Blurbs for Your Client Newsletter, Blog or Website
The short articles below cover various tax planning topics to include in your communications to
remind clients of key issues that affect them and encourage them to contact their CPA. Also
included are general messages to reinforce your unique value as a CPA.
Please let us know if you find these useful – we’d love to know how they helped your client
communications efforts and if there are additional topics you would like to see included.
TABLE OF CONTENTS
Key Topics: Health Care
Tax Identity Theft
Seasonal/Time Sensitive
Business Tax Compliance and Planning
Individual Tax Compliance
Year Round Tax & Financial Planning
CPA/Firm Value
KEY TOPICS
An End to Penalties for Small Business HRAs
Health reimbursement arrangements (HRAs) enable small businesses to contribute to employee health
care expenses, including premiums, deductibles and other out-of-pocket costs. Unfortunately, up until
now, employers with HRAs have faced the threat of potential hefty penalties of up to $36,500 per
employee per year because the arrangements violate the rules for group health plans under the Affordable
Care Act.
The law exempts qualified small employer HRAs as long as the employer is not already subject to the
ACA’s employer mandate and doesn’t offer an employee group health plan. Qualifying HRAs must also
be funded only by an eligible employer and reimburse medical expenses that don’t exceed $4,950 a year
© 2016 American Institute of Certified Public Accountants. All rights reserved.
($10,000 for families). HRAs can help small companies attract and retain great people because they
demonstrate their commitment to employees. If you would like more information about HRAs or other
health care coverage options for your business, be sure to contact us today.
Many Popular Tax Rules Now Permanent
Frequent revisions in tax laws can make planning tough. Fortunately, a law passed late in 2015 changed a
number of popular tax provisions from temporary to permanent. One is the American Opportunity Tax
Credit, which provides a dollar-for-dollar credit of some qualified tuition and related expenses. Another is
a deduction for college tuition. The rule that allows you to deduct state and local sales taxes is also now
permanent, as is a deduction of up to $250 in unreimbursed classroom expenses for elementary and
secondary school administrators and teachers. People over age 70½ who must take required minimum
distributions from their IRAs can now depend on being able to use that money to make qualified
charitable contributions if they choose—and avoid tax on the distribution. These are just a few examples
of the provisions that were made permanent.
What’s the status of the tax rules that have the most important impact on your return? And which taxsaving opportunities are you missing? We can help you answer these and any other questions you have
about your tax situation. Contact our office today for personalized advice and information.
New Due Dates Could Ease Partnership Frustrations in 2017 Filing Season
Have you been frustrated in the past due to complications in finalizing your return because scattered filing
dates made it difficult to gather the information you needed when you needed it? In earlier tax years, that
was particularly true for individuals or organizations that were partners in partnerships or other “passthrough entities.” There should be relief in the coming tax season, however, because of new federal
legislation that better aligns due dates. In addition, many states have changed their return filing due dates
so that they coincide with federal filing dates. For example, Schedule K-1s must now be filed by March
15 (or September 15 for extensions), but other forms are also affected. The new dates can make it easier
to include information reported on a K-1 in a personal or business return.
These changes were long advocated by the accounting profession, because we’re always looking out for
the best interests of our clients and the public. Be sure to contact us with any questions on what the new
dates might mean for your return or about any of your financial concerns.
Brexit, and Dealing with Uncertainty
Did Brexit affect your investments? Global markets lost a total of $3 trillion in the two days
following the United Kingdom’s vote to leave the European Union, in a move popularly known
as “Brexit.” U.S. markets alone lost $1.3 trillion in the immediate aftermath of the decision.
Markets here began to recover quickly, but many investors were shaken by watching the value of
their retirement and other accounts plunge, even temporarily.
If market hiccups leave you uncertain about your financial planning choices, we can help. All
good financial plans take a variety of factors into account, including how much risk you’re
© 2016 American Institute of Certified Public Accountants. All rights reserved.
willing to tolerate and the purpose of your investments. When you have questions about your
investment choices, we can offer guidance and perspective. We can also work with you to begin
or update your college, retirement or estate planning. Be sure to contact our office today to set up
an appointment that can help get your planning on the right course.
Avoid Penalties on Business Healthcare Plan Compliance
If your company has fewer than 50 full-time employees and you still use a healthcare
arrangement (HRA), that reimburses staff for their medical insurance premiums, either pre-tax or
after-tax, you could be subject to a penalty of $100 per day, per employee. If you believe you
could be subject to the excise tax, contact us today for advice that can help you avoid
unnecessary penalties. Call our office, as well, if your company is an S corporation and you have
questions about IRS relief related to those entities’ healthcare plans.
Should You Report Changes to the Health Insurance Marketplace?
Do you receive your health insurance coverage through the government’s Health Insurance
Marketplace? Many who do also qualify for a premium tax credit, which those with moderate
incomes can use to help pay for coverage. You can choose to get the credit immediately or to
receive it as a refund later when you file your tax return.
Taking the credit up front can help you defray the costs of coverage, but remember that the
amount you’re eligible for may be affected by changes in your circumstances during the year.
You may end up qualifying for a higher or lower credit depending on changes in your income or
the size of your family, so it’s important to report those changes to the Marketplace when they
occur. If you have questions about the tax consequences of your health insurance plan or any
other tax-related issues, please contact our office today.
Health Care Premium Tax Credit: Penalty Warning
Do you purchase health care coverage through the Health Insurance Marketplace? If you do, you
may have taken advantage of the premium tax credit that helps cover your payments. The credit
can be used when your tax return is filed or it can be used to lower your monthly health care
payments. If you chose the advance credit last year and had a change in circumstances, such as a
promotion or a new job, that has raised your income, you may no longer be eligible for some or
all of that credit and may be subject to a penalty.
