The Internal Revenue Service encouraged taxpayers to consider a mid-year tax withholding checkup following several new factors that could affect their refunds in 2017. Taking a closer look at the taxes being withheld can help ensure the right amount is withheld, either for tax refund purposes or to avoid an unexpected tax bill next year.
Making a tax-free contribution from your IRA
Knowing the ins and outs of qualified charitable distributions (QCD) can ultimately save you time and money down the road. A QCD is generally a nontaxable distribution from your IRA account made to an organization eligible to receive tax deductible contributions. If you’re over the age of 70½, you may transfer up to $100,000 from your IRA to a charitable organization without having to include the income on your Form 1040. If you file a joint return, your spouse can also have a QCD and exclude up to $100,000.
Avoid penalties for not having minimum essential coverage.
To avoid a penalty for not having health insurance, you must be enrolled in a plan that qualifies as minimum essential coverage (MEC). You won’t be subject to a penalty as long as you have coverage under any of the following:
• A health plan bought through the Health Insurance Marketplace.
• An individual health plan bought outside the Health Insurance Marketplace, if it meets the standard for qualified health plans.