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Important Tax Figures for 2017
 

The following table provides some important federal tax information for 2017, as compared with 2016. Many of the dollar amounts are unchanged or have changed only slightly due to low inflation. Other amounts are changing due to legislation.

Social Security/ Medicare 2017 2016
Social Security Tax Wage Base $127,200 $118,500
Medicare Tax Wage Base No limit No limit
Employee portion of Social Security 6.2% 6.2%
Individual Retirement Accounts 2017 2016
Roth IRA Individual, up to 100% of earned income $5,500 $5,500
Traditional IRA Individual, up to 100% of earned Income $5,500 $ 5,500
Roth and traditional IRA additional annual “catch-up” contributions for account owners age 50 and older $1,000 $ 1,000
Qualified Plan Limits 2017 2016
Defined Contribution Plan limit on additions on Sections 415(c)(1)(A) $54,000 $ 53,000
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A)) $215,000 $210,000
Maximum compensation used to determine contributions $270,000 $265,000
401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2)) $ 18,000 $ 18,000
401(k), 403(b), 457 & SARSEP additional “catch-up” contributions for employees age 50 and older $ 6,000 $ 6,000
SIMPLE deferrals (Section 408(p)(2)(A)) $ 12,500 $ 12,500
SIMPLE additional “catch-up” contributions for employees age 50 and older $ 3,000 $ 3,000
Compensation defining highly compensated employee (Section 414(q)(1)(B)) $120,000 $120,000
Compensation defining key employee (officer) $175,000 $170,000
Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c)) $600 $600
Driving Deductions 2017 2016
Business mileage, per mile 53.5 cents 54 cents
Charitable mileage, per mile 14 cents 14 cents
Medical and moving, per mile 17 cents 19 cents
Business Equipment 2017 2016
Maximum Section 179 deduction $510,000 $500,000
Phase out for Section 179 $2.03 million $2.01 million
Transportation Fringe Benefit Exclusion 2017 2016
Monthly commuter highway vehicle and transit pass $255 $255
Monthly qualified parking $255 $255
Standard Deduction 2017 2016
Married filing jointly $12,700 $12,600
Single (and married filing separately) $6,350 $6,300
Heads of Household $9,350 $9,300
Personal Exemption 2017 2016
Amount $4,050 $4,050
Personal Exemption Phaseout 2017 2016
Married filing jointly and surviving spouses Begins at $313,800 Begins at $311,300
Heads of Household Begins at $287,650 Begins at $285,350
Unmarried individuals Begins at $261,500 Begins at $259,400
Married filing separately Begins at $156,900 Begins at $155,650
Domestic Employees 2017 2016
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc. $ 2,000 $ 2,000
Kiddie Tax 2017 2016
Net unearned income not subject to the “Kiddie Tax” $ 2,100 $ 2,100
Estate Tax 2017 2016
Federal estate tax exemption $5.49 million $5.45 million
Maximum estate tax rate 40% 40%
Annual Gift Exclusion 2017 2016
Amount you can give each recipient $14,000 $14,000

© 2017

 
 

Tax Deadlines Loom for Employers. Minimum Wages Rise in Many States
 
 
Many employers will be facing more payroll-related changes at the state level this year than they will at the federal level. That’s because the minimum wage in many states was raised January 1 and surpasses the $7.25 federal minimum, which has prevailed since 2009. Other states are planning to raise their minimum wages later in 2017.
 

 

 

States that Just Raised their Minimum Wages
 
A number of states increased their minimum wages on January 1. Here’s a list of the hourly wages:
 
Alaska, from $9.75 to $9.80 (including tipped employees);
 
Arizona, from $8.05 to $10 (for tipped employees, from $5.05 to $7);
 
Arkansas, from $8 to $8.50 (tipped employees will continue to receive $2.63);
 
California, from $10 to $10.50 for employers with 26 employees or more (including tipped employees);
 
Colorado, from $8.31 to $9.30 (for tipped employees, from $5.29 to $6.28);
 
Connecticut, from $9.60 to $10.10 (for bartenders, from $7.82 to $8.23, and for other persons in the hotel and restaurant industry, from $6.07 to $6.38);
 
Florida, from $8.05 to $8.10 (for tipped employees, from $5.03 to $5.08);
 
Hawaii, from $8.50 to $9.25 (for tipped employees, from $7.75 to $8.50);
 