Do You Qualify for the Health Care Premium Tax Credit?
© 2016 American Institute of Certified Public Accountants. All rights reserved.
Individuals and families can buy private health insurance through affordable insurance
exchanges, which are marketplaces where individuals can shop for private health insurance. If
you purchase health insurance through an exchange, you may be eligible for a tax credit that will
make your coverage more affordable.
The credit is aimed at middle-income individuals and families. A larger credit is available for
older individuals whose coverage costs may be higher. The credit will be refundable, which
means it can be used by people who pay little or no federal income tax. You can also arrange for
the credit to be paid to your insurer in advance so that you have little or no out-of-pocket costs
for your healthcare premiums. Are you eligible for the credit? We can help you find out and
work with you to make the best use of your health insurance dollars. Call us today with all your
questions about health care or any other tax or financial concerns.
Stop Tax Identity Theft in Its Tracks
Imagine after sending in your annual tax return, you receive a notice from the Internal Revenue
Service saying that another return has already been filed using your name and Social Security
number—and claiming a refund. Sound impossible? It can happen if you become one of a
growing number of victims of tax return identity theft. According to one estimate, tax-related
identity theft cases have soared more than 650% since 2008. At the least, this crime can lead to a
delay in your refund, but the consequences may be much more serious. In addition, you may face
a larger problem with identify theft if the scammer is also running up credit card debt or taking
out loans in your name.
To avoid becoming a victim, we recommend steps such as safeguarding your Social Security
number and other financial information, keeping an eye on changes to your credit ratings and
taking precautions with electronic transfers of confidential information. Be sure to contact us if
you believe you have been a victim of identity theft or would like advice on the best ways to
secure your financial information.
Beware of Tax Scams!
Did you know that con artists posing as Internal Revenue Service representatives frequently try
to scam people out of their money? While this is a long-standing problem, the IRS has issued a
new warning against thieves who may contact people on the phone or via email or a letter and try
to trick them into divulging personal financial information, such as their Social Security or bank
account numbers, or sending cash. And the scams can be tough to spot. Potential victims may see
a fake caller ID that identifies the call as coming from the IRS or receive mail or email that
© 2016 American Institute of Certified Public Accountants. All rights reserved.
appears to have the IRS letterhead or one like this that resembles the IRS website. The scammers
typically try to intimidate victims into acting quickly—by, say, sending a payment to what they
claim is an IRS address—by threatening arrest or some other consequence.
If you receive an IRS communication that seems suspicious or doesn’t make sense, please call
our office. Whether you are facing a legitimate tax issue or a scam, we can help you sort through
the details and determine how to respond. You can report incidents to the Treasury Inspector
General for Tax Administration at 800-366-4484 or online. Remember, too, that the IRS website
is www.irs.gov, so be on alert if you’re directed to another similar site that ends in .com or .net
instead of .gov.
SEASONAL/TIME SENSITIVE
Welcome Tax Relief for Combat-Injured Veterans
When someone leaves the armed services due to a combat-related injury, the severance payments they
receive are not supposed to be included in their gross taxable income. Tax on many of these payments has
been incorrectly withheld in the past, but a new law now seeks to restore that money to veterans. The
Combat-Injured Veterans Tax Fairness Act of 2016 allows veterans to file amended returns for improper
withholding going back to 1991, when the errors first began to occur. The usual three-year limit for filing
an amended return does not apply in this case.
The Defense Department will notify affected veterans about the amount that was improperly withheld
from their payments. Veterans will then have one year after their notification to file their amended
returns, so please contact us immediately if you or a family member may qualify for tax relief under this
new law.
Avoid Refund Delays!
Many people dread tax time, but it can be even more frustrating if you have to wait longer than you’d
hoped for your refund. Unfortunately, the Internal Revenue Service is warning that patience may be
necessary this year. For one thing, identity theft and tax refund scams have become significant concerns,
so the Service is taking extra measures to spot fraudulent returns. The IRS is also required to hold refunds
for returns claiming the Earned Income Tax Credit and the Additional Child Tax Credit until midFebruary.
You can help prevent any additional delays by ensuring that you’re ready with all the necessary
documents to file your return, including Forms W-2 and 1099 reporting your income, and all the required
receipts and other paperwork to ensure you qualify for your deductions or credits. Contact our office
today with any concerns you may have about preparing to file your return. We can offer personalized
answers to all your financial questions.
© 2016 American Institute of Certified Public Accountants. All rights reserved.
Get Your RMDs Before It’s Too Late!
Have you taken the required minimum distribution (RMD) from your individual retirement
arrangement or workplace pension plan? That’s an important question, because failure to take
your RMD on time could result in a stiff penalty of 50% of the amount you should have
withdrawn (plus the income tax on the distribution).
In general, those who are over age 70½ must take at least a minimum payment from their
retirement account each year by December 31. (A bonus for first-timers: You have until April 1
of the year following the one in which you turn 70½ to take the RMD.) One exception to the
rule is if you have a Roth IRA, which is not subject to an RMD during the account owner’s
lifetime. Each taxpayer’s RMD is based on the amount in their retirement accounts and their life
expectancy. You can always take more than your RMD, but your withdrawals are included in
your taxable income. Whether you’re planning for retirement or already enjoying it, we can help
you determine or update what your RMD will be, decide how much income you will need each
year and plan ways to minimize your tax bite. Please contact us with all your tax concerns.
(Thanksgiving) Thanks for Being a Part of Our Firm’s Family!
At this time of year, we sit down with our families to acknowledge all the many things that have
made us thankful throughout the year. Since we consider you a member of our firm’s family, we
want to take the chance to express our gratitude to you for giving us the opportunity to serve you.
