Presidents Message: The More Things Change...

by Ed Fahey

We start 2017 in a world few would have expected a year ago. Election results and political strife throughout the world foreshadow a new world order that has us all wondering “where do we go from here?” In business, Uber challenges us to think of a world with driverless cars; Tesla dreams of electric busses and trucks that will reduce pollution; and Amazon delivers goods using drones. Whether positive or negative, real change requires all of us to adapt and to seek out new opportunities for ourselves, our companies and our communities.

The accounting world is also changing rapidly. Technology continues to bring tools that speed up processing and enhance analysis that would have been cumbersome years ago. Businesses are using data analysis to improve planning and marketing but wonder if they are asking the right questions. Tax law changes are expected that will impact businesses and individuals and will lead to likely be no less complex than our current system. Not-for-profits face yet another revision to the reporting model which aims to make statements more comparable for donors and lenders. Finally, we continue to see mergers of

accounting firms as the industry, like so many, grapples with succession planning challenges.

At a recent conference, the speaker described the acronym FEAR as False Expectations about Anticipated Results. We don’t know what the outcome of many things happening in our world will actually be. But we add to our own stress and anxiety by focusing on potential negative outcomes regardless of how likely they are to occur. Instead, the entrepreneurs in each of us need to focus on the possibilities created by these changes just as the companies mentioned above have done.

Despite the constant change and inherent fear, some things remain true. We all need advice to help us navigate these changes. We look to our trusted colleagues and professionals to provide ideas and wisdom that simplifies our decisions and points us in the right direction. RINA is grateful that many of you count us among your trusted advisors. For 70 years, we have helped individuals, businesses and community organizations seek their opportunities. Good luck finding yours in 2017.

On November 10th, East Bay EDA hosted the International Consulate luncheon at the Oakland Marriot Convention Center and RINA was there! Tom Neff, Stockholder and International Tax Practice Group Chair serves on the East Bay EDA’s International Trade & Investment Committee to assist in maximizing import/export opportunities for East Bay companies that are seeking foreign investment or trade/service abroad. The luncheon featured Consuls General from 14 countries, international intermediaries, government officials, major corporations, business owners, and city economic development representatives along with a panel of experts who spoke on the state of global trade and investment and how it relates to the East Bay region.

MGI Worldwide is a network of independent audit, tax, ac-counting and consulting firms. MGI Worldwide does not provide any services and its member firms are not an in-ternational partnership. Each member firm is a separate entity and neither MGI Worldwide nor any member firm accepts responsibility for the activities, work, opinions or services of any other member firm. For more information visit www.mgiworld.com/legal.

STATEMENTS

Your Future is Our Focus

First Quarter 2017

Client Profile: Family Support Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2The Day After the Fire - Is Your Company Open? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2 Longevity: How Life Expectancy Affects Retirement Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3Tax Deadlines Occuring in Calendar year 2017 (for Tax Year 2016 Returns) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 4Trump’s Tax Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 5RINA Gives Back: Sparkle Foundation, Inc. - Women Helping Women . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 6First Quarter Calendar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 6

INSIDE THIS ISSUE

STATEMENTS

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Cheryl Smith, Executive Director for Family Support Services of the Bay Area, lived and worked in Bayview-Hunters Point, San Francisco for many years which included Director of Community Affairs at Lennar Corporation and the Executive Director for the Bayview-Hunters Point YMCA. Today, her experience along with her passion has provided the background needed to head Family Support Services in Oakland.

Since 1989, Family Support Services specializes in working with low-income families in Alameda, San Francisco, and Contra Costa counties who face serious challenges in caring for their children, including: families in which grandparents or other relatives have had to step in to care for children; families with children who have mental and physical disabilities; and caregivers raising children who are substance exposed or medically fragile. They also work with families whose children are at risk of abuse by helping adults and caregivers improve their parenting skills and raise children in a secure and nurturing environment. FSS offers five core programs: Respite & Child Care, Family Preservation, Kinship Support Services, Kinship Youth and OreMi Mentoring. Clients are some of the most underserved communities with over 83% of the families being of color, 62% are headed by a single adult and over 60% live in poverty.