Maine, from $7.50 to $9 (for tipped employees, from $3.75 to $5);
 
Massachusetts, from $10 to $11 (for tipped employees, from $3.35 to $3.75):
 
Michigan, to $8.90 (for tipped employees, from $3.23 to $3.38);
 
Missouri, to $7.70 (for tipped employees, from $3.825 to $3.85);
 
Montana, to $8.15 (including tipped employees);
 
New Jersey, from $8.38 to $8.44 (tipped employees will continue to receive $2.13);
 
New York, from $9 to: (1) $11 for NYC employers with 11 or more employees, (2) $10.50 for NYC employers with 10 or fewer employees, (3) $10 per hour for Nassau, Suffolk and Westchester county employers, and (4) $9.70 per hour for employers in areas not noted above;
 
Ohio, from $8.10 to $8.15 (for tipped employees, from $4.05 to $4.08);
 
Rhode Island, change only for tipped employees from $3.39 to $3.89;
 
South Dakota, from $8.55 to $8.65 (for tipped employees, from $4.275 to $4.325);
 
Vermont, from $9.60 to $10 (for tipped employees from $4.80 to $5); and
 
Washington, from $9.47 to $11 (including tipped employees).
 
Later this Year
 
Minimum wage increases will take effect in Maryland, Oregon and the District of Columbia on July 1, 2017.
 
Unemployment Tax
 
States that increased the amount of taxable wages subject to unemployment tax in 2017 include: Alaska, Colorado, Hawaii, Idaho, Iowa, Minnesota, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, and Washington. The Virgin Islands also increased its taxable wage base. North Dakota and Wyoming lowered their taxable wage base.

Also, many localities have minimum wages that are higher than their states’ wages. If an employee is subject to state or local laws and the federal minimum wage laws, the employee is entitled to the higher minimum wage rate.Other state-level changes for 2017 include new ceilings for wages subject to unemployment tax.
 
Federal Changes
 
At the federal level, the most significant change that took effect January 1 was a jump in the Social Security wage base, to $127,200 from $118,500 — the level that had been in place since 2015.New federal tax withholding tables reflect a much smaller inflation-based adjustment. So, for example, the 25% tax bracket for single taxpayers in 2017 begins at $37,950 versus $37,650 in 2016. For employees filing joint returns with their spouses, the 25% bracket moved up to $75,900 from $75,300 last year.
 
ACA Information Returns
 
Employers received a minor reprieve on providing Affordable Care Act (ACA) information return statements to employees. It has been extended from January 31 to March 2.Background: The ACA requires health insurance issuers, certain employers, and others that provide “minimum essential health coverage”‘ to individuals to provide information statements to covered individuals.The IRS announced the due date for furnishing Forms 1095-B and 1095-C to recipients is extended from January 31, 2017 to March 2, 2017. The IRS decided to extend the deadline because employers, insurers and other providers of minimum essential coverage need additional time. The extension is automatic. The IRS will not grant further extensions.However, the deadline for filing ACA information returns with the IRS will not be extended. The IRS determined that there’s no similar need for additional time for employers, insurers and other providers of minimum essential coverage to file 2016 Forms 1094-B, 1095-B, 1094-C, and 1095-C with the tax agency. So the filing deadline for these returns remains Feb. 28, 2017, if not filing electronically, or March 31, 2017, if filing electronically.
 
What’s Due January 31?
 
Also of immediate concern to employers are upcoming filing deadlines. According to the IRS, by Jan. 31 you or your payroll service provider will need to:

  • File Form 941 for the fourth quarter of the previous calendar year and deposit any un-deposited income, Social Security, and Medicare taxes. You may pay these taxes with Form 941 if your total tax liability for the quarter is less than $2,500. File Form 944 for the previous calendar year instead of Form 941 if the IRS has notified you in writing to file Form 944 and pay any undeposited income, social security and Medicare taxes.
  • File Form 940 to report any FUTA tax. However, if you deposited all of the FUTA tax when due, you may file by February 10.
  • Furnish each employee a completed Form W-2. Furnish, “Form 1099-MISC,” to payees for nonemployee compensation. Most 1099 forms must be furnished to payees by January 31, but some can be furnished by February 15.
  • File with the Social Security Administration Copy A of all 2016 paper and electronic Forms W-2 with Form W-3, “Transmittal of Wage and Tax Statements.”
  • File with the IRS Copy A of all 2016 paper and electronic Forms 1099 forms that report nonemployee compensation, with Form 1096, “Annual Summary and Transmittal of U.S. Information.”
  • File Form 945 to report any non-payroll federal income tax withheld. If you deposited all taxes when due, you may file by February 10.

