January 26, 2018 Industry News

Tax News: January 26, 2018

Dear Clients and Friends,
Here are a few important topics we thought you’d like to know about:
January 31, 2018 Deadline for W-2s and 1099s
Reminder – Forms W-2 and 1099-MISC are due January 31, 2018, including the filing of the government copies. These forms must be filed electronically with both the federal and state governments, regardless of the number of forms filed.  Oregon forms can be filed online using the Oregon Department of Revenue’s iWire system.
529 Plan Changes
The recent tax reform package includes new rules for 529 plans which are effective as of January 1, 2018.  Generally, up to $10,000 per beneficiary per year can be withdrawn tax-free from a 529 plan to pay selected costs attributable to attendance at a private or religious K-12 school. You will still need to determine whether or not your state conforms with the new expanded definition of “qualified education expenses” under the new law (Oregon does conform). The deduction for Oregon 529 plan account contributions is increased to $4,660 for joint filers ($2,330 for all others) for 2017.  Amounts contributed in excess of the deduction limit may be carried forward for up to four succeeding tax years.  Contributions deductible on your 2017 Oregon tax return must be made prior to filing your 2017 state tax return or April 17, 2018, whichever comes first.
Oregon Kicker
The Oregon surplus credit (“kicker”) is claimed as a credit on your 2017 tax return and is equal to 5.6% of your 2016 Oregon tax before all credits other than the credit for taxes paid to another state. You must file a 2017 return to claim the kicker even if you are not otherwise required to file.
Transit Tax New in 2018
Oregon’s new transit tax goes into effect beginning July 1, 2018. The rate is .1% of gross wages and retirement distributions received by Oregon residents (including wages received for services performed in Oregon by a nonresident). Retirement income paid from an Oregon source to nonresidents is not included. The tax is withheld at the source by your employer or retirement plan administrator. Residents working outside Oregon for employers who do not withhold are required to self-report. This is not a tax on the employer and does not apply to self-employment income.
As always, we are here to help. Please let us know if you have any questions about the above or about your tax situation in general.
Zirkle, Long & Associates, LLC