2016 Client News Letter

To Clients and Friends of Denby Financial Services –

Happy New Year to you and your families and best wishes for a happy and healthy 2016!

Tax Year 2015

The IRS will officially begin accepting returns on Tuesday January 19, 2016. I already have several appointments set-up with clients this coming week, so for those of you who are ready…I’m ready for you! Most tax documents (1099’s, 1098, etc.) should be sent to you soon. Employers are required to deliver W-2’s by January 31st and Brokerages are required to deliver by mid-February, so be sure to check your mail carefully. I encourage existing clients to contact me as soon as possible for an appointment to review your documents and begin the filing process. I will also accept your documents via mail or UPS, etc. I will be installing a secure/locked mail box for added security. Additionally, filing promptly can be a safeguard against identity theft. Unfortunately, last year across the country hackers used a tactic of filing ahead of taxpayers, using their social security numbers, to obtain fraudulent refunds. For this and various other reasons I’m not an advocate of filing extensions. Note, this years filing deadline is Monday April 18, 2016 (not April 15th) due to the Emancipation Day holiday in Washington DC.

Lastly, this fall I passed all three parts of the IRS Special Enrollment Examination to become an Enrolled Agent (pending a background check by the IRS). The Enrolled agent status is the highest credential the IRS awards. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years. Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before (from IRS website).

2015 Tax Law Changes

Here are just a few items that may impact 2015 returns:

  • Standard Deductions increase to – Married $12,600; Single $6,300; Head of Household $9,250 (additional deductions available to those 65 or older)
  • Personal Exemptions increase to $4,000
  • Social Security wage base increases to $118,500
  • Healthcare Insurance individual mandate – due to the Affordable Care Act (Obamacare) those who are uninsured will face a penalty of $325 per person up to a ceiling of $975
  • IRA and Roth IRA deductions remain unchanged for those eligible at $5,500 (+$1,000 catch-up for those 50 or older)
  • **note for 2016 planning purposes – 401k contribution limits remain at $18,000 (+$6,000 for those 50 or older)

Investment Advisory Services

For those of you who are interested I’m able to provide clients with investment advice and access to products such as IRA’s, Investment accounts, certain Educational Accounts, and Rollovers.

As a brief update for existing investment advisory clients – In general the broad market indexes were essentially flat in 2015 with the S&P 500 losing about 1%. To put this in context this was the first losing year for the S&P since 2008…the first in seven years. The first week of 2016 has been extremely volatile with the S&P 500 down 6% (Currently the S&P is now 10% below its 52 week high). Although a drastic short term decline, it shouldn’t be surprising for a correction to occur given a multiyear run-up, the Fed tightening interest rates, geopolitical concerns, and falling commodity prices. It will be interesting to monitor corporate earnings performance as they are released this quarter. For long-term investors it’s important not to panic during turbulent times and stick to your investment plans. Perhaps this volatility will create opportunities in 2015, and I will be working with each of you individually towards achieving your portfolio goals.

Best Wishes,

James Denby