As we turn our attention to family, friends, and the holidays, it's easy to forget that the end of 2016 ushers in some of the most important tax deadlines to keep track of. While we here at The Motley Fool think such deadlines pale in comparison to the importance of spending time with the ones you love, we don't want you to miss the chance to take advantage of certain tax benefits.
With that in mind, here are the important dates to remember for the rest of the year, as well as deadlines that fall in 2017 but still reflect on your overall tax bill for this year.
December 15th: Don't forget to ensure that you're insured
For those of us who don't get healthcare from our employers, December 15th is the deadline for choosing a health insurance plan through the marketplace. Since the onset of the Affordable Care Act -- otherwise known as Obamacare -- all citizens are required to have some type of health insurance or face increasingly stiff penalties.
For 2017, the maximum penalty you could pay for not having coverage will be the higher of 2.5% of your household's gross adjusted income or a flat rate. That flat rate stood at $695 per adult and $347.50 per child -- to a maximum of $2,085 -- for the 2016 calendar year, but it will be adjusted upwards to keep pace with inflation.
But before you panic about being able to afford the premiums that you no doubt have heard are going up on the healthcare marketplace, remember that the vast majority of applicants will get some form of federal assistance to pay for their coverage.
December 31st: Clear all those trades in time
For investors who are looking to maximize the tax efficiency of their (primarily non-retirement) investment accounts, all trades need to be completed before December 31st.
There are two ways to approach this. On one hand, you can practice something called "tax loss harvesting". To do this, you sell losing investments, and buy stocks or funds that -- while not exactly the same -- offer the same exposure to different industries. These losses, especially if they were for positions that you held for more than one year, can help significantly lower your tax basis for the year.
On the other hand, you could lock in gains on stocks that you have held for more than a year without having to pay a dime in capital gains taxes. I've written extensively about this before, but the elevator pitch goes like this: if your household income puts you in the 10% or 15% tax bracket, you pay nothing in capital gains taxes. Using this strategy can help raise your overall tax basis, and allow you to avoid paying taxes on your winners.
January 15, 2017: Attention self-employed persons, don't forget about your last payment
Individuals who are self-employed or freelancers don't have the benefit of their employer taking taxes out of each paycheck. Instead, they need to put money aside and pay quarterly taxes to cover their portion of FICA and income taxes.
For the fourth quarter of 2016, those payments are due on January 15th -- so don't forget to have them postmarked by this date. And don't forget to make those payments to your state of residence as well!
April 18,2017: Tax day arrives
Some people dread it; others enjoy knowing that a refund is waiting for them. No matter how you approach tax day, it's undeniably important. This is the day that you need to have your taxes turned in to both federal and state authorities or file for an extension. It's not on its traditional day because April 15 falls on a Saturday, and April 17 is the observed Emancipation Day holiday in the District of Columbia.
But that's not it. You can take stock of where you stand financially, and also make the decision to retroactively contribute to a Traditional IRA, Roth IRA, Education Savings Account (Coverdell), or a Health Savings Account for the 2016 tax year. Each type of account has its own benefits -- click each link to read more about each one.
Now that you have all the dates, be sure to dot all of your i's and cross all of your t's, and get back to enjoying your time with the ones you love.