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Message from Joyce Burchett

December 12, 2016

Dear Clients and Friends,

Happy Holidays from your favorite tax preparation office. We all here at Burchett Financial Services wish you a wonderful holiday season and wishing you a wonderful 2017 year ahead. Now that the election is over and we all are waiting to see the changes that we will experience and I believe the tax changes will occur starting in 2017. I do believe that tax reform will be high on the list. So let’s put our seat belts on and wait for the waves. Remember the Bay of Fundy and the highest, wildest waves in the world. We are going to experience the “Fundy Waves” in the next couple of years. The highlight of this year was when I went to Boston with my niece and saw Adele in concert, then went to Cape Cod for the weekend. Adele was absolutely “amazing,” “best concert ever,” “hello, it’s me.”

Our staff will remain the same this year. Cesar is still going strong, but going on 17 years old, and Riley turned 10 on December 6. Their main daily duties is to get as much sleep as possible and make mom take them out for their walks and eat their carrots. Lorraine, at our front desk, says she likes a challenge, and Ann is still doing bookkeeping and doing tax returns. Kayla is still with us and a sophomore this year at UNCC. She’s our girl Friday; she fills in at the front desk as well as general office work. She can do it all. These people are my front line and can help answer questions, set up appointments, return phone calls, messages, and emails, and will provide you with prompt attention. They are my life line and will help you as much as I will, while helping me to accomplish my task of getting each tax return completed as quickly and accurately as possible.

I’ve said it for the last 30 years (yes, this is my 30th year doing taxes) preparation, organization, and receipts. You must have your receipts organized for preparation and to survive an audit. With the budget cuts there are less actual physical audits and more “soft audits”, or letters from IRS & NC. My office spends all summer and fall responding to them and following up on our responses. Most (99%) of the time I can explain away, but it is a time consuming process and tries your patience. Remember, we are working with computers and government entities, not physical people with brains.

Please have all of your information ready before setting up your appointments. We have included a checklist with this letter, or you can go to our website to complete before coming in for our appointment. There is also an update/drop off sheet to be completed if there are new phone numbers, emails, and etc. If you can fill out all the new information before you come in, then that will expedite our appointment time. To set your appointment you can call the office at 704-549-9401, or send us an email at Give us a day and time when you contact us.

If your 2016 tax return claims an Earned Income Tax Credit or the Additional Child Tax Credit on form 8812 your refund will be held by the IRS until February 15th. This delay is being mandated by recent tax law changes because of the proliferation of identity theft and fraudulent tax returns using taxpayer information. This extra time will be used by the IRS to help prevent revenue loss due to theft.

If you are among the millions who have been impacted by IRS identity theft you will receive a PIN from the IRS in the mail by early January. It is a one-time use number that is needed on your form 1040 when you file your tax return. Without this number you will not be able to e-file your tax return.

Also, small businesses organized as a partnership or LLC filing form 1065 must file their tax return by March 15, 2017, which has been moved up a month from last year. C & S corporations are filing a month later this year to April 17th.

Also, you must have your Obama Care form 1095-A if you have health insurance through the marketplace. We must reconcile your subsidy on form 8962. If not completed, then it can hold up your refund, so go online and print out if you haven’t received by mail by January 31, 2017.

The days I will be at the Cornelius office at Safe Retirement Planners will be Wednesday, February 22, 2017 and Thursday, March 23, 2017. Please call my office to schedule those appointments.

Don’t forget our referral program that runs from January 1- December 31. This is my way of saying “thank you” to our dedicated clients and friends who have referred us to friends and associates. For referrals of individual 1040 tax returns you will get a $15 discount and for business referrals it is $30. This is for any new client or business that begins within the year of 2017.

 As always I want to thank you for your continued business and support, and hope we can work together for many more years. I’m looking forward to seeing each of you this year and catching up and helping you with your financial and tax needs. Positive things will happen in 2017!


