Category Archives: Uncategorized

2018 Client Questionnaire

Our fillable 2018 Client Questionnaire is now available.  Click the link and download in order to fill it in.  Remember to save the  form to your computer.  If we have already prepared your tax return for 2018, you do not need to complete the updated questionnaire.  When you are ready to bring your tax documents, please complete the Questionnaire and bring this with you to check in.   Please also bring your drivers license with you.  The IRS and South Carolina are asking for this information to prevent identity theft.  Refunds can be delayed without this information.

We look forward to serving you.

Thank you.


2017 Client Questionnaire

Our fillable 2017 Client Questionnaire is now available.  When you are ready to bring your tax documents, please complete the Questionnaire and bring this with you to check in.   Please also bring your drivers license with you.  The IRS and South Carolina are asking for this information to prevent identity theft.  Refunds can be delayed without this information.  Thank you.


Letter to Clients

For our Clients,

A new Tax Bill was introduced in December 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. We will posting our 2018 Client Questionnaire over the next two to three weeks.

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. We will accept a list from you for charitable deductions without further documentation. As always, you are responsible for proper record-keeping.

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. Furthermore, 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 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. Many income tax rules are affected and few of these sites provide you with adequate tax information.

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 and contribute to tax-deductible IRAs.

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, dental work, or new glasses taken care of before the end of the year.

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. This practice, combined with our latest security software and other steps, will make 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 4 ways: surface mail, drop-off, fax, or mandatory upload to our web portal. We know these changes will cause some extra hassle, but it is the best way to protect confidentiality overall.

Future Income Tax Rates & Other
We highly recommend that when you are getting your information to us for your 2017 Federal tax return that you set an appointment for an after tax season “Tax Tune Up” to examine tax and estate planning strategies. Because of the new tax bill, if your family income is over $100,000 it is almost mandatory that we meet for future tax planning because of surtaxes.

There are literally hundreds of other changes, extensions, and deletions that we will consider this year while preparing your return. Because of these changes we are requesting everyone to try to have their tax information in to us at least two weeks earlier than normal, and no later than March 31, 2018. Please rest assured that we will utilize our best resources to once again provide you with timely, complete and accurate service, while keeping your tax burden to the lowest legal amount. Thank you again for your continued support.

Clifford W. Stumbo, CPA


2016 Client Questionnaire

To get a head start on ‘check in’ in our office to start the process of your 2016 tax return preparation, please click the link below to download the fill it in PDF version of our Client Questionnaire and Health Coverage Questionnaire.  The two questionnaires are four pages total.  Please deliver the completed questionnaires to our office at the same time you submit all of your tax documents.

2016 Fill It In Client Questionnaire Link

Thank you,
Cliff Stumbo

2015 Client Questionnaire

To get a head start on ‘check in’ in our office to start the process of your 2015 tax return preparation, please click the image link below to download the PDF version of our Client Questionnaire and Health Coverage Questionnaire.  The two questionnaires are four pages total.  Please deliver the completed questionnaires to our office at the same time you submit all of your tax documents.

Thank you,
Cliff Stumbo

South Carolina to Delay 2015 Refunds

Where is my refund?

Refunds for returns filed prior to 3/1/16 are expected to be issued within two to three weeks of 3/1/16. For returns filed on or after 3/1/16, the SCDOR expects to issue refunds within two to three weeks of the date the return was submitted.  We request your patience in this process. You can check the status of your refund here. Refund status becomes available when your refund is processing not necessarily when the SCDOR receives your return. 


A nationwide scam targeting taxpayers continues to grow. In a new effort to take money from unsuspecting victims, fraudsters are sending out phony tax bills on what purports to be official IRS letterhead. They are also sending out e-mails from false websites that contain “IRS” in the Web address.  In addition, scammers claiming to be IRS employees continue to call taxpayers, telling them they owe taxes and must pay fast. Please keep your guard up and don’t fall victim to any of these scams.

2014 Standard Mileage Rates Announced

2014 Standard Mileage Rates for Business, Medical and Moving Announced

The Internal Revenue Service today issued the 2014 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 56      cents per mile for business miles driven
  • 23.5  cents per mile driven for medical or moving purposes
  • 14      cents per mile driven in service of charitable organizations

Required Notice of Health Insurance Options to Employees

If you have employees and you have gross income of $500,000, you are required to comply with the Fair Labor Standards Act (FLSA) regarding the requirement to provide notice to informing employees of their health insurance coverage options under your business and/or The Marketplace.

Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are not employees.

Model Notice Provided:

To satisfy the content requirements for FLSA, model language is available on the Department of Labor’s website  There is one model for employers who do not offer a health plan and another model for employers who offer a health plan or some or all employees.  Employers may use one of these models, as applicable, or a modified version, provided the notice meets the content requirements described above.

US Department of Labor recommendation is that you hand the completed Model Notice that is applicable to your business with paychecks and document which pay date you supplied the notice to the employees.

How will health care reform affect you & your taxes?

PDF Printable Copy

It’s massive, and it’s complicated. At more than 2,400 pages, the Affordable Care Act (ACA for short) has left businesses and individuals confused about what the law contains and how it affects them.

The aim of the law is to provide affordable, quality health care for all Americans. To reach that goal, the law requires large companies to provide health insurance for their employees starting in 2015, and uninsured individuals must get their own health insurance starting in 2014. Those who fail to do so face penalties.

