December 1, 2016 Dear business client,

We are once again writing to remind you of law changes, problem areas, and information we will need to prepare your 2016 business tax return. Payroll If you prepare your own payroll, the FICA withholding for 2017 remains at 7.65% . W-2 & 1099 Reporting NEW!!!! Deadline for Filing and Signing 1099s and W-2s is January 31, 2017 If we do not prepare your payroll and/or do not provide bookkeeping services for you, please have this information to our office no later than January 15 th so that we can prepare these information returns by their due date of January 31, 2017. For 1099’s we will need complete name, address, FEIN/SSN, and amounts. Also, for your protection be sure you have on file:  Signed and completed W-4 and I-9 for all employees (let us know if you need either form).  Signed and completed W-9 in file for all 1099 reporting - amounts paid for services or rents over $600. ). Reminder! Payments to all Veterinary Clinics (including corporations) in excess of $600 must now also receive a 1099. Finally, Federal and state law requires all employers to report newly hired employees to the Dept. of Human Services in Bismarck no later than the 15 th day after the employee is hired. This must be done and can best be achieved by dropping off the employee’s W-4 to our office so that we may submit on your behalf. If you do not do so, we’ll assume that you have taken care of this yourself. Reminder! If your annual business gross revenue exceeds $500k, you must provide all new hires with a written notice about the Affordable Care Act’s Health Insurance Marketplace within 14 days of the employee’s start date. You can request this notice from our office. Business Mileage For 2017 = 54 cents. You should be keeping track of this mileage with a log book, calendar or similar system. Tax Return 6-Point Information Needed As usual we also need the following information to prepare your tax return for this year (Check off as completed): 1.______Copies of any federal or state tax correspondence received during the year, 2.______Copies of any equipment purchase invoices over $1000, 3.______Loan Interest paid and Loan Principal Balances on December 31, 4.______12/31/16 Year End Balances of: Accounts Receivable $______, Accounts Payable $______, 5.______Year-end summary of business activity-back up or hard copy (QuickBooks back-up, trial balance, etc.) 6.______All 1099 Forms received Website Information We continue to direct your attention to our web presence at www.strandcpa.com. Our website continues to be a hub of valuable information as well as a way for us to stay connected to you all year. This will give you encrypted access to: 1. Securely Exchange Files with us using the “Client Uploads” section. 2. Register for our Monthly Newsletter. 3. View and Print valuable tax worksheets and our Annual Letter in the “Resources” section. Inventory The IRS continues to place an increased emphasis on actual physical inventory on hand at December 31. Please make sure to physically count your inventory, retain the records, and provide us with the accurate total cost of inventory on hand at December 31, 2016. In the event of an audit you must be able to provide copies of physical count sheets, so we are this year placing an increased emphasis upon obtaining correct year end physical inventory amounts.

(Please record your ending physical inventory count below and bring this letter to your tax appointment.)

12/31/16 Value (at cost) $______BusinessName______Signature______

We would also like to remind you to make sure that your corporate minutes are maintained on an annual basis – we are not allowed and DO NOT maintain these forms for you. Of course only S and C corporations are required to maintain minutes, LLC’s generally have no such requirement.

Affordable Care Act Policies In late 2013 the IRS released Revenue Procedure 2013-54 which, among other things has ended the ability for an employer to provide tax free reimbursement of individual health insurance costs, co-pays, deductibles and most other health care related costs. Failure to comply with these new limitations that went into effect January 1, 2014 can subject the employer to penalties of $100 per employee, per day under IRS Notice 2011-1 and ERISA rules. Effective January 1, 2014, by signing below we state that we have not provided tax-free reimbursement or payment of individual health insurance premiums or any other medical items, except for those specifically allowed by law as non-discriminatory employer-sponsored group health care plans.

Employer Date

We once again thank you for your confidence and trust in us. If you have any questions regarding this letter or other tax compliance or planning issues please contact us at the office.

Sincerely,

Chad R. Strand, P.C.