Joyce Burchett, EA
Burchett Financial Services


  • Consider helping children or grandchildren w/ their education costs. Contribute to their 529 plans; pay their tuition directly to the school escape gift tax.
  • Also you can pay medical expenses directly to facility or doctor & that will escape gift tax rules.
  • Make a Roth IRA contribution for a working child.
  • When it comes to contributions- give appreciated assets, such as stock or collectibles. A double tax break in that it saves paying capital gains tax.
  • Take advantage of a charitable tax break for IRA owners who are 70.5 and older & required to do RMD’s. Up to $100,000 saves in several ways.
  • Trump’s plan could include, but limited to:

-12%, 25%, & 33% down from (15-39.6%) tax brackets now.
-Standard deductions, child tax credits, earned income credits, personal exemptions & dependent car-retirement savings
-Some write offs could be effected state and local state, but charitable gifts and mortgage interest may be saved.
-Capital gains, dividends, and interest income could get some change as well as alternative minimum tax, the estate tax & gift tax rules, but the Obamacare sent taxes for the upper-incomers could be axed.
-There could be some business tax changes- tax note as well as income from S-firms, partnerships, LLC, and sole proprietors, which are passed through to owners.

  • More to come… we’ll keep you posted….


Again, it is extremely important for you to bring all the following to your appointment:

______All W-2’s, 1099’s and all other income items such as 1099 INT, 1099 DIV or 1099B (broker statements from investment companies).  If you sold stock, please provide cost basis or what you paid for the stock sold.  If a stock purchase plan, ask your company or broker what is the cost basis.

______Bring a prepared list of questions to ask during your appointment time.

______If you have refinanced, purchased or sold a home or any other properties during the year please bring closing statements and refinance paperwork.

______Don’t forget your itemized deductions including all medical expenses: doctors, dentists, eyeglasses, insurance premiums and all related medical expenses as well as your mileage.           

______All real estate taxes on your house and property, personal property taxes on all vehicles, boats, motor homes and motorcycles.

______Don’t forget your church contributions, cash & non-cash. Important reminder, you must have receipts for all contributions and all non-cash items must be itemized and an amount listed.  The item must be in good condition or it is not deductible. It is not necessary to bring the receipts; I only need to have the total amounts.

______ Political donations (such as to The Elect Hilary or The Trump Fund) are not deductible as charity donations.

______Any business related expenses including purchase of tools and supplies, mileage that was not reimbursed or actual vehicle expenses. Was there a vehicle allowance given to you? Professional dues, continuing education, uniform cost and cleaning are deductible.

______ If you or your dependent had education expenses, then I will need the 1098-T to fill out the form for the education credits for this year. There will be more questions and compliance questions to be filled out on this year’s form 8863 and attached to the return. If not attached, there is a preparer penalty of $510 for each failure and I, of course, have no intention of paying any penalties.

______Remember to add all your receipts before coming in order to expedite the time involved in the tax preparation. It is not necessary to bring the receipts, bank statements or any back-up information to your appointment; I only need to have the totals per category.

______If you have a business (Sch.C or LLC). Please print out before you arrive for your appointment a profit & loss statement and a balance sheet. 

______Mailing, faxing, e-mailing or dropping off your tax return information is acceptable. I understand that gas is expensive and traffic is always bad, we want to be accommodating to you as much as possible. Please let us know when you are sending us the information and we will let you know when we receive it.  Please send in a PDF format and we can return your completed return in the same format for you to print and put together before mailing or for your copies.

______Appointment times are scheduled every hour unless there is additional time required for your preparation. If you have unusual or difficult first time situations this year and you are not sure of what to bring, please call the office and discuss this before making your appointment. Some of these situations are: Can I take office in home, I sold a rental house, I sold my second home, I sold stock, I sold my primary residence, I bought a primary residence. It is a very costly proposition for you if we have to make an additional scheduled appointment or if your appointment runs into the next clients scheduled time. You may be asked to reschedule and/or you will also be charged an additional sitting fee.

______With this being the third year for Obamacare and it takes extra time, please let us know so that we can schedule you accordingly.  If you don’t have health insurance or you have insurance through the Marketplace, there are additional forms to fill out to make sure you got the correct subsidy or see if you were overpaid. If you have dependents who worked part time, we will need to know their income as well, so bring their W-2’s with you. We will need the form 1095-A from the Marketplace which has to be sent out by January 31 in order to complete your returns. You will also need the 1095-C from your employer letting us know what coverage you had and for what months. This area is very complicated and time consuming. We need time to complete in one sitting.

