Recently, the IRS issued the annual inflation adjustments for 2017 for more than 50 tax provisions as well as the 2017 tax rate tables for individuals and estates and trusts (Rev. Proc. 2016-55). These provisions are used to file tax year 2017 returns in 2018.

The Social Security Administration has announced that the wage base for computing the Social Security tax (OASDI) in 2017 will increase to $127,200.

The Social Security Administration has announced that, for 2017, cash remuneration paid by an employer for domestic service in the employer's private home isn't FICA wages if the amount paid during the year is less than $2,000.

Tax Breaks for College Expenses

Tax breaks for college expenses

If you're a college student (or the parent of one), you should know about some key tax breaks that are available to you when you do your taxes.

Tax Credits

There are two tax credits for higher education. They're targeted at different types of students, so it pays to know the differences.

American Opportunity Credit

This credit is for students who are earning their undergraduate degrees. The credit is specifically limited to those expenses incurred in the first four years of college. The credit is worth $2,500; the really good news is that $1,000 of that is refundable, meaning you could get that back as a refund even if you don't owe any taxes. There's an $80,000 income ceiling for single filers to qualify for the credit ($160,000 if you're married filing jointly). If income is more than those amounts, the credit starts to decrease. The credit is available through the 2017 tax year.

Lifetime Learning Credit

Where the American Opportunity Credit is limited to the first four years of college, the Lifetime Learning Credit has a wider availability. This credit can be used for graduate school, undergraduate expenses, even professional or vocational courses. Plus, there's no limit to how many years you can claim it.

This credit, however, is nonrefundable, which means it's limited to your tax liability. For example, if you qualified for the full $2,000 Lifetime Learning Credit, but had a tax liability of $500 for the year, you'd get a credit for $500.

Credits vs. deductions: What's the difference?

Tax breaks for higher education come in two basic forms: credits and deductions. Credits reduce the amount of tax that you owe on your tax return. Deductions reduce the amount of income that's considered taxable: less income taxed means less income tax.

Deductions

The two deductions below are not available if you are filing married filing separately, or if someone else - such as a parent - claims you as a dependent on their return. Parents can still claim the deductions, provided they paid the expenses.

Tuition and Fees Deduction

If you don't qualify for one of the education credits, you may still be able to deduct your tuition and fees. The deduction can cut your taxable income by up to $4,000. It's taken as an adjustment to income, which means you can claim this deduction even if you don't itemize deductions. The income limit for this deduction is $80,000 for single taxpayers, or $160,000 for married filing jointly.

Student Loan Interest Deduction

This deduction helps to defray the interest you have on your student loans. This deduction can reduce your taxable income by up to $2,500. Like the tuition and fees deduction, it's taken as an adjustment to income, so you can claim it even if you don't itemize deductions.

One Per Customer, Please

One thing to remember, though: for each student, you can claim either the American Opportunity Credit, or the Lifetime Learning Credit, or the tuition and fees deduction. The IRS won't let you take more than one of these particular tax breaks for the same person on the same return.

But: Parents claiming two or more college kids as dependents on their return can claim one of these tax breaks for one student and another for a different student. You can still take the student loan interest deduction even if you're claiming one of the other tax breaks.

office-paperworkThe deadlines for filing the Form W-2 with the Social Security Administration and the Form 1099-MISC with the Internal Revenue Service are changing next year.

Starting in 2017, for the 2016 reporting year, both the W-2 and 1099-MISC recipient copies need to be submitted by January 31, whether by paper or electronic filing. That is months earlier than previous years and promises to increase both workloads and stress levels for companies and their accountants alike.

Making matters even more complicated, the new filing deadline, as it relates to Form 1099-MISC, only affects filers that report nonemployee compensation payments in box 7. The overwhelming majority of 1099-MISC filers will report information in box 7, so there's sure to be plenty of confusion.

Historically, filers have been required to provide both W-2 and 1099-MISC forms to their recipients by January 31. However, in the past they were not required to submit the forms to the Social Security Administration or the IRS until February 28 for paper forms or March 31 for e-filing. With three months of work being condensed into 30 days, the change is likely to add plenty of work for filers next January. On top of that, the filing deadlines for Forms 1095-B and 1095-C also come on January 31 for recipient delivery, Greatland pointed out. This compressed schedule means businesses will face a time crunch when they need to do wage, income, and Affordable Care Act-related reporting for 2016.

Before the deadline change, businesses would be able to file W-2 and 1099-MISC recipient copies first and then wait to learn if any changes are needed before filing with the Social Security Administration or the IRS, which reduced the risk for possible corrections. Unfortunately, thanks to the advanced deadline next year, businesses might need to abandon that strategy and consider filing with the recipients and the SSA and IRS at the same time.

But that's not all. To further complicate the multiple filing deadlines in January, the IRS recently eliminated the automatic 30-day extension of time to file W-2 forms. Before that, filers could automatically get a 30-day extension by submitting Form 8809 to the IRS on or before January 31. Filers were also able to request an additional 30-day extension, so they could push their e-file deadline out to the end of May. Now those automatic extensions won't be available for business that need to file their W-2 forms for tax year 2016.

SC-Withholding-Amounts-will-Change-for-2017In January 2017, South Carolina is updating Withholding Tax tables for the first time in 25 years. This is a big change to South Carolina's Withholding process, and we want you to be ready!

Are you an individual taxpayer? No action is necessary to prepare for this change. Beginning in 2017, you may notice a very small increase in your paychecks throughout the year which will result in a slightly smaller South Carolina income tax refund in 2018.

Employers who process their own payrolls will need to make sure your withholding tables are updated for these changes before you run your first 2017 payroll!