gross income is no longer available.
2. The cancellation of mortgage debt for a principal residence which allowed up to a $2 million  income exclusion from taxable income has expired.
3. The personal energy property credit up to $500 has finally expired.
4. The mortgage insurance premium deduction is gone.