How Does February Look?
 
February will greet you with a few more IRS deadlines. By February 15, for example, you’ll need to have requested a W-4 from each employee who claimed an exemption from income tax withholding last year. By the next day, any employee who didn’t submit a new W-4 for 2017 and had previously claimed exemption from withholding, should be subject to tax withholding.And by February 28, you need to File Copy A of all paper 2016 Forms 1099, except Forms 1099-MISC reporting nonemployee compensation, with Form 1096 with the IRS. For electronically filed returns, a March 31 deadline is possible.
 
Need Help?
 
If you have questions or concerns about your organization’s tax filing or payroll requirements, contact your payroll or tax advisor.

 
 
© 2017
 


 
Get Ready Businesses: Some Filing Due Dates Are Changing
 
Thanks to two laws that passed last year, the due dates have been changed for some information returns and related statements and for some business tax returns. Here’s what you need to know.
 

 

Two Laws Are Responsible for the Changes

 
1. The Protecting Americans from Tax Hikes (PATH) Act.Enacted on December 18, 2015, the PATH Act extended or made permanent a number of “tax extenders” (provisions with expiration dates that had been routinely extended by Congress on a one- or two-year basis). It also contained a number of other provisions, including the changed due dates for W-2s and some 1099s.
 
2. The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. This new law was primarily designed as a three-month stopgap extension of the Highway Trust Fund and related measures. But it includes a number of important tax provisions, including the revised due dates for partnership and corporation tax returns. President Obama signed it into law on July 31, 2015.

Earlier Due Dates for Forms 1099-MISC and W-2
 
When a business pays non – employee compensation aggregating to $600 or more to a single payee in a tax year, the business must file a Form 1099-MISC to report the payments to the IRS. Similarly, employers must report wages paid to employees on Forms W-2. Copies of these forms (called payee statements) must also be supplied to payment recipients.
 
Before a law passed last year, Forms 1099-MISC and W-2 were required to be filed with the IRS and the Social Security Administration (SSA) by the last day of February or by March 31 if filed electronically. (See “Two Laws Are Responsible for the Changes” at right.) Now, the due dates have been accelerated.
 
Starting with returns for the 2016 calendar year (which must be filed in early 2017), the due date for IRS and SSA filings is advanced to January 31 of the following year. The March 31 due date for electronic filings is no longer available. So the deadline for filing 2016 Forms 1099-MISC and W-2 with the IRS and the SSA is January 31, 2017.
 
Note: For filing 2016 Forms 1099-MISC and W-2 with the IRS and the SSA, one 30-day extension is allowed. To obtain an extension, you must file Form 8809, “Application for Extension of Time to File Information Returns,” by no later than January 31.
 
The deadline to supply payee statements to recipients remains January 31 with no extensions allowed.
 
Reason for the New W-2 and 1099 Deadline
 
The goal of the new earlier deadline is to:

  • Give the IRS more time to spot errors on tax returns.
  • Make it easier for the tax agency to verify the legitimacy of returns and properly issue refunds to taxpayers eligible to receive them.

Reducing tax refund fraud has been a priority of the federal government in recent years.
 
Later Due Dates for 2016 Corporate Federal Income Tax Returns
 
For many years, C corporation federal income tax returns on Form 1120 were due two and a half months after the end of the corporation’s taxable year (March 15, adjusted for weekends and holidays, for a calendar-year corporation). Form 1120 could be automatically extended for six months (through September 15, adjusted for weekends and holidays, for a calendar-year corporation).
 
However, a law passed last year established new due dates for Form 1120. For tax years beginning after December 31, 2015, the due date is generally moved back one month to three and a half months after the close of the corporation’s tax year (to April 15, adjusted for weekends and holidays, for a calendar-year corporation).
 
Automatic five-month extensions are allowed (to September 15, adjusted for weekends and holidays, for a calendar-year corporation). You must file Form 7004, “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns,” to obtain an automatic extension.
 
The Form 1120S due date for S corporations is unchanged.
 
