Planning is Key for Film Tax Incentives and 2017 Tax Law Changes: Insights from Ted Fricke of Fricke & Associates, P.C.

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By Mollee Harper, Senior Editor

We learned important tax credit insights for Georgia film productions during our recent interview with Managing Partner William “Ted” Fricke, CPA, CFF, CGFM, CGMA of Atlanta CPA’s Fricke & Associates, P.C. During our time together, Fricke gave us a glimpse into his firm and their full-service offering to individuals and entities doing business in Georgia, including advice to entertainment industry professionals about how to properly plan and realize Georgia’s film tax incentives. Fricke also offers a preview of significant changes coming in tax laws in 2017.

Fricke explained, “We are a full-service CPA firm with services broken down into three areas. The first service is tax compliance. We provide income tax preparation for approximately 450 businesses, 1,200 individuals, 100 trusts and 100 partnerships each year. As part of our tax services we provide comprehensive income tax planning. We meet with our clients each year to make sure they are doing what they need to for their current year as well as plan ahead for the next year. We discuss everything from salaries, pension plan contributions, bonuses, income deferrals or accelerated deductions and corporate structure to help our clients maximize their income while minimizing tax burden. We also have extensive experience in tax representation. We represent businesses and individuals with the IRS and state taxing authorities in responding to notices or audits.” 

Fricke continued, “We provide additional services in financial and forensic auditing. We also provide client accounting services which include preparing sales tax returns, property tax returns, and providing bookkeeping, payroll services and consulting on financial matters including assistance in obtaining bank financing.”

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Fricke & Associates, P.C. is an Atlanta-based Certified Public Accounting firm serving the accounting and tax needs of privately-held businesses and individual clients throughout the state of Georgia. The commercial practice of Fricke & Associates, P.C. was founded in September 1999 when William Fricke, CPA and Higgins, Brown & Smith, