As we are now truly in the throes (or joy, depending on your perspective) of tax season, I decided to use this month’s blog to toss a smattering of random thoughts your way related to 2017 and predictions for tax-related events and changes to be determined this year. The 2016 election results have thrown the future of many existing income tax laws and regulations into a tailspin of uncertainty. Although Congress and the White House are controlled by those from the same party (although that is somewhat debatable as a stretch), the actual outcome of the upcoming tax law debate is unknown. Everyone agrees that tax law change is inevitable. However, the nature and timing of when the law will change is anything but certain. Congressional leaders and the President don’t appear to be on the same page at this time although they may, at least, be in the same book.
As for the odds-on timing for when tax reform legislation may be passed, many feel that new laws will likely be pushed through by April or May this year. However, the effective date of the new legislation and tax rules may likely be next year and take effect for tax year 2018 and beyond. Much of this delay could be due to the ongoing wrangling in Congress through February and March dealing with the approval of Cabinet nominees and some sort of repeal or replacement of the Affordable Care Act (Obamacare).
Those who filed their 2016 income tax returns early when the e-filing season opened on January 23rd hoping to receive their refunds quickly may have been disappointed because many refunds were delayed until at least February 15th (this week) due to the provisions of the PATH Act. Those return refunds affected would include refunds where the earned income credit or additional child tax credits are involved. At least those delays should be over as of this week.
The repeal or replacement of the Affordable Care Act will likely take much longer than expected. The effective date for whatever changes are decided upon likely won’t be until late this year or even into 2018. It is likely that some of the provisions of Obamacare will be maintained within the framework of the new healthcare law that is passed.
Lastly, keep in mind that the tax filing deadlines changed for many business returns starting with the 2016 tax returns and this filing season. Form 1065 partnership returns that have always been due in April are now due initially by March 15th. Form 1120 corporate returns that have always been due in March are now due initially by April 18th (the April deadline is the 18th this year due to the 15th falling on a weekend and the Washington, DC holiday on the 17th).
This means that there are less than four weeks until the initial due date (3-15-17) for all partnership and S-corporation returns and there are less than 9 weeks until the April filing deadline (4-18-17) for individual, C-corporation and fiduciary returns. If you have not yet provided us your 2016 tax documents and information, please do so by next week, if possible, to allow us adequate time to complete your returns by the deadlines. Please contact us if you have any questions.