We hope that 2016 has been a happy and prosperous year for you and your family. It's been an interesting year with a few important tax changes that might impact you. Here are some of the changes and issues you need to know about.

Tax Return Due Date Changes:

Beginning with the 2017 filing season, for Federal and California tax purposes, the due dates for PARTNERSHIP and C CORPORATION returns have changed. Be aware that PARTNERSHIP returns are now due a month earlier.

The due dates for returns are as follows:

Partnerships must file returns by the 15th day of the third month following the close of the taxable year (March 15 for calendar-year taxpayers). Previously, these were due by the 15th day of the fourth month following the close of the taxable year;
C Corporation returns are generally due by the 15th day of the fourth month following the close of the taxable year (April 15 for calendar-year taxpayers). Previously, these were due by the 15th day of third month of the taxable year;
S Corporation returns will remain due by the 15th day of the third month of the taxable year (March 15 for calendar-year taxpayers); and
W-2s and 1099s must be filed by January 31, 2017, for the 2016 year. This is one month earlier than in the past. There are penalties for filing these forms late.

The April 15 due date for 2016 returns will be extended to April 18, 2017, because of a holiday celebrated in Washington DC.

Identity Theft:

Tax Refund fraud and identity theft are an increasing problem. Thieves are coming up with new ways to steal your identity, your refund, and your money. Here are a couple of recent tricks used to steal from you.

The threatening phone call: Scammers call and tell you they are the IRS and that if you don't make a payment, you will be sued, subject to a lien or even be convicted of a criminal offence. The IRS DOES NOT CALL you about collection or balance due. In fact, the IRS will generally only call if you are working with an employee on an audit or other issue. If you get one of these calls, hang up immediately.
The letter with a bill: You receive an official looking bill for a small amount - maybe $200 or so. You decide it's easier to just pay the bill than to contact our office about it. Please let us know any time you receive correspondence from the IRS or the State of California. In the most recent fraudulent letters, you are told to make out a check to "I.R.S" rather than to "United States Treasury;" and the return address does not match the processing center address posted on the IRS website.

Foreign Accounts:

Beginning this year, we must report overseas assets owned by businesses as well as individuals. The reporting requirements are increasing and the penalties for failure to report continue to be harsh. Not all foreign holdings must be reported. If, for example, you hold stock in a foreign company through a US Broker, those holdings do not have to be separately reported. However, if you hold any other types of foreign assets, including bank accounts and securities accounts. If you have any doubt as to whether any of your assets are foreign, please discuss those assets with us.

Solar Energy Credits:

Solar energy is growing, and California is leading the way. Solar panels can offer substantial tax savings as you may get a tax credit of up to 30% of the cost of buying and installing the panels.

If you are considering putting solar panels on your home, make sure you understand who qualifies for the credit:

If you lease the panels, you do not get the tax credit;
If you must install a new roof in connection with installing solar panels, you may not get a tax credit for all or part of the cost of the roof; and
If you finance the purchase of the solar panels through any of the programs that allow you to make your finance payments through your property taxes, that portion of your property taxes is not deductible as property tax.

As always, please take extra care in preparing your tax documentation so that we can do the best job to find new tax benefits and protect you from more aggressive audit programs and larger penalties.

Thank you!