We get a great deal of satisfaction from working with clients, whether we’re helping you identify
tax-saving opportunities, plan for college or retirement, address critical business concerns or
tackle any number of other financial issues. So please accept our sincere thanks for your
business! We look forward to continuing our valued relationship with you in the coming year.
Please remember that we’re always here to help when you need us.
Plan Now to Save on Taxes Later
Even though tax filing time is far away, the fall is the perfect time to start your planning so you
can take advantage of all opportunities to minimize your tax bill. That begins with ensuring
you’ve taken all the deductions that can help reduce your taxable income. Have you maxed out
retirement plan contributions, for example? Set aside money for 529 college savings plans or
health savings accounts? Considered which charitable donations you want to make before year’s
end? Those are just a few of options that might help cut your taxes.
At the same time, since tax rates for high-income taxpayers have risen in recent years, it’s also
smart to investigate ways to lower the income you report this year and to avoid generating
passive income. With only a few months left in the year, contact our offices today for advice on
steps you can take now that will pay off on April 15.
© 2016 American Institute of Certified Public Accountants. All rights reserved.
Stamp Out Tax Season Stress!
Are you ready for tax time? There are a couple of steps you can take now to alleviate some of the
stress of filing your return. Plan to get organized early. Begin by putting together a tax folder
with W-2s from your employer, 1099s for other income you may have earned, bank and other
financial statements and receipts for things like medical bills and charitable donations. A helpful
video from the American Institute of CPAs offers more information on the best ways to get ready
now and throughout the year.
Once you’ve gathered all your important paperwork, this is a good time to meet with your CPA
to talk about changes in your financial situation or in tax laws that may have an effect on your
return. Having this discussion early is key to avoiding surprises at tax time and a great time to
get started on planning that can potentially minimize your tax bite and strengthen your financial
situation. Call us today!
Documenting Your Charitable Donations
Many people make donations to charities whose work they support, but if you are planning to
take a tax deduction for your gift, you must have the proper paperwork. Assembling the right
documentation can also be tricky because the requirements vary based on whether the donation is
cash and on the value of your gift. If you donate less than $250 in cash, for example, a canceled
check, credit card statement or similar record may be sufficient, but if you give more, you will
need a written acknowledgement from the charity. An additional tax form—and possibly an
appraisal—may be needed for non-cash donations, depending on their value. Of course, the
organization itself must also qualify as a charity under IRS rules.
We can offer advice that will make it possible for you to fund the causes you believe in
and qualify for the deductions you deserve. We can also help you incorporate charitable giving
into your long-term tax and estate planning. Be sure to contact us with all of your questions on
charitable giving or any other financial concern.
BUSINESS COMPLIANCE AND PLANNING
New Rules in Bonus Depreciation: Does Your Business Qualify?
Have you made building improvements recently or are you planning any in the near term? Then you may
qualify to take advantage of new rules for “qualified improvement property.” This category is broader
than the former “qualified leasehold improvement property” category. Businesses may now be eligible to
© 2016 American Institute of Certified Public Accountants. All rights reserved.
use bonus depreciation for improvements to the interiors of nonresidential real property made after the
building was placed in service. There are limitations, but we can help you determine which property or
improvements will or won’t qualify.
Businesses with qualifying improvements can receive a 50% depreciation deduction of the adjusted basis
of qualifying property in the first year it’s placed in service in 2015, 2016 or 2017, followed by lower
percentages for 2018 and 2019. If you’ve made building improvements that might be eligible, be sure to
contact our office today for more details.
Are You Aware of New Tax Rules for Partnerships?
If your business is a partnership, new audit and adjustment rules passed by Congress have significantly
increased the chances that it could be audited. Your partnership operating agreement should be reviewed
and possibly revised to address the rules and the new tax terms and concepts that they introduce. It is
possible for some partnerships to opt out of the rules’ provisions, but careful consideration should be
given to this decision and to other concerns.
While the rules generally apply to returns filed after 2018, we recommend that you begin planning now to
prevent any unexpected consequences when they do become effective. We urge you to contact us today
for more information on how the new rules might apply to your business and what steps you should take
to address them.
IRS Reaching Out Sooner on Payroll Tax Concerns
If your business falls behind in paying its payroll taxes, you may be contacted sooner rather than
later by an Internal Revenue Service revenue officer. This may even be the case if you are using
a third-party payroll service or if the deposits you are making have simply decreased over time.
The contacts, which may include visits to your business, are part of the IRS Federal Tax Deposit
Alert process, which aims to spot payroll tax problems before they become insurmountable—and
incur significant interest and penalties.
If you do receive an IRS contact, be sure to get in touch with our office. We can help you
understand what prompted the contact, explain your possible responses and work with you in
your communications with the IRS. No matter what tax issues you’re facing, be sure to turn to us
for the advice you need.
Relief from a Tax Penalty You May Not Have Even Known About!
Did you know that small businesses that fail to file their annual retirement plan returns can face
hefty fines of up to $15,000 per return? Fortunately, the Internal Revenue Service recognizes that
some businesses may not even realize that this requirement applies to them. As a result, a tax
penalty relief program allows them to pay $500 per return for late filings, up to a maximum of
$1,500. The relief is aimed at small businesses whose plans cover a 100% owner or partners in a
© 2016 American Institute of Certified Public Accountants. All rights reserved.
business partnership, and their spouses. The U.S. Department of Labor also has a relief program
for businesses that have employees.
If you’re not sure whether the requirements—or the relief programs—apply to you, be sure to
contact us. We can offer advice on how to remain in compliance with critical regulations and
minimize your tax outlays.
