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McNamee Hosea Tax Law team

What are the New Tax Limits, Exemptions and Deadlines for Businesses in 2017?

Esther A. Streete

Tax law is complex and constantly changing. As a business professional, proper tax planning is critical to maximize your financial holdings. Familiarize yourself with the new tax limits, exemptions and deadlines to better prepare yourself and your business in 2017.

What are the limits for estate, gift and generation skipping tax exemptions in 2017?

Effective January 1, 2017, under the unified tax system, the exemption will be $5,490,000.00  for all three (3) taxes:

  • estate tax exemptions
  • gift tax exemptions
  • generation skipping tax exemptions.

What is the annual gift tax exclusion for 2017?

The annual gift tax exclusion remains at $14,000.00 in 2017.

What is the Maryland estate tax exemptions for 2017?

Effective January 1, 2017, the Maryland estate tax exemption increases to $3,000,000.00.

What is the deadline for filing taxes for businesses?

The due date for filing partnership and C Corporation tax returns was modified by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. Generally applicable to returns for tax years beginning after Dec.31, 2015, both IRS Forms 1120-S (for S corporations) and 1065 (for partnerships/LLCs) are due on or before the 15th day of the third month following the close of the tax year (March 15 for calendar-year taxpayers). The due date for the filing of Form 1120 by C corporations is changed to the 15th day of the fourth month following the close of the tax year (April 15 for calendar-year taxpayers).

What is the PATH Act?

The Protecting Americans from Tax Hikes Act of 2015 (PATH Act), enacted at the end of 2015, made permanent many business-related provisions that had been up for renewal, including:

  • The 100-percent gain exclusion on qualified small business stock
  • The reduced, five-year recognition period for S corporation built-in gains tax
  • 15-year straight-line cost recovery for qualified leasehold improvements, restaurant property and retail improvements
  • Charitable deductions for the contribution of food inventory and others

What is included in the PATH Act extensions?

The PATH Act extended the bonus depreciation and the Work Opportunity Credit provisions available for five-years. In addition to extending bonus depreciation, a number of modifications have been made that:

  • reduces the bonus rate from 50 percent to 40 percent for property placed in service in 2018 and to 30 percent for property placed in service in 2019 (for 2016 and again for 2017 it remains at 50 percent)
  • replaces the bonus allowance for qualified leasehold improvement property with a bonus allowance for additions and improvements to the interior of any nonresidential real property, effective for property placed in service after 2015
  • allows farmers to claim a 50 percent deduction in place of bonus depreciation on certain trees, vines, and plants in the year of planting or grafting rather than the placed-in-service year, effective for planting and grafting after 2015
  • reduces the $8,000 bump-up in the first year luxury car depreciation cap for passenger automobiles on which bonus depreciation is claimed to $6,400 for passenger automobiles placed in service in 2018 and $4,800 for passenger automobiles placed in service in 2019, and only if the taxpayer does not generally elect out of bonus depreciation; and
  • extends long-term accounting method relief for bonus depreciation claimed on property placed in service in 2015 through 2019.

Whether you want to plan ahead to avoid potential risks or are dealing with a tax controversy, the attorneys at McNamee Hosea have more than 30 years of experience offering strategic solutions to maximize your unique financial interests. Contact our law firm today to schedule a consultation in Greenbelt or Annapolis, Maryland.