Cheryl has a big job and is proud of her dedicated staff, board of directors, generous donors, funding partners, mentors and caregivers that provide so much time and resources to assist families in managing life’s traumas and tragedies. She has created an equitable environment where everyone feels respected and valued. FSS has an overall

organizational budget of $5.1 million, with offices in both San Francisco and Oakland, a team of 50 full-time staff and more than 75 hourly respite/child care providers. FFS serves more than 2,000 Bay Area children each year. FSS’s programs and impact has led to being selected as one of six model programs in the United States highlighted in the Office of the Inspector General’s Report on Model Respite Care Services. Additionally client assessments show that their programs change the lives of families is many ways: children perform better at school; children remain with their families and don’t have to go into traditional foster care; parenting skills improve, stress is decreased for caregivers and family relationships become stronger.

Cheryl’s goal is for her clients to live their best lives and that the services FSS provides help families create environments where children are healthy and reach their potential. If you would like to hear about FSS’s success stories, apply for a board position or find out how you can assist them, please visit their website at www.fssba.org.

Client Profile Family Support Services

by Pamela Raumer, Business Development Director

The Day After the Fire - Is Your Company Open?

By Eric Zhou, Staff Accountant

We all do it. PG&E sends us a list of how to prepare for an earthquake. We keep the list but never buy the water and supplies. Somehow we magically think we’ll have time in the future.

What we do in our private lives, we also do with our companies. Whether the calamity is fire, earthquake, data breach or some other overarching incident, both the immediate impact of the event on your employees and the amount of time it takes your company to become fully operational again, will be directly proportional to the quality of the plan you’ve developed and implemented.

In 1993 when the World Trade Center was attacked, it took Morgan Stanley 4 hours to evacuate their employees. They realized their plan needed revision. On September 11, 2001, Morgan Stanley evacuated their employees in 45 minutes. Lives were saved by planning.

While we can’t foresee every possible implication of a disaster, we can offer guidance on the major areas a plan should cover and how to implement it.

Here are the components of a disaster and recovery plan:

1. Prepare to Stay in Business. Be informed of the most likely risk profile for your area. Then analyze what staff, materials, procedures and equipment are absolutely necessary for operation. You’ll want to consider your business process flow in this analysis and you will want to include employees at various levels in your planning team. Key elements will include emergency payroll, financial decision-making and functioning accounting systems.

2. Make an Evacuation Plan. Your plan should include a chain of command, an assembly site, a shelter-in-place plan and should address fire safety issues. Fire is the #1 cause of business disasters.

3. Back- up and Protect Your Data. With cloud storage becoming so affordable, you will want to develop a plan to back up data regularly in the cloud. You may also want off-site servers. For even small businesses, accounting systems like QuickBooks Online makes cloud storage practical.

“After being with our prior auditors for 18 years, we were happy that the transition to RINA went very smoothly - we found Dana and Howard great to work with.” They were very professional and explained the audit process to our board. RINA was good at not disturbing our daily work and hit all the proposed timelines.”

—continued on page 5

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Longevity: How Life Expectancy Affects Retirement Planning by Terry Allen, CFP®, Accredited Wealth Management Advisor SM, Enhance Wealth Advisors®

The most important variable in financial planning is one you can’t predict or do anything about: life expectancy. Life expectancy

has increased dramatically over the past century, with a person born in 2012 expected to live to age 79, which is 32 years longer than a person born in 1900. However, for retirement planning purposes, the more relevant statistic is not one’s life expectancy at birth, but one’s life expectancy during retirement. How long a client will live, and at what age he or she will retire, will determine quality of life, at least with respect to having enough money to last.

Baby Boomers are finally starting to get real about this. Until recently, Boomers have been far too casual about retirement, claiming Social Security at 62, figuring they’d live to be about 80. They have retired without doing the math – on the assumption that everything will all work out. Now, it’s starting to hit them that they might live longer than expected, and that their expenses in their retirement years, are a lot higher than anticipated.

The Insured Retirement Institute has been conducting an annual survey on Boomer Retirement Expectation. Their 2016 survey found that only 24% of Boomers are confident they will have enough savings to last throughout retirement, and only 27% believe they will have enough money for healthcare expenses. These statistics are cause for concern! Where Boomers once visualized their retirement years would look like the idyllic photos in the ads, they are now starting to see what their own retirement might actually look like. While a few years ago only 40% of Boomers saw Social Security as a major source of retirement income, today nearly 60% are counting on Social Security as their primary income. For a generation that was taught not to count on Social Security, this government sponsored program is turning out to be their financial life line.