Ensuring a Smooth Family Business Transition
You spend years building a family business, but when it’s time to turn it over to the next
generation there can be squabbles over company value and succession that cause turmoil, while
gift and estate taxes eat away at company coffers. As the baby boomers head into retirement,
they are expected to hand over control of companies worth trillions of dollars in the aggregate. A
significant number of those businesses may not be prepared for a smooth transition into new
ownership or a second generation of leadership, are you? We can help ensure that the transfer
goes smoothly and create a plan that helps minimize related taxes and enhance your retirement
nest egg. Every day, our experts offer customized advice to companies like yours. Contact our
office today for more information and insights on all your family business concerns.
What Do the Tangible Property Rules Mean to You?
Businesses often wrestle with understanding what items should be deducted versus what should
be expensed. That task got a little more complicated this year when the Internal Revenue Service
finalized new tangible property rules. They affect every business that has tangible property
(buildings, machinery, equipment, furniture, vehicles, etc…) so they’re pretty far reaching. And
they add a new layer of complexity to your tax planning.
We can help you address the new requirements, which may include determining whether you
need to complete additional paperwork to request a change in accounting method. Be sure to
contact us to learn about handling this and any other tax law changes that may affect your
business.
Wish You Had a Coach for Your New or Growing Business? We Can Help.
Are you launching a business or product line? You may have relied on us for years for timely
and personalized tax advice, but you may not be aware that we help business owners start and
expand their companies every day with several types of services. In fact, we frequently serve as a
business coach or mentor for owners seeking help in their strategic planning, setting up payroll
or other systems or selecting the best accounting software, among other projects. Due to our
© 2016 American Institute of Certified Public Accountants. All rights reserved.
extensive contacts in the community, we can also recommend attorneys and bankers to work
with your business.
We’ve seen the many kinds of challenges they face and we know how to implement the right
solutions. And we’re business owners ourselves! Be sure to contact us to learn more about how
we can help you achieve your business goals.
Is a Like-Kind Exchange a Good Option for Your Business?
Normally, when companies sell properties, they must pay taxes on any gain they receive. Likekind exchanges, transactions in which companies trade properties, may be carried out without
any immediate tax consequences. They must satisfy IRS rules, however, which include:
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The properties must have the same “nature or character,” as set forth in IRS
guidance.
The exchanges can be business or investment properties put to a productive use.
The exchanges can’t involve inventory, most securities and some other assets.
Taxes must be paid on any cash or non-similar property that is part of the deal.
Keep in mind that like-kind exchanges are tax-deferred transactions, not tax free. When a
company eventually sells the property it received in an exchange, it must pay tax on any
gain from its original investment. In the meantime, though, the business/company can use
the funds it would have paid in taxes and it has acquired a new property that may better
suit its needs without necessarily making a cash outlay.
Want more information about whether like-kind exchanges can be a good strategy for your
business and insights on their tax impact? We can help. Contact us today for expert advice on
the best ways to address your business and tax concerns.
A Simplified Home Office Deduction
Do you work at home or have a home-based business? If so, you should be aware that the IRS
has created a simpler option for calculating the deduction for the business use of your home. The
new option makes recordkeeping easier because, instead of maintaining records of specific home
office expenses, you can use a standard rate per square foot. The rate is $5 per square foot (up to
a maximum of 300 sq. feet or $1,500) for qualifying business use space in place of taking a pro
rata percentage of items such as mortgage interest, taxes and repairs.
Keep in mind there are good and bad aspects to this “simpler” method. The new method gives
you back your full interest and tax deduction on schedule A, but you will lose your depreciation
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and loss carryover deductions. Of course, you must still use your home office regularly and
exclusively for business. This may be a welcome relief for some taxpayers, but it might not be
the best choice for others. Is it the right choice for you? Please contact us for answers to all your
financial questions.
How Do Changing Policies for Same-Sex Couples Affect Your Company?
This year’s U.S. Supreme Court ruling legalized same-sex marriage nationwide, which means
that you may need to review your benefits and other policies to be sure they comply with current
laws and regulations. For example, spousal benefits, such as health insurance coverage, generally
must be extended to same-sex couples. In addition, federal regulations now require that
employees in same-sex marriages must also be given leave to care for a spouse under the Family
Medical Leave Act.
These are just a few of the issues you should consider in light of the ruling. Please contact our
office for advice on issues related to same-sex marriage, employee policies or benefits — or with
any other business concerns.
INDIVIDUAL TAX COMPLIANCE
International Tax Planning Questions? We Can Help
Tax planning is complicated, and that’s especially true for taxpayers who are citizens of one country
while living and working in another. If you’re a U.S. citizen living abroad, your income, no matter the
source, is generally taxable in the United States. Citizens, resident aliens or military members living in
another country have an extra two months to file their taxes without filing an extension. There are also
special tax considerations for members of the military in combat zones, for example, and for military
families. Foreign citizens who don’t have green cards and who don’t spend a substantial amount of time
in the U.S. (based on the Internal Revenue Service guidelines) are considered nonresident aliens and are
also required to pay U.S. taxes on any income earned in the United States.
If you need help sorting through the complexities of international taxation, contact our office. We can
help you understand where you stand and address any other financial issues related to international living.
Higher Income Limits for Some Retirement Plans: Are You Affected?
Changes in the rules affecting some retirement plans will have an impact on whether certain taxpayers can
take advantage of these savings options. First, let’s talk about what remains the same. The tax-deferred
contributions that you can make to your traditional individual retirement account 2017 are still $5,500,
plus another $1,000 if you’re 50 or over. If you or your spouse are covered by an employer’s retirement
plan, the size of your income may limit your ability to deduct the entire contribution. For 2017, those
© 2016 American Institute of Certified Public Accountants. All rights reserved.
income limits have risen for traditional IRAs for both single people and married couples filing jointly.
