Download 1500 30th Ave S Moorhead, MN 56560 P) 218-233-5105 F) 218

1500 30th Ave S
Moorhead, MN 56560
P) 218-233-5105
F) 218-233-7511
www.frankeandassociates.com
Happy New Year! And with a new year brings another tax season! As always, we would like to
call to your attention a few items to assist you in your material preparation. We also would like
to take this opportunity to introduce our newest tax preparer, Gretchen Busch. Gretchen brings
many years of tax and consulting experience and will be assisting in our drop off preparation.
Just a reminder- tax organizers are available upon request or for download on our website. You
also may request a pro forma organizer which contains your 2015 tax information for reference.
Affordable Care Act/Heath Care – The penalties are still in place for most uninsured
Americans. If you received a Form 1095 from any issuer or agency, we must have all copies to
prepare your return. The threshold for deducting medical expenses as an itemized deduction is
now in most cases 10% of your income.
Payroll/1099 Reporting – Taxpayers are now required to submit both employee/recipient and
employer/payer copies of all W2s and 1099s by 1/31/16. Failure to mail these forms will result
in significant penalties for late filing.
Reported Delays in Processing of 2016 Tax Return Refunds – In an effort to combat tax
fraud, IRS will be verifying tax returns with refunds associated with claiming the earned income
tax credit or the additional child tax credit. The soonest these refunds will process is February 15,
2017. We still encourage you to file as early as possible to ensure your refunds will be the first
to go out once released.
Here are a few other points of interest:
 Standard Mileage Rate – The standard business mileage rate for 2016 is 54¢. The 2017
mileage rate has decreased to 53.5¢. Self-employed individuals – remember to include
your auto loan interest and license tabs!
 Capital Gains/Schedule D –We ask that you bring us all 1099’s received for stock sales
as well as the basis for each stock. Please call our office with questions regarding your
stock basis.
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Home Owner Energy Credit – This credit is set to expire 12/31/16. Many energy
improvements may qualify for a 10% or 30% credit, but it has a lifetime cap of $500.
Mortgage Interest – We must have all Form 1098’s reporting mortgage interest. The
IRS is continuing their scrutiny of this deduction; therefore, we will be asking additional
questions as to the type of loan and for what the proceeds were used for.
Charitable Contributions – Just a reminder that all donations of any amount must have
a receipt. Any individual contribution over $250 must also include an acknowledgment
letter from the charity dated before the return filing date and should include the phrase
“no goods or services were received in return for the contribution”.
Foreign Accounts – IRS has continues to crack down on offshore assets and foreign
accounts. If you have a foreign account, rental or real property, or a business interest (not
through a mutual fund) with aggregate value over $10,000 at any point during the year,
please let us know as some special rules will apply to you. There are substantial penalties
for failure to disclose these items!!
Gift limits are $14,000 for 2016. Gifts aren’t always cash! If you add someone to a
joint account or perfect a quit claim deed for real property, you have essentially made a
gift and a filing requirement exists. Please notify us of all gifts beyond those to charities.
Be sure to let us know if you had any household employees (cleaners, nanny, etc.) who
earned over $1,000 in a quarter or $2,000 for the year as filing requirements exist.
It is highly advised that we meet with you if your income is above $200,000. With
proper tax planning, we may be able to minimize the impact of the Affordable Care Act
surtaxes! Remember, you will pay a 3.8% net investment surtax on unearned income and
a .9% surtax on earned income above certain income thresholds.
If you have received any notices from the IRS or the state in which you file and they
haven’t been reviewed by our office, please bring a copy with your material.
We strive to stay up to date on the latest tax changes. 2017 is sure to bring about tax
reform and planning will be essential. We are available for all your individual, business,
and estate planning needs. Schedule a tax “tune-up” to ensure you are making the best
tax decisions! We thank you for the past business and look forward to serving you in
2017!
Sincerely,
Doug Franke
Brock Franke