Because life expectancy is longer, and retirement income lower, many Boomers are choosing to delay retirement as long as possible. Continuing to work, if you are able, allows you more current income, and possibly even sufficient income to be able to save more for your future needs.

Having income last as long as you do is only one issue to consider with longer life expectancies. The older you are, the more likely you will need long term care. According to the Census Bureau, the number of individuals 85 and over is projected to increase over the next 20 years. Census data also show that individuals age 80 and over are the most likely to need long term care. In 2010, 71% had a disability, 56% had a severe disability, and 30% required at least some assistance with daily living. Recent studies show that over 2/3 of individuals over 65 experienced a need for some type of long term care during the balance of their lives, with the average duration of needed care reaching three years.

Considering costs of healthcare in retirement has become a very significant component of comprehensive financial planning. The Insured Retirement Institute estimates the cumulative healthcare expenses for a 65 year old man in 2015 was $275,000 and for a woman $319,000.

While these statistics and observations are alarming, they are not meant to strike fear and terror in you! They are meant to motivate you to consider all aspects of your retirement life as you lay out the roadmap for your financial future. Unfortunately, many Boomers haven’t planned and haven’t saved enough and will face some tough choices in the years ahead. Staying healthy and able to work may be the best prescription that can be written for Baby Boomers who are past their prime earning years and unable to save. For younger workers; now is the time to tighten your budgets and save as much as possible. Start planning now and begin a disciplined savings program, if you have not already done so. Longevity is one of the most important factors to consider when you undertake formulating your retirement plan, and as we mentioned earlier, it’s a number that can’t be predicted. Getting older is filled with enough challenges without adding financial worries to the heap. Don’t miss the opportunity to plan, and hopefully mitigate stress so you can look forward to a long life, not dread it!

Terry Allen is a registered representative, offering securities, insurance and advisory services through Royal Alliance Associates, Inc., member

FINRA/SIPC and a Registered Investment Advisor. Enhance Wealth Advisors is not affiliated with Royal Alliance Associates, Inc. or

registered as a broker-dealer or investment advisor.

700 Ygnacio Valley Road, Suite 200, Walnut Creek, CA 94596925-932-8609 • info@enhancewa.com • enhancewa.com

How long a client will live, and at what age he or she will retire, will determine quality of life, at least with respect to having enough money to last.

STATEMENTS

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Tax Deadlines Occurring in Calendar Year 2017 (for Tax Year 2016 Returns)

Changes in the Tax Year 2016 due dates (which are filed during calendar year 2017) were enacted as part of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (H.R.3236)

Deadlines are usually the 15th of a month, but if it falls on a weekend or holiday, the date is moved to the next business day. For the year 2017 the deadline dates are as follows:

Individual tax returns (Forms 1040, 1040NR, 1040A, and 1040EZ) (no change)• First deadline is April 18, 2017.• Extended deadline is October 16, 2017.

Partnership returns (Form 1065)• First deadline is March 15, 2017 (note change of deadline).• Extended deadline is September 15, 2017.

Trust and Estate income tax returns(Form 1041)• First deadline is April 18, 2017.• Extended deadline is October 2, 2017 (now September 30, but

the 30th is on a Saturday this year).• Note change: extensions for fiduciary returns are now five and a

half months instead of five months.

C-Corporation returns(Form 1120)• First deadline is April 18, 2017 for corporations on a calendar

year (note change of deadline).• Extended deadline is October 16, 2017 (note change of deadline,

corporations are now permitted a six-month automatic extension).• For corporations on a fiscal year other than a calendar year, the

first deadline is the 15th day of the fourth month following the end of the corporation’s fiscal year with a six-month automatic extension.

• EXCEPTION: for corporations with a fiscal year from July 1 to June 30, the first deadline will remain September 15th (which is the 15th day of the third month following the end of the fiscal year) and the extended deadline will remain February 15 (five months after the first deadline) through fiscal year ending June 30, 2026.

• Starting with the fiscal year ending June 30, 2027, the deadline moves to October 15th (the 15th day of the fourth month following the end of the tax year) and the extended deadline moves to March 15th (six months after the first deadline).

S-Corporation returns (Form 1120S) (no change)• First deadline is March 15, 2017 for corporations on a calendar

year (note there is no change of deadline).• Extended deadline is September 15, 2017.