Insurance companies must also deal with new requirements. For example, they cannot refuse coverage due to pre-existing conditions, preventive services must be covered with no out-of-pocket costs, young adults can stay on parents’ policies through age 26, and lifetime dollar limits on health benefits are not permitted.

The law mandates health insurance coverage, but not every business or individual will be affected by this requirement. Here’s an overview of who will be affected.

FOR BUSINESSES – It’s all in the numbers

  • Fewer than 50 employees

Companies with fewer than 50 employees are encouraged to provide insurance for their employees, but there are no penalties for failing to do so. A special marketplace will be available for businesses with 50 or fewer employees, allowing them to buy health insurance through the Small Business Health Options Program (SHOP).

  • Fewer than 25 employees

Small companies that pay at least 50% of the health insurance premiums for their employees may be eligible for a tax credit for as much as 35% of the cost of the premiums. To qualify, the business must employ fewer than 25 full-time people with average wages of less than $50,000. For 2014, the maximum credit increases to 50% of the premiums the company pays, though to qualify for the credit, the insurance must be purchased through SHOP.

  • 50 or more employees

For companies with 50 or more full-time employees, the requirement to provide “affordable, minimum essential coverage” to employees has been delayed for one year and is not required until 2015. Originally, employers had been required to file information returns that reported details about the health insurance they provided, with penalties to apply if the insurance did not meet standards. Companies complained that they needed more time to meet the reporting obligations, and in response the IRS made the reporting requirement optional for 2014. Without the reporting, the IRS could not determine penalties, so the penalties also were postponed for a year.

Bottom line: the IRS is encouraging companies to comply in 2014 even though there are no penalties for failure to do so.

  • The business play or pay penalty

Starting in 2015, companies with 50 or more employees that don’t offer minimum essential health insurance face an annual penalty of $2,000 times the number of full-time employees over a 30-employee threshold. If the insurance that is offered is considered unaffordable (it exceeds 9.5% of family income), the company may be assessed a $3,000 per-employee penalty. These penalties apply only if one or more of the company’s employees buy insurance from an exchange and qualify for a federal credit to offset the cost of the premiums.

FOR INDIVIDUALS – It’s all about coverage

Currently, attention is focused on the health insurance exchanges or “Marketplace” that opened for business on October 1. Confusion about the Affordable Care Act has left many people thinking everyone has to deal with the exchanges. The fact is that if you are covered by Medicare, Medicaid, or an employer-provided plan, you don’t need to do anything.

Also, if you buy your health insurance on your own and are happy with your plan, you can keep your coverage. However, the only way to get any premium-lowering tax credits based on your income is to buy a plan through the Marketplace.

  • The exchanges (Marketplace)

Each state will either develop an insurance exchange (Marketplace) or use one provided by the federal government. The Marketplace will allow those seeking coverage to comparison shop for health plans from private insurance companies.

There will be four types of insurance plans to choose from: Bronze, Silver, Gold, and Platinum. The more expensive the plan, the greater the portion of medical costs that will be covered. The price of each plan will depend on several factors including your age, whether you smoke, and where you live.

Many individuals will qualify for federal tax credits which will reduce the premiums they actually pay. Each state’s Marketplace will have a calculator to assist individuals in determining the amount, if any, of their federal tax credit.

  • The individual play or pay penalty

If you’re one of the 45 million or so Americans without health insurance, you will need to get coverage for 2014 or pay a penalty of $95 or 1% of your income, whichever is greater. Low-income individuals may qualify for subsidies and/or tax credits to help pay the cost of insurance.

The penalty increases to $325 or 2% of income for 2015 and to $695 or 2.5% of income for 2016. For 2017 and later years, the penalty is inflation-adjusted. Those who choose not to be insured and to pay the penalty instead will still be liable for 100% of their medical bills.

NOTE: If you will be shopping for health insurance on the Marketplace, be aware that there’s no need to rush to enroll; the enrollment period runs from October 1, 2013, through March 31, 2014. Take the time you need to review your options and select what’s best for you and your family.


In addition to the penalties required by the Affordable Care Act, the law made other tax changes that could affect you. Among them are the following:

  • Annual contributions to flexible spending accounts are limited to $2,500 (indexed for inflation).
  • The 7.5% adjusted gross income threshold for deducting unreimbursed medical expenses increases to 10% for those under age 65. Those 65 and older can use the 7.5% threshold through 2016.
  • The additional tax on nonqualified distributions from health savings accounts (HSAs) is 20%, an increase from the previous 10% penalty.
  • The payroll Medicare tax increases from 1.45% of wages and self-employment income to 2.35% on amounts above $200,000 earned by individuals and above $250,000 earned by married couples filing joint returns. This rate increase applies only to the employee portion, not to the employer portion.
    • A 3.8% Medicare surtax is imposed on unearned income (examples: interest, dividends, capital gains) for single taxpayers with income over $200,000 and married couples with income over $250,000.


The Affordable Care Act may be one of the most complicated and confusing laws ever passed, but one thing is very clear: the law will affect the taxes of most Americans. In order to manage your tax bill, you will have to factor the new health care rules into your overall personal and business tax planning. For guidance, contact our office.


To begin checking out your state’s exchange (Marketplace), start at – the federal government’s website on the Affordable Care Act.








NOTE: This Memo is intended to provide you with an informative summary of the tax issues connected with the Affordable Care Act. This massive package of legislation contains varying effective dates, definitions, limitations, and exceptions that cannot be summarized easily. For details and guidance in applying the tax provisions of this law to your situation, seek professional assistance.