The income limits for contributing to a Roth IRA also rose.
Contributions to tax-advantaged
retirement plans can help you lower your tax bill and build wealth for a secure future, so we encourage
our clients to make the most of them. Please contact our office for further information on the new
contribution limits and for personalized advice on all your retirement savings choices.
Higher 2017 HSA Contribution Limits for Individuals
Do you contribute to a health savings account, or HSA, to help you cover your medical expenses?
Taxpayers are allowed to make tax-deductible contributions to HSAs if they have health plans that have
high deductibles, based on Internal Revenue Service guidelines. If you have an HSA, you’ll be happy to
hear that the annual deductible contribution limit certain coverage has been raised for 2017. For
individuals (with self-only coverage), it will be increased by $50 from 2016 to $3,400. The limit for
family coverage will be unchanged at $6,750.
If you’re uncertain whether you are eligible for an HSA, or how these plans can fit into your overall
financial and tax planning strategy, be sure to call our office today. We can explain your options and offer
the advice you need to make smart financial decisions.
An Important Financial Planning Update for Same-Sex Couples
The Supreme Court’s ruling in Obergefell v. Hodges, which made same-sex marriage legal in all
50 states, had a significant impact on financial planning for these couples. Decisions related to
taxes, retirement and estate planning, healthcare plans and home purchases could all be affected.
The ruling certainly simplifies many considerations, since couples no longer potentially have to
work around a variety of different laws based on where they were married and where they live.
Couples living in states who previously did not recognize their marriages no longer have to file
one joint federal tax return and two individual state returns, for example. They also have access
to Social Security spousal and survivor benefits and can inherit property from their spouse
without paying state estate taxes.
These are just a few of the changes in the financial planning landscape for same-sex couples. If
you want to learn more about what the ruling means to you—and about the planning steps that
can help you build a strong financial foundation—be sure to contact us.
Managing the Tax Effects of Divorce or Separation
What impact can a divorce or legal separation have on your tax situation? You may be surprised
to learn about the many areas that these major life events can impact, including your taxes. You
will have to reconsider your filing status, for one thing, and perhaps even your withholding may
need to be adjusted. In your planning, you should be aware that qualifying alimony payments
that you make may be deductible, but child support is not. (Along the same lines, you may have
© 2016 American Institute of Certified Public Accountants. All rights reserved.
to report alimony, but not child support you receive as taxable income.)
If you have children, the question of which parent can claim deductions, childcare and education
credits and the many other items related to dependents needs to be resolved. In addition, you will
have to address potential changes in your health insurance premium tax credit allocation or any
loss of your health care coverage due to divorce.
Tax concerns aren’t at the top of anyone’s agenda when they’re dealing with a divorce or
separation, but we can offer personalized advice that will help minimize the stress of dealing
with tax issues in the midst of significant change. Be sure to call our office with all your
questions on the tax effects of divorce or separation.
Tips for Spouses Coordinating Social Security Benefits
As the large Baby Boom generation ages, roughly 10,000 Americans are celebrating their 65th birthday
every day, according to the Pew Research Center. If you are heading toward retirement, you may be
trying to determine the best time to begin taking your Social Security benefits. That’s an important
decision, because it can have a significant impact on the amount that you’ll receive, now and through the
rest of your retirement years. Retiring before you reach full retirement age could reduce your benefit by as
much as 30%, but you can also raise your benefit by as much as 8% for every year you stay on the job
until age 70.
Add into your planning the fact that there are strategies that spouses can use enhance the benefit amounts
they receive over time. One spouse may decide to file sooner or later, for example, based on both
spouses’ lifetime earnings history and health situation. Or, depending on how you coordinate your
retirement planning, one spouse might start taking a spousal benefit based on the other’s earnings before
reaching full retirement age. There are several options for maximizing your benefits—and some pitfalls
you should avoid. If you’re facing this decision, contact us for personalized expert advice.
Location, Location, Location: Tax Rules for those in the Military
If you’re in the armed forces, location can be an important factor in your tax planning. For
example, military pay for months in which you serve in a designated combat zone is not taxable.
That’s true for those who are enlisted or are warrant officers, but there are limits on the exclusion
for commissioned officers. The exclusion can also apply for those who are hospitalized while
serving in a combat zone. And if your employer pays military differential pay—an amount that
covers the difference between your military pay and your regular salary—while you are in a
combat zone, it is reported as regular income, but it is not subject to Social Security and
Medicare taxes.
© 2016 American Institute of Certified Public Accountants. All rights reserved.
Location can also make a difference when armed forces reservists travel more than 100 miles for
home for reserve service. In those cases, their transportation, meals and lodging expenses can be
deducted from their taxable income. These are just a few of the special tax rules and
considerations for those serving in the military. If you or a family member are in the service and
have questions about tax or other financial concerns, please call our office.
Can You Relate to the Brady Bunch? Let Us Help You with Stepfamily Financial
Challenges
Did you know that stepfamilies are the fastest-growing type of family in the United States? In
fact, more than 40% of U.S. marriages are remarriages for at least one partner, according to the
National Stepfamily Resource Center. While many families happily blend together, combining
old and new traditions and interests, there can be financial complications when two households
become one.
That may include tackling questions about how the family’s money will be spent or how child
support payments and contributions to college savings are handled. Writing a will that addresses
everyone’s best interests is another important task. Our firm works with blended families,
offering financial advice and helping them craft college funding and estate strategies or other
financial plans that meet their unique needs. Whatever your family’s concerns, be sure to contact
us for expert assistance.