SMLLCs • Those usually filed with the Individual Return would still be due

April 18. 2017.• SMLLC’s that are considered owned by S Corporations or

Partnerships that we file as stand-alone Returns would now be due March 15, 2017.

Foreign Bank Account Reports (FinCen Form 114)• Deadline is April 15, 2017 (note change of deadline).• Note that unlike tax returns, FBARs do not have a next-business-

day rule if the deadline falls on a Saturday, Sunday, or legal holiday.• Extended deadline is October 15, 2017 (note: this is the first time

ever that extensions are available for FBARs).

Annual Return/Report of Employee Benefit Plan(Form 5500-series)• For calendar year plans, the first deadline is July 31, 2017; extended

deadline of October 16, 2017.

Exempt Organizations(Forms 990-series)• For calendar year ends the first deadline is May 15, 2017.• Extended deadline is November 15, 2017 (note: automatic

six-month extension now).

Annual Return to Report Transactions with Foreign Trusts andReceipt of Certain Foreign Gifts(Form 3520)• Calendar year filers will have a due date of April 18, 2017.• Extended deadline is October 15, 2017.

Annual Information Return of a Foreign Trust with a United States Owner(Form 3520-A)• Due date will be the 15th day of the 3rd month after the close of

the trust’s taxable year.• Maximum extension is six months.

Forms 4720, 5227, 6069, and 8870 Now an automatic six-month extension.

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Trump’s Tax Plan

by Cristina Monteiro, Staff Accountant

With President-elect Trump set to take office on January 20, 2017, Americans can expect a sea of change in policy and governance, particularly considering the Republican majorities in both the House and Senate. Included in Trump’s “100-day action plan to Make America Great Again”, are sweeping changes to existing tax

policies labeled the “Middle Class Tax Relief and Simplification Act” that will impact individuals and businesses alike.

Individuals would expect to see a reduction in applicable tax brackets for both ordinary income and capital gains as follows:

Ordinary Income Rate Capital Gains Rate Single Filers Married Joint Filers

12% 0% $0 to $37,500 $0 to $75,000

25% 15% $37,500 to $112,500 $75,000 to $225,000

33% 20% $112,500+ $225,000+

Furthermore, carried interest would be taxed as ordinary income, the Alternative Minimum Tax (AMT) would be eliminated, and the 3.8% Net Investment Income Tax would cease with the repeal of the Affordable Care Act. Other major changes affecting individual filers would be a limit on itemized deductions of $200,000 for Married Joint filers and $100,000 for Single filers, elimination of the Head of Household filing status, and a dramatic repeal of the estate tax. The Tax Policy Center’s, “An Analysis of Donald Trump’s Revised Tax Plan,” analyzes that overall, after-tax income would increase by 4.1%, however the highest-income taxpayers would realize an increase of approximately 14%.

Corporations will see their tax rate drop from 35% to 15%, while owners of pass-through entities (sole proprietorships, s-corporations, and partnerships) would be allowed to elect to be taxed at a 15% flat rate. According to the Tax Policy Center’s analysis, this would create a great incentive for current wage earners to prefer treatment as a pass-through entity. Businesses would be allowed to elect to expense business investments in equipment, inventory, etc., however would no longer be able to

deduct interest expense. They would also no longer be subject to Alternative Minimum Tax.

The Tax Policy Center’s analysis of Donald Trump’s tax plan calculates that, “the revised Trump tax plan would reduce federal revenue by $6.2 trillion over the first decade of implementation. Three-fourths of the revenue loss would come from reductions in business taxes.” They further assessed that in the short-run, gross domestic product would increase, but that the federal debt would increase, “by at least $7.0 trillion over ten years.”

All in all, taxpayers at all levels of income would be expected to realize some sort of reduction in their tax obligations under President-elect Trump’s plan. Whether any or all of these proposals come to fruition ultimately lies with Congress, who happen to have their own tax plan outlined. Furthermore, Trump’s plan is considered to be quite costly, while Congress’s would incur about half the cost. Regardless, since tax reform is listed as one of Trump’s first 100-days priorities, expect to hear more on the subject in the early part of 2017. As always, RINA will plan on publishing updates on any tax reform and how they might impact you or your business

Source: http://blogs-images.forbes.com/anthonynitti/files/2016/11/rates3.png

4. Protect Your Investment. Have an insurance check-up with your broker. Find out what sorts of losses or interruptions are covered by your policy. Ask your insurer what kinds of records the insurance company will want to see after an emergency to provide coverage and store them safely.

