A Review of the TOP TEN 2017 TAX UPDATES

active real estate income

A lot has happened this year in the real estate market and the general economy.  It impacts the portfolio of many Real Estate Investors – The value of our assets, how we want to invest in coming years, and even our retirement planning.  It also impacts 2016 tax issues that will be confronting us in the upcoming tax filing season.

  1. Make sure you take the time to read and understand your financial statements, your prior year tax returns, and your bank statements. I am seeing quite a few clients that have no clue how their prior returns were prepared, if the bookkeeping is being done right or if the bank statements are being properly reconciled.
  2. Under the 2015 PATH Act, beginning with forms filed in 2017, Forms W-2, W-3, and returns to report non-employee compensation (e.g., Form 1099-MISC), must be filed on or before January 31 of the year following the calendar year to which such returns relate. And those returns are no longer eligible for the extended filing date for electronically filed returns. (Code Sec. 6071(c)).
  3. Partnerships, as well as S corporations, must file their returns by the 15th day of the third month after the end of the tax year. (Code Sec. 6072(b)) For prior returns, partnerships had to file by the 15th day of the fourth month after the end of the tax year. If you generated any active real estate income, have you considered restructuring your business to minimize the impact of self-employment taxes?
  4. C corporations generally must file by the 15th day of the fourth month (it had been the third month) after the end of the tax year. However, for C corporations with fiscal years ending on June 30, the filing date continues to be the 15th day of the third month after the end of the tax year.
  5. If you have significant business expenses and already have a registered business, have you considered converting to a multi-member LLC to avoid an audit flag?
  6. Tax Season this year ends on Monday, April 17th (a day after Easter). This means that most offices will more than likely complete tax season on Friday, April 14th to give staff enough time to enjoy the Easter Break. You can always file an extension.
  7. Make sure you know what you need to report to the IRS on your health insurance. The shared responsibility provision requires that you and your family have minimum essential coverage or qualify for a health coverage exemption. Otherwise, you must make an individual shared responsibility payment for all months that you didn’t have coverage or an exemption.
  8. It’s not too late to make contributions out of business earnings. You can set up a SEP-IRA contribute to it and then convert or move the funds into a SOLOK plan.
  1. The IRS will never:
  • Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.
  • Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
  1. You are responsible for your return. Know what, where, why, how your return is being prepared.

Ebere Okoye, CPA

Keep more of your Money this tax season:
Office: (301) 441-4538
Website: www.theWealthBuildingCPA.com