If you have an Individual Taxpayer Identification Number (ITIN) rather than a Social Security number (SSN) you may need to take action or you will be unable to file a tax return for 2017.
What You Need to Know About ITINs
ITINs are identification numbers issued by the U.S. government for individuals who do not qualify to receive an SSN. An ITIN can be used to file tax returns. In addition, it is also a form of identification often required by banks, insurance companies and other institutions.
Unfortunately, ITINs are also a source of identity fraud. To combat this, the 2015 PATH Act made substantial changes to the program. Now a number of ITINs will expire if not renewed by December 31, 2017.
No ITIN, no problem.
If you do not have an ITIN, but have an SSN, this expiration does not affect you.
No tax return in past three years. ITINs that have not been used when filing a tax return at least once in the past three years will automatically expire on December 31, 2017.
ITIN Middle Digits of 70, 71, 72 and 80 also Expire.
The new law creates a rolling expiration date for all issued ITINs. The key number to look for is in this position: 9xx-XX-xxxx. If your ITIN has any of those numbers, you will need to renew it. Additionally, last year the middle digits of 78 and 79 expired.
Renew Your ITIN Now
Don’t wait until the last minute and then discover your tax return has been rejected and your refund is delayed because of an expired ITIN. To renew, fill out Form W-7 with the required support documents.
To learn more, visit the ITIN information page on the IRS website.
Business Tax: Time to Consider Section 179?
Section 179 expensing can be a very powerful tax-planning tool for small and medium-sized businesses acquiring capital assets. While it doesn’t change the amount of depreciation you can take over the life of a capital purchase, it can change the timing by allowing you to deduct your purchase in the first year you place it in service.
Review these details if you’re considering depreciating your business assets under Section 179:
- Section 179 allows deducting the expense of up to $510,000 of qualified business purchases.
- A Section 179 deduction cannot create a loss for the business.
- A Section 179 deduction must be for business use. If an asset is not entirely used for business,
the allowance is reduced.
- If you sell a Section 179 asset prior to the full depreciation period, you will have to record any
sales proceeds as taxable income.
- Many states limit the use of this federal shifting of depreciation.
In conclusion, taking Section 179 for capital purchases can be useful. However, it’s not for everyone. Using it for an immediate tax break means it’ll no longer be available for future years.
This blog provides business, financial, and tax information to clients and friends of our firm. This general information should not be acted upon without first determining its application to your specific situation. For further details on any blog article on website, please contact us.