______EXTREMELY IMPORTANT:   All tax returns and work prepared by my company and myself must be paid for when completed and picked-up. There will be no exceptions to this rule.  We will be accepting Debit and Credit cards this year as well as several main banks within walking distance of the office.  There will be a 5% processing fee assessed for all Debit and Credit card charges.

______In the past, we have mailed returns back with no additional charge but this has proved very costly.  Therefore, we will now be adding to the returns from $5 up to cover the additional expense.

______When your tax return is finished, you are given a copy for your files, and we can send the tax return to you in a PDF file for your records and printing as you deem necessary. If additional copies or faxes are necessary there is an additional $10 fee or $25 for larger or business returns. Before you call the office asking us to fax a copy of your return to someone or make you another copy, please look for your copy. I will need that request in writing along with the additional fee before I can make any copies or fax any returns.

______If you have received letters from the IRS or NC throughout the year and you have not previously notified us please let us know. We ask that in the future you let us know as soon as they are received because most of these are time sensitive. We could lose your refund if you delay.

______Complete the update sheet and checklist before coming in for appointments or you can send back early. This will eliminate coming in early for our appointments.

______Organizers are available as a PDF file and will be sent to you in January. Please send an email requesting one or call the office. You can even send them back to us prior to your appointment to expedite your tax preparations.

______ If you will be needing to do an installed agreement to pay any balance dues, consider this, user fees are $43 for low-income and $225 for regular incomes. This is the privilege to pay the taxes due monthly while still incurring penalty and interest.
______ If you have off-shore bank accounts, you may be required to do some FBAR reporting to the IRS form 114 by April 15 instead of the old filing date of June 30th.


