Tuesday August 14, 2018
IRS Year-End Reminders
With the continued effort by the IRS to make the entire tax system more secure, there are a number of actions taxpayers can take to plan for a smooth tax filing experience. These seven IRS year-end tips will be helpful for all taxpayers.
- Charitable Gifts - Your charitable gifts must be delivered by December 31. Checks postmarked in the U.S. Mail before year-end will qualify, even if the checks are cashed by the nonprofit in January. Credit card gifts by December 31 also qualify, even if you pay the bill in January.
- IRA Distributions - If you are over age 70½, you must take a required minimum distribution (RMD) from your traditional IRA. Normally, this RMD starts at about 3.8% of your IRA balance. If you reach age 70½ in 2017, you may wait and take the first distribution on April 1, 2018. If you are 70½ and use a qualified charitable distribution (QCD), you may transfer up to $100,000 per year from your IRA custodian directly to a qualified charity. This distribution may fulfill your RMD for the year.
- IRA Funding - Most workplace qualified retirement plans are funded by December 31. However, your 2017 IRA contribution of up to $5,500 ($6,500 for IRA owners age 50 and over) may be made up to April 18, 2018.
- Tax Refunds - You should not depend on receiving your refund by a specific date. The IRS urges you not to commit to any expenditure that will require receiving your refund by a fixed date. If you have moved, you may file IRS Form 8822, Change of Address. Your refund may be delayed until late February if you claim the Earned Income Tax Credit (EITC) or Added Child Tax Credit (ACTC).
- Name Changes - if there is a marriage or a divorce with a name change, you should notify the Social Security Administration (SSA). The IRS compares names with SSA records. If there is a difference, it may delay your refund.
- Individual Tax Identification Numbers (ITIN) - Some taxpayers use an ITIN for filing their returns. If your ITIN has not been used for three years, it will expire on December 31. An ITIN issued in 2012 or earlier years with middle digits of 70, 71, 72 or 80 must be renewed. If you have previously used an ITIN for tax filing and do not renew it, your refund may be delayed.
- Tax Return Copies - It is good practice to keep copies of your tax returns on file. If you are using tax software to file your return for 2017, it may require you to enter the 2016 adjusted gross income (AGI). If you do not have your 2016 return, you can obtain a transcript from the IRS by calling 800-908-9946.