Note: Under a special transition rule for C corporations with fiscal years ending on June 30, the due date change won’t kick in until tax years beginning after 2025. Until then, the traditional due date of September 15 (adjusted for weekends and holidays) for these corporations will continue to apply, with automatic seven-month extensions allowed.
 
Earlier Due Dates for 2016 Partnership and LLC Returns
 
For many years, partnership federal income tax returns on Form 1065 have been due three and a half months after the end of the partnership tax year. So for a calendar-year partnership, the filing deadline was April 15 of the following year (adjusted for weekends and holidays).
 
The Form 1065 due dates have also now been changed. For partnership tax years beginning after December 31, 2015, the Form 1065 due date is accelerated by one month, to two and a half months after the close of the partnership’s tax year (March 15 for calendar-year partnerships). The same deadline applies to limited liability companies (LLCs) that are treated as partnerships for federal tax purposes.
 
Automatic six-month extensions are allowed (to September 15, adjusted for weekends and holidays, for a calendar-year partnership or LLC). File Form 7004 to obtain an automatic extension.
 
Need Help with Compliance?
 
If you have questions about the new filing deadlines for tax returns or information returns, or you want to file an extension, contact your tax advisor.
 

© 2017
 


 
 
 
Frost Donates Food, and Volunteers for Arkansas Food Bank
 
On Friday, July 31st, 2015, 25 people from the staff of Frost, PLLC volunteered at the Arkansas Food Bank in Little Rock. “We really appreciate all the help the Frost group provided boxing potatoes in our salvage room today,” said, Polly Deems, Volunteer & Outreach Coordinator. “Your energetic workers boxed 12,000 pounds!
 
Frost personnel also donated 1,750 pounds of food and enough cash to to feed 1,500 people.
 
If you would like to donate food, your time, or cash, please visit the AR Food Bank Face book page for more information.
 

 

 


 
Network Penetration Testing . . . A Good Place to Start
 
Blog post by Tyler Morgan of Frost, PLLC
 
The growing chorus of data breaches in the modern corporate world has left many executives with questions around how to respond from a risk management perspective. While no one wants to be the next victim, as always, economics play a strong role in business decision making. With an onslaught of control frameworks and various new “analytic security tools” appearing every day, it can be difficult for executives to decide where to place the organizations funds, to in essence, achieve “the most bang for the buck.”
 
Visit link to read more…
 
http://www.cyber-frost.com/network-penetration-testing-a-good-place-to-start/
 


 
Frost’s T.J. Boyle named by Arkansas Business as one of 40 under 40.
 
T.J. Boyle has been a partner at Frost since 2011, is the CPA firm’s quality control director and leads the assurance/audit department.
 
Click HERE to read the Arkansas Business article.
 

 


 
PAACO Certifies Two New Animal Welfare Audits
 
Excerpt: The Professional Animal Auditor Certification Organization, Inc. (PAACO) has granted Certified Audit status to two audit tools within the past month. The two audits that were reviewed by a PAACO-appointed panel and certified as having met the organization’s 12 minimum criteria are FACTA, LLC’s Humane Certified Animal Welfare Audit Program – Broiler and the Common Swine Industry Audit produced by a coalition of swine industry stakeholders involving customers, suppliers and producers and facilitated by the National Pork Board.
 
Certifying audit instruments is one of the services offered by PAACO, whose welfare auditor trainings and certification of auditors for meat plants and poultry have become an industry standard.
 
In order to become PAACO-certified, the program must be submitted for a third-party review by a species-specific panel of animal welfare experts appointed by PAACO and overseen by a PAACO representative. This group initially critiques the audit for improvements and primarily evaluates it to determine if the audit meets all 12 minimum criteria established by the PAACO board of directors for a certifiable audit instrument. These criteria apply to all meat animal species. PAACO’s board of directors makes the final determination to grant certification status. All certified audits must be reviewed annually and stay current with welfare criteria and standards to maintain certification status.
 
Information on these and other species with certified audits and programs, as well as the 12 core criteria for certified audits, may be found on the “Certification” page of the PAACO website, www.animalauditor.org.
 
Click here to download and read the news release
 


 
Thomson & Company Merges with Frost, PLLC to Expand Agribusiness Reach
 
THOMSON & COMPANY, a full-service CPA firm in Phoenix, Arizona offering comprehensive accounting, tax and business advisory services to clients across the Southwest, is merging with FROST, PLLC. Our merged firm will continue to operate as FROST, PLLC from our offices in Little Rock and Fayetteville, Arkansas, Raleigh, North Carolina, and now Phoenix, Arizona. The merger is effective October 1, 2014.
 