5. Put it in Writing. A Business Continuity Plan will address how to keep things orderly in the event of a disaster, ensure employee safety and help with business continuity. FEMA has several helpful checklists to help you get started. See: https://www.fema.gov/media-library/resources-documents/collections/357. The Insurance Institute for Business and Home Safety also has a step-by-step plan for a small business to create a Business Continuity Plan specifically targeted to small businesses. See: http://disastersafety.org/wp-content/uploads/OFB-EZ_Toolkit_IBHS.pdf.

6. Communication Planning. Communication is vital during and after an emergency. Your plan should address who is responsible for communicating with whom.

7. Have a Team to Respond. Recovering from a disaster can be very time consuming and costly. It is best to recover as quickly as possible. By training and assigning specific tasks and responsibilities to a team, everyone will have specific roles and know their duties. By spreading out the work load and delegating, time and money can be saved.

8. Test the Plan. Many things in life often look better on paper than in practice. To avoid this, test the plan out and see where it falls short. The part of the plan that does fall short might be the most crucial bit.

Anticipation and planning are the keys to an effective Business Recovery Plan.

The Day After the Fire - Is Your Company Open? — continued from page 2

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The Sparkle Foundation is a collec-tion of friends and colleagues with one goal in mind: to help others. A group of women would collect, wrap and deliver gifts and necessities at the holidays before they became a nonprofit in early 2016. Their motto is “where we have ability, we have re-sponsibility.” This foundation is dif-ferent than others, 100% of dona-

tions go directly to women and children who are hand selected by Sparkle, in ways that will best meet their specific needs.

Tracy Teale, Audit Stockholder and Not-For-Profit Practice Group leader is on the board and actively involved with Sparkle Foundation. In December, she participated in their 2016 Holiday Gift Drive. This has been an annual tradition for the past ten years. After putting together a list of gifts and goods per family, they gathered on December 10th to wrap the gifts collected, grouped them by family and delivered them just in time for Christmas. Tracy has been donating gifts and participating in this tradition for five years. “It is so inspiring to see all of these women; children and some very supportive husbands come together and make the holidays special for so many deserving families. It is a blessing to have the opportunity to give back to fam-ilies in need through this amazing organization.” This year, Sparkle helped 28 families and almost 100 individuals. “The stories of joy and happiness that come during the deliveries make me “Sparkle” all year long.”

January 15• Fourth quarter 2016 estimated income tax

payments for individuals.January 31 - paper or electronic• Form W-2, Wages and Tax Statement to

be furnished to employees from employers for BOTH electronic and paper forms.

• Form 1099 to recipients of dividends, interest, non-employee compensation, etc.

• Sales and Use Tax Returns for fourth quarter due.

• Form 940, Annual Federal Unemployment Tax Return for 2016 due.

• Forms DE9 & DE9c, Quarterly Contribution Return and Report of Wages for fourth quarter due.

January 31• New filing date for Form W-3 Transmittal,

together with Forms W-2 to SSA.• New filing date for Form 1096, together

with appropriate Forms 1099 to the IRS - when reporting nonemployee compensation payments.

• New filing date for Form 1096, together with appropriate Forms 1099 to the IRS - for all others when filing by paper or electronically.

• 2016 calendar year S corporation and Partnership tax returns (see insert).

RINA First Quarter

Established 1946 • www.rina.comMember of MGI

475 14th St., Suite 1200, Oakland, CA 94612 (510) 893-6908 / eFax: (510) 873-0977 / 1-800-RINA CPA

201 N. Civic Dr., Ste. 220, Walnut Creek, CA 94596 (925) 210-2180 / eFax: (925) 210-2190

625 Market St., 15th Floor, San Francisco, CA 94105(415) 777-4488 / eFax: (415) 837-1260

STATEMENTS is published quarterly by RINA accountancy corporation for clients, employees and associates

Any tax advice contained in the body of this newsletter was not intended or written to be used, and cannot be used,

by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or

applicable state or local tax law provisions.

JANUARY

Connect With Us

RINA Gives Back

MARCH

The Sparkle Foundation is a collection of friends and colleagues with one goal in mind: to help others. http://www.sparklenow.org

Sparkle Foundation, Inc. – Women Helping Women

by Amanda VergaraMarketing Coordinator