Don’t Let Taxes Disrupt Your Retirement Plans!
Many people carefully plan ahead for retirement, setting up tax-advantaged savings accounts and
deciding on the best place to live. They may be surprised, then, to learn about the many tax
issues that apply to retirees, all of which should be taken into account in their planning. That can
include taxes on distributions from retirement or investment accounts, required minimum
distributions from some retirement nest eggs and potential taxes on Social Security payments.
Many fail to consider state and local income, sales or property taxes—as well as state taxes on
retirement benefits and estates.
The good news is that it’s possible to anticipate and reduce some of the complications that taxes
can cause in retirement. If you’re not certain how to get started, be sure to call our office. We can
provide the advice you need to build a foundation for a secure retirement.
© 2016 American Institute of Certified Public Accountants. All rights reserved.
Statute of Limitations on Back Taxes
If you owe back taxes, how long does the IRS have to assess and collect them? The answer
varies based on the situation. In many cases, the IRS has three years from the date a return was
due or when it was filed, whichever comes later, to assess how much you owe, and up to 10
years to collect that amount. When a very large item is omitted from the return, the assessment
period can last up to six years. However, if fraud or attempted tax evasion is involved or if a
return was never filed, then there is no statute of limitations on how long the IRS can take to
make an assessment.
If you haven’t paid taxes or filed a return, we can assist you in fixing the problem. We can
prepare your returns and help you address any outstanding tax concerns. We can also work with
you to tackle broader financial or other issues that you may be facing. Reach out to us today for
more information.
1099 Trouble? We Can Help
It’s not unusual for taxpayers to be surprised—and perhaps more than a little confused—by some
of the correspondence that is received from the IRS. Here’s a case in point: Many taxpayers have
been puzzled by notices they have received related to 1099 forms. For example, problems have
arisen in the past surrounding notices related to Forms 1099-K (Payment Card and Third Party
Network Transactions) and 1099-C (Cancellation of Debt). Those who received the notices were
frequently uncertain what they meant and how they were expected to respond.
If you have received one of these notices—or any other letter—from the IRS, be sure to contact
us. The Service may simply need more information, have additional tax liability or are due a
refund. No matter what the situation, we can help you understand the problem and work with you
to resolve it.
Yes, You Can Appeal an IRS Decision!
If you disagree with an IRS decision about your taxes, rest assured that you’re not alone. The
IRS has an Office of Appeals that works with more than 100,000 taxpayers every year to address
their tax issues. If you’re facing a tax dispute, the first step we recommend is that you call our
office. We can help you evaluate your claim, review your options and work with you throughout
any appeal.
The IRS appeals process is free and designed to arrive at an objective resolution to your dispute.
If you decide to file an appeal, it would involve an in-person or phone conference or thorough
© 2016 American Institute of Certified Public Accountants. All rights reserved.
correspondence with an employee of the independent appeals organization. We can help you
prepare your appeal and participate in an appeals conference with you. We offer knowledgeable
advice on all your tax concerns, so be sure to contact us with all your questions.
Know Your Rights as a Taxpayer
Internal Revenue Service audit. Those words would strike fear into the heart of any taxpayer, but
did you know that the IRS has adopted a Taxpayer Bill of Rights that spells out the rules
protecting people and businesses in any dealings with the Service? The 10 provisions include the
right to challenge a position and be heard, to appeal an IRS decision in an independent forum and
to pay no more than the correct amount of tax.
You also have the right to retain representation. Remember that we can represent you before the
IRS any time you need help sorting through a tax-related problem. Not only can we help you
navigate complicated tax rules—and ensure that you’re complying with them—we can also
accompany you to meetings with IRS representatives or contact them directly to sort through any
issues. Be sure to contact us with all your tax questions and concerns.
What You Should Know about Changes in Education Provisions in the Tax Law
Are you making the most of tax benefits designed to offset some of the high costs of education?
The American Opportunity Tax Credit, extended through 2017, provides a tax break of up to
$2,500 for qualified college expenses. The Act also made permanent several education-related
tax options, including a $2,000 maximum contribution amount for Coverdell education savings
accounts, which can be used to pay certain elementary, secondary and post-secondary expenses.
Given the many changes, we can help you make sense of the benefits available to you and ensure
you’re taking full advantage of them. We can also offer advice on smart steps for financing the
high cost of education, so please contact our office with all your questions.
Don’t Be Taken in by Phony IRS Requests
The phone rings. The caller says they are from the Internal Revenue Service and they claim you
owe taxes and must submit payment through a wire transfer or prepaid debit card. Or you receive
an email supposedly from the IRS asking you to share your bank account, credit card or Social
Security number. What should you do?
The sad truth is that many scammers pretend to be IRS agents as part of identity theft or other
© 2016 American Institute of Certified Public Accountants. All rights reserved.
criminal activity. If you receive a surprising or suspicious communication purportedly from the
IRS, we would urge you to call us immediately. We can help you identify a bogus request for
information and work with you to respond to a legitimate IRS contact. You can also call the IRS
directly at 800-829-1040 to verify any communication you receive.
Got Foreign Assets? FBAR May Apply to You
Are you aware of the nature of all your investments, domestic and international? Do you know if
you have foreign accounts with an aggregate value higher than $10,000 at any time during the
calendar year? U.S. taxpayers (including individuals and business entities) are required to report
on foreign assets or investments they hold in offshore accounts. Under the Bank Secrecy Act,
you may be required to e-file what is known as the FBAR directly with the Financial Crimes
Enforcement Network (FinCEN), a bureau of the Treasury Department. Given the diversity of
assets that many people hold, we advise against assuming that the FBAR rules don’t apply to
you. If you’re not sure, we can help you determine the answers.
