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A new Tax Bill was introduced in early November and we can be sure of at least one thing: future tax rates are going to change. Because this is a year-end 2017 letter, our guidance in this letter is aimed at 2017 tax planning rather than predicting 2018, but one thing we are pretty sure of is that tax rates will be lower in 2018. Please contact us for specifics, but the general guidance for most taxpayers is to accelerate expenses into 2017 and delay (where possible) income until 2018. The new tax bill may modify that guidance as the year comes to an end, so we strongly suggest that you speak with us near year end to make confident tax planning decisions for 2017 and 2018.

Below are some of the issues I would like to bring to your attention:

Security and Identity Theft

The IRS has determined that one of the prime targets of data theft is tax preparation companies. This year we attended courses designed to improve the protection of our firm and your confidential data. One of the mandatory changes we are implementing immediately is our new "no-click" policy combined with a new information transfer policy. Because so many electronic intruders get in via email attachments, our firm has instituted our national tax professional security advisor's recommendations and implemented a "no-click" e-mail policy. This means we will not open any documents that you have sent us via email - a mandatory solution, which when combined with our latest security software and other steps makes it extremely difficult for electronic intruders to get through our defenses. This brings the question about how you will transfer data to us, and vice versa. We now will accept data from you in 3 ways: surface mail; drop-off; fax; or through your Dropbox account. We know these changes will cause some hassle on your (and our part) but it is the best way to protect your and our confidentiality.

Affordable Care Act

Contrary to popular belief, you must still have qualified health insurance for all family members in 2017 or pay a penalty. Many Americans are joining "Health care sharing ministries" for health insurance, but there is no tax deduction allowed with these types of plans, even though they keep you from paying a penalty for not having insurance. If you received a Form 1095 from any issuer or agency we MUST have all copies to prepare your tax return.


ALL deductions of any amount must have a receipt. Any individual contribution over $250 must also have an acknowledgement letter from the charity, and the letter must be dated by the date we file your return. The letter should show the date and amount of any individual contribution over $250 and should also state that no goods or services were received in return for the contribution. Remember if you charge a charitable contribution to a credit card by 12/31/2017, we are able to deduct it in 2017!

Mortgage Interest

New rules may change home mortgage interest deductions, so for any refinancing, equity line draws or new loans we must know if the money was spent to buy, build, or improve your personal residence. We also must obtain Form 1098 from you when you pay mortgage interest. Additionally, we must obtain refinancing closing statements.

Stock Gifts and Losses

We find many clients that have stock they purchased many years ago in companies that have gone bankrupt. Go through your records and memory and let us know if you have any "worthless" stock so that we can deduct the losses now. Additionally, if you have a stock whose value has increased you may wish to donate it to a charity by the end of the year instead of donating cash in order to obtain much better tax treatment.

Roth IRA Conversions

You will continue to hear from lots of "experts" this year that you need to convert your retirement accounts to Roth IRAs. While there are a number of advantages to conversions, there are an equal number of disadvantages that carry some major tax consequences. Please do not convert your accounts in 2017 without coming in to see us for an appointment to discuss both the positives and negatives. All conversions for 2017 must be completed by December 31, 2017.

Other Income

If you have any income from BitCoin, AirBNB, Turo, Etsy, EBay or similar consumer to consumer programs, please let us know because many income tax rules are affected and few of these sites provide you with adequate tax information. Our engagement letter also discusses this concern.

Tax Planning

The simplest and most effective tax planning tool for all Americans of all income levels is full participation in retirement plans. Make sure you maximize your 401-k deferral if available, contribute to tax-deductible IRAs, and if over 70 and 1/2 pay all charitable contributions through direct transfer from your IRA to the charity.

Check your employee handbook and see what other fringe benefits are available at work and call us if you aren't sure if it will benefit you. Some of the best fringe benefits provided by employers include cafeteria (or 125) plans, as well as child care plans and wellness programs. Many taxpayers have unused amounts left in pre-tax healthcare flex spending (cafeteria/125 plans). If this includes you get your check-ups, shots, dental work or new glasses taken care of before the end of the year.


There are literally hundreds of other changes, extensions, and deletions that I will consider this year while preparing your return. Due to these numerous changes, I am requesting that you try to have your tax information to me no later than March 24, 2018. Please rest assured that I will use my best resources to once again provide you with timely, complete, and accurate service while keeping your tax burden to the lowest legal amount.