2016 Newsletter

Tuesday, December 20th, 2016

2016 Newsletter

The following are some key updates that you need to be aware of for the 2016 tax year (for returns to be filed in 2017).   They will affect WHEN and WHAT you need to provide to us so that you and we can comply with the changes:

  • For any “business” that has employees and/or pays contract labor, rent, and/or interest, Forms W3/W2 and Forms 1096/1099 are due to be filed with the Social Security Administration and with the IRS by JANUARY 31, 2017. This differs from the prior due date of February 28.  I would also like to remind you that there are SIGNIFICANT penalties if you do not comply with this due date for both Forms W3/W2 and 1096/1099.
  • Partnership Form 1065 will be due MARCH 15, 2017 instead of April 15, 2017. In order to comply with this new due date we will need your partnership tax information no later than February 15, 2017 for us to complete and process a return by March 15, 2017
  • C Corporation Form 1120 will be due April 15, 2017 instead of March 15, 2017.
  • You MUST provide us with a copy of any Form 1098T, for tuition paid, and/or Form 1095’s for health insurance coverage. So please be looking for these forms in the mail or go to the respective institutions to print a copy to provide with your 2016 tax data
  • IRS has imposed additional DUE DILIGENCE requirements on us as preparers. These requirements could result in professional liability penalties on us as preparers for violations, so in order for us to comply with these regulations, we need you to be especially attentive to:
    • You MUST complete the questionnaire and sign the respective cover letter we will send to all Form 1040 clients before we will efile your return. To expedite the efiling of your return, we ask that you provide both of these forms completed and signed with your 2016 tax data.
    • You MUST disclose to us, any foreign financial accounts that you signatory power and/or control over. This would not apply to foreign held investments within a US brokerage account.  There will be additional questions on the questionnaire related to this.
    • More due diligence requirements and file documentation have been mandated for us to follow in order for you to claim:
      • a child tax credit
      • American opportunity tax credit
      • We are not sure what documentation we will need but at the very least you MUST reply to those questions on the questionnaire you will receive

Also be aware, there have been changes to the overtime rules.  If you have ANY employees that work over 40 hours per week, please check into the new rules, if applicable.

This is not an exhaustive list of items that may be applicable for the filing your 2016 tax return, but they are items we are aware of now that would be applicable in the near future.  As you all know, given the current political environment and congress’ past history, there may be other changes that would affect you before the filing of your return.  We will do our best to keep you informed.

And as always, please call with any questions and concerns and have a wonderful holiday season.

 

Dove, Thompson & Co., P.C.


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