  • Medical expenses deduction is now at 10% of adjusted gross income (7.5% for folks ages 65 & older).
  • Beginning w/ 2017 Tax Returns the deductible medical cost jumps to 10% of AGI for 65 & older.
  • Additional .9% Medicare tax on part of their wages and self employment income
    • Kicks in on singles wages exceeding $200,000 and couples wages exceeding $250,000. Self employed are also subject to the 0.9% surtax on earnings above the thresholds.
  • Additional 3.8% Medicare contribution tax on all or part their net investment income
  • IRA contributions will stay steady at $5,500 plus over 50 catch-up $1,000 for a total of $6500. This is for all kind of IRA (Traditional, Nondeductible, and Roth) into 2017
  • 2017’s limits will be $99,000 to $119,000 for couples and $62,000 to $72,000 for singles.
  • Maximum taxable payroll earnings for Social Security $127,200 plus unlimited for Medicare
  • Cost of Living Adjustment (COLA) for Social Security recipients for 2017 is 0.3% hike.
  • Medicare Part B monthly premium $104.90 per month in 2017. Basic premiums for some people are $121.80.
  • The 401K limit will remain at $18,000 for 2017 plus over 50 catch up is an additional $6,000. These contribution limits apply to 403B and 457 plans. The ceiling on Simples will hold steady to $12,500 and folks age 50 and over can put in $3,000 more. Contributions phase out at AGI slightly.
  • The maximum on the HSA remains at $6,750 in 2017 for family coverage. Self coverage rises to $3,400.
  • IRS eases the use-it-or-lose-it rule for health flexible spending plans. Plans can allow employees to carry over up to $500. Employers must adopt the change
  • IRS is starting to have a heart. If you filed or paid late, there is a first time abate program that may waive any late payment and filing penalties.
  • The top rate on capital gains and dividends 20%, 0%, 15% are still in effect.
  • The standard mileage rate for business use for 2017 will be 53.5 cents. Medical and moving is at 17 cents and charity miles are still at 14 cents a mile. For 2016, business is 54, medical and moving is 19 cents, and charity remains 14 plus parking tolls.
  • The estate and gift tax exemption increased to $5,490,000 for 2017. The annual gift tax exclusion stays the same at $14,000 per donee
  • Obamacare will continue to provide many people with refundable credits to help them buy health coverage. Form 8962 must be filled out to reconcile your advance subsidies to actual. You must have form 1095-A to complete the form and/or your refund can be delayed. So if an employee’s premium exceeds 8% of the household’s AGI then the penalty tax doesn’t apply. Members of households where total income is below the level needed to file a tax return also are exempted. Therefore, once the formula is done, I believe that most people will not be subject to the penalty tax because it will prove to be unaffordable for them.
  • In 2016 & 2017 the maximum fine for not having insurance is $695 a person, $2085 per uninsured families, unless we can find an exemption, such as unaffordable.
  • Starting in 2016, firms with 50 to 99 full-time-equivalent workers will be subject to the pay-or-play rules, and the coverage offer will be expanded to dependents, including kids under age 26. Starting in January 2016, firms with 50 or more full-time-equivalent employees must report 2015 ins. data for each full-timer to the Service and the worker on Form 1095-C.
  • Beginning 2016 all employers with 50 full time equivalent employees must offer affordable health coverage to full-timers and their dependents, or pay a fine.
  • The income levels to qualify for the health premium credit also increase.
  • The income tax brackets for 2016 are a tad higher than last year’s and the 20% top rate on dividends and long-term gains starts at a higher level for 2016.
  • Extender bills passed mid December, 2015, but retracted to January 1, 2015, but now are expiring 12-31-16 unless extended again. The $2 million forgiveness of debt on primary homes- private mortgage insurance and college tuition deduction and credit for installing energy efficient windows as well as geothermal pumps, fuel cell property and wind turbines.
  • Also in the final bill:  Tax-deferred ABLE savings accounts for the disabled, similar to 529 plans. Starting in 2015, nondeductible pay-ins of up to $14,000 a year can be made to ABLEs for those who become blind or disabled before age 26. Payouts will be tax-free if used for housing, transportation, education, job training and the like.
  • Tax compliance and payroll taxes are a major area of fours for the IRS and Department of Justice. These are looking at companies skipping payroll tax deposits as well as the misclassified workers or independent contractors.
  • The 2015 individual audit rate was 0.84%, one in 119 returns. These are the lowest figures in years. The bulk of these audits were correspondence/spam’s done by mail. The main individuals looked at were filers claiming the earned income tax credit- 1.75% was audited last year. Sole proprietors between 2%-2.5% of the schedule C filers reporting $25,000 gross receipts. Upper-incomers: Tax payers with income of $200,000 or higher had a 2.61%, or one in every 38 returns vs. .76% for those with lower incomes. Millionaires get the most scrutiny. 9.55% of tax returns reporting at least $1 million compared with 7.5% in prior year. Lucky super-rich with $10 million or more were audited at 34.69%. These are the people with 1040 and entities they control, such as C & S Corp, LLC, and partnerships. The business exam rate was 0.6% and partnerships and S-Corporations are feeling the heat.
  • We have all heard about the scams, such as “bring gift cards to certain locations,” “student tax” scams, “pay $ now or go to jail,” and false CP2000 letters or tax bills by email/scams. Let me just tell you- the IRS will not call or email you. They do letters by computers. Computers generated pre-formed letters to tell you of any balance dues until you call and set up a payment agreement, pay them, and then they send certified letters. They can knock on your door if you continue to ignore them. Now, they have started the private debt collection next spring. These private collections can contact people by phone, which raises concerns, but they should say they are IRS contractors.
  • IRS continues to pay billions in erroneous claims for refundable tax credits and tax cheating, Treasury inspectors say. A whopping $458 billion fell through the cracks each year from 2008 to 2010, which is not paid voluntarily and timely. IRS will recoup $52 billion through audits and other enforcement activities leaving a net gap of $406 billion per year. Underreported business income from individuals is a big chunk of it ($125 billion in income tax plus $65 billion in S-E tax). The tax gap isn’t likely to get smaller anytime soon. With the limitations in the IRS budget they can’t hire the 600-700 agents needed to replace the $5000-plus agents lost since 2010 and the budget short falls.


More info and further explanations can be obtained at Look for 1040 central or use a keyword for any topic. You can also go to our webpage ( and link to the IRS and NCDOR for more information.





Extended Tax Season Hours begin January 20, 2017
                              Monday-Friday 9:00 AM- 7:00 PM
                              Saturday            8:00 AM- 5:00 PM

The office will be closed from April 19-24th for a little R&R

Corporate Tax Returns are due April 17th & Individual Tax Returns are due April 17th

Partnerships & LLC’s are due March 15, 2017 (*This is new and reversed from before, beginning this filing season*)





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