As is often the case with tax laws, there are some exceptions and intricacies to the FBAR rules,
so be sure to contact our office for more details. We can help you understand whether the rules
apply to you and what you need to do to comply with them.
Documenting Your Charitable Donations
Many people make donations to charities whose work they support, but if you are planning to
take a tax deduction for your gift, you must have the proper paperwork. Assembling the right
documentation can also be tricky because the requirements vary based on whether the donation is
cash and on the value of your gift. If you donate less than $250 in cash, for example, a canceled
check, credit card statement or similar record may be sufficient, but if you give more, you will
need a written acknowledgement from the charity. An additional tax form—and possibly an
appraisal—may be needed for non-cash donations, depending on their value. Of course, the
organization itself must also qualify as a charity under IRS rules.
We can offer advice that will make it possible for you to fund the causes you believe in and
qualify for the deductions you deserve. We can also help you incorporate charitable giving into
your long-term tax and estate planning. Be sure to contact us with all of your questions on
charitable giving or any other financial concern.
Seeking a Job? You May Be Able to Deduct the Expenses
Did you know that if you are trying to find work in your current occupation, the costs of your
© 2016 American Institute of Certified Public Accountants. All rights reserved.
search, including expenses for preparing and sending resumes, employment agency fees and
related travel expenses, should be deductible?
The deductions aren’t available in all cases. For example, you’re not eligible to use them if you
are seeking employment in a new field or if this will be your first job. If it’s been a long time
since you left your last job, your costs also may not qualify. Don’t try to navigate the rules on
your own. If you want to learn more about these deductions, or ask any questions about your tax
situation, contact us today.
Smart Disaster Planning Steps
Too often natural disasters strike and serve as reminders that it’s important for both individuals
and businesses to protect themselves against the potential financial consequences of such events.
A few smart steps we recommend include making electronic backups of important records,
including your insurance policies, tax returns, bank and credit card account information, and vital
records. It is critical that you store this backup in a separate location that will be easy to access if
your area suffers damage. You should also take the time to take pictures or videos of your home
or business and store them separately in case you need to make an insurance claim.
If you run a business, you must consider how you will get up and running again after a disaster.
It’s a good idea to develop contingency plans that will enable employees to work from home or
elsewhere if your location is damaged or inaccessible. Both businesses and families should
consider using phone trees or other methods to maintain contact in an emergency. Review your
contact and contingency plans every year to be sure they are up to date.
Want further advice on protecting your family’s or business’s financial well-being in case of a
disaster? We can help. Contact us today with all your financial questions.
YEAR-ROUND TAX & FINANCIAL PLANNING
Taking Charge of Your Parents’ Finances
There are many different warning signs indicating that an aging parent may be having trouble managing
money. Maybe you noticed a large pile of mail—including unpaid bills—the last time you visited or
perhaps they’ve mentioned that their money just doesn’t seem to go as far as it used to. Whether there’s a
clear red flag or just a nagging sense that something’s not right, there may come a point when you feel the
need to talk to your parents about their financial situation.
If you have concerns, or if you’ve decided it’s best to help them handle their finances, remember that we
can help, including working with you to determine where they stand financially, what might be causing
their financial challenges and what kind of budgeting and money management will keep them on course
© 2016 American Institute of Certified Public Accountants. All rights reserved.
in the future. We offer families advice on their financial concerns every day, so be sure to contact us for
expert advice that address your unique needs.
Get a Smart Start on Your Future
This is the time of year for graduations and weddings, both big shifts in anyone’s life. If you (or
someone close to you) are experiencing either of these milestones, it’s the perfect point to step
back and get a perspective on how this landmark can change your financial life. What’s some of
the best advice for anyone at this juncture? We recommend setting short- and long-term goals
and plotting out the steps that will help you reach them. Don’t make big decisions before
ensuring you can afford them and consider how they fit into longer-term goals. And if you
develop a habit of making budgets now, you’ll have a better chance of living within your means
and staying out of debt.
Everyone’s situation is unique, of course, which is why it’s a good idea to contact our office for
expert advice tailored to meet your specific needs or those of your loved ones. Call us today for
answers to all your financial questions.
Let Us Help You Leverage What You Can Learn from Your Tax Return
What does your tax return say about your financial situation? The fact is, the paperwork you file
each year offers excellent information about how you are managing your money—and about
areas where it might be wise to make changes in your financial habits. If you have questions
about your financial situation, remember that we can help. Our firm is made up of highly
qualified and educated professionals who work with clients like you all year long, serving as
trusted business advisors.
So whether you are concerned about budgeting; saving for college, retirement or another goal;
understanding your investments; cutting your tax bite; starting a business; or managing your
debt, you can turn to us for objective answers to all your tax and financial questions.
Student Loan Debt: We Can Provide the Decision-Making Details You Need
Did you know that the average student loan balance is $24,803? Student debt is taking a heavy
toll on borrowers, according to an American Institute of CPAs survey, which found that 75% of
respondents or their children had made personal or financial sacrifices because of monthly
student loan payments. Sacrifices included putting off saving for retirement (41%); delaying car
purchases (40%); postponing a home purchase (29%); and even waiting on marriage (15%).
Among the most troubling findings were that only 39% fully understood the burden that student
loan debt would place on their future and 60% had at least some regrets about their decisions on
© 2016 American Institute of Certified Public Accountants. All rights reserved.
financing their education. That’s why it’s always critical to understand the full potential impact
of all your financial choices. The good news is that your CPA can help. Contact us with all your
financial questions and we’ll provide the knowledge and insights you need to make the best
decisions for you.