“We are very excited to announce the addition of the Thomson & Company CPAs & Business Advisors, P.C. team to the Frost, PLLC family,” said Doug Richardson, Executive Committee Chairman. “As a combined entity, we will expand our experience, knowledge base and resources while continuing to provide our clients with the exceptional services they expect and deserve. The Thomson & Company associates will broaden our food processing and agriculture expertise to include the dairy industry, date palm production and will increase our row crop representation as well. While the food processing and agriculture industry represents a large portion of our firm’s business, we will continue to offer our clients a broad portfolio of services to meet their accounting needs.”
 
Craig Thomson, President of Thomson & Company, stated “One of Frost’s strengths is its expertise in the food and agriculture industry. Thomson and Company’s strength is also in serving the agriculture industry. The merger of our firm with Frost creates a deeper pool of resources to better serve the needs of agribusiness throughout the country.”
 
Our firm will be led by executive committee members Doug Richardson, Bob Childress and Keith Ekenseair. Frost, PLLC now represents business in 48 states in the U.S.
 
Frost, PLLC will continue as an independent member firm of Moore Stephens North America, which is itself a regional member of Moore Stephens International Limited (MSIL). All the firms in MSIL are independent entities, owned and managed in each location.
 
Click here to download and read the news release
 


 
Gerber Poultry, Inc sets new standards with animal welfare audit system
 
Kidron, Ohio (June 14, 2014) – Gerber Poultry broke new ground in the area of animal welfare and handling with the announcement today of a process for a higher standard of third-party animal welfare audits. Gerber Poultry recently reached an agreement with Farm Animal Care Training and Auditing, (FACTA), to adopt the higher standards of FACTA’s Humane Certified broiler audit tool.
 
FACTA, an organization led by world-renowned experts in animal handling and welfare, conducts independent, professional, science-based animal care training and auditing services based on individual farm benchmarking by credentialed auditors and educators. All FACTA employees are PAACO certified with experience in specific segments of the animal agriculture industry.
 
Click here to download and read the news release
 


 
Frost, PLLC’s Doug Richardson Attends NCC Annual “Day in Washington”
 
Excerpts from NCC News
 
“The National Chicken Council annual “Day in Washington” meeting was held this week during which NCC members and representatives from state poultry associations meet with Members of Congress to discuss issues vital to the U.S. chicken industry. This was the 15th time that Day in Washington was held, and, once again, the Capitol Hill effort was a great success.Groups of NCC members attended more than 50 Capitol Hill meetings that were scheduled on Wednesday in both the Senate and House of Representatives.”
 
“NCC’s Day in Washington is an important educational effort for Members of Congress to understand issues vital to the chicken industry, and we are most grateful to those that took the time away from their businesses to participate in this week’s Capitol Hill meetings.”
 
Richardson and other NCC members met with Senators Mark Pryor and John Boozman, and Representatives Eric “Rick” Crawford, Tim Griffin, Steve Womack, and Tom Cotton.
 
 
 


 
Animal Welfare Challenges: Assessing Your Current Animal Welfare Program
Stephen Shepard, FACTA, Midwest Poultry Consortium, The Feathered Pen

 
Current data suggests that producers that initiate strong Animal Welfare (AW) programs have better quality products and increased productivity. In other words, comprehensive AW programs make good business sense and drive profits. But exactly how do you minimize risk within your company by focusing on AW? It starts with acknowledging your weaknesses and turning them into your strengths.
 
Click here to read the article
 


 
FROST, PLLC Celebtates 40th Corporate Anniversary
 
This year (2014), Frost, PLLC is celebrating 40 years of impeccable service to our beloved clients. Because of ongoing daily commitments by the Frost team, past and present, Frost, PLLC has become a leading independent accounting firm both regionally and nationally.
 
Please like our Facebook page www.facebook.com/frostpllc.
 


 
PAACO Certifies FACTA Animal Welfare Audit Program For Pork
 
The Professional Animal Auditor Certification Organization, Inc. (PAACO) has granted Certified Audit status to FACTA’s Certified™ Animal Welfare Audit Program – Pork. The FACTA audit is one the first to be certified for swine production.
 
Click here to download and read the news release