Conquer Your Capital Gains Concerns!
Do you take your cost basis into account when it’s time to sell an asset or investment? When you
sell an asset or investment, your cost basis—or the amount you originally paid for it—is
subtracted from the sales price to determine your capital gain on the sale. If your last tax return
included some surprises on capital gains you incurred last year—and the related taxes—then
you’re probably aware of the need to plan ahead when buying or selling assets or investments.
It’s even more important in light of some recent tax law changes, including the new tax on net
investment income.
The good news is that we can help. Be sure to turn to us with questions about your overall
investment strategies, as well as the tax implications of asset and investment purchases or sales.
We can offer the advice you need to minimize your tax outlays and make the most of your
investments.
What Do You Need to Know about Estate Planning?
The good news: Those who are the beneficiaries of substantial estates will have to pay a little
less in taxes if they inherit this year. That’s because the Internal Revenue Service raised the
federal estate tax exemption in 2015, allowing very large estates to shelter $90,000 more from
taxes than they did last year.
The bad news: This is just one of the laws governing the taxation of estate and compliance can
be extremely complicated. There are higher tax rates for the income that estates and trusts earn,
for example, but simplified regulations when a surviving spouse asks for more time to take
advantage of beneficial tax rules. We strongly advise all of our clients—no matter what your
income level—to consider estate planning concerns. And we can help you cut through the related
tax law complexity. Contact our office today with all of your questions on estate planning or any
other financial issue.
Is Your Will Up To Date?
When was the last time you reviewed your will? People generally make wills to guarantee the
© 2016 American Institute of Certified Public Accountants. All rights reserved.
proper disposition of their money and property, which is why it’s a good idea to consult your
CPA when it’s time to create or update your will.
We recommend that you revisit your will every time you experience a major life event, such as
marriage, the birth of a child, retirement or other significant milestones. Even if there is no
meaningful change in your life, it’s smart to review the document every couple of years to ensure
it still addresses all your estate concerns and reflects your wishes. Changes in the value of your
investments—such as a stock portfolio or real estate—may also require adjustments in your
estate plans.
Reviewing your will may raise questions about various areas of your financial life, including
your retirement or estate planning, college savings or other financial concerns. Be sure to turn to
us for the perspective and advice you need to make the best choices.
DOMA Decision’s Impact on Financial Planning for Same-Sex Couples
If you are a member of a married same-sex couple, then the U.S. Supreme Court’s decision to
strike down the Defense of Marriage Act could have a substantial effect on many aspects of your
financial life. You may want to consider, for example, filing an amended income tax return if
you now qualify for deductions or credits available to married couples under federal law. Since
same-sex couples are now eligible for the estate tax exemption available to surviving spouses, it
may also be time to review your estate planning.
Those are just a few of the changes affecting qualifying same-sex couples. If you have questions
about the decision’s impact and what it means to your financial situation, be sure to contact us
today.
How Do Taxes Affect Your Financial Picture?
Do you know how much you’re paying in taxes? You may have a sense of what you spend on
income taxes, but have you also considered the taxes you pay on utilities, gasoline, cigarettes and
alcohol, hotel stays and numerous other items? The CPA profession’s Total Tax Insights™
calculator (www.totaltaxinsights.org) can put these numbers in perspective, enabling you to
make better informed financial decisions.
Take a few minutes to drop in your numbers, and if your results raise questions about your
financial planning choices, we can help. If you’d like to get started, don’t hesitate to contact us
with all your questions.
© 2016 American Institute of Certified Public Accountants. All rights reserved.
CPA/FIRM VALUE
We Can Help You Address the Issues that Keep You Up at Night
Where will your business be in five years? Would strategic budget cuts in some areas improve
your company’s health? Are there ways you can boost revenue? If you’re nearing retirement, is
there a buyer or successor in the wings? These are the kinds of questions that keep many
business owners up at night. Fortunately, as your CPA, we can probably help you sleep a little
easier. Our firm is made up of highly qualified and educated professionals who work with
clients like you all year long, serving as trusted business advisers. We act as coaches, guides
and trainers for our business clients, helping them chart the best route to success. So be sure to
turn to us with all your business questions or concerns.
What’s So Great about CPAs?
You may not have asked yourself that question in so many words, but you may have wondered
what sets CPAs apart from other financial professionals. The answer in short: A lot. We
typically begin our careers with years of college and graduate education. To become licensed,
we must take the demanding Uniform CPA Examination, which tests our knowledge on a wide
range of business topics over a total period of 14 hours. In addition, we have to meet an
experience requirement and then be licensed by a State Board of Accountancy to practice. But it
doesn’t stop there. Once we become CPAs, we also must meet continuing education
requirements to update our knowledge of new business developments as well as commit to a
strict code of ethical standards. Armed with this rigorous training, we’re on the job year round,
ready to help individuals and businesses address their own unique challenges.
If you want more information about our firm and how we can help you resolve all your financial
issues, don’t hesitate to contact us.
Have Questions? We’re Here All Year!
Many clients see their CPAs at tax time, when the main focus is on completing and filing
their tax return. As a result, they may not take the opportunity to ask questions about longterm tax planning or about other important financial concerns. The good news is that we are
available to you all year. We have a full-time, year-round staff of experts with extensive
expertise in a broad range of financial areas. We’re ready when you are to take some time
reviewing your financial situation, helping you understand your options and make the best
decisions. We’re also here in an emergency to help address unexpected financial concerns.
© 2016 American Institute of Certified Public Accountants. All rights reserved.
So, give us a call to discuss your important financial issues whenever they arise.
© 2016 American Institute of Certified Public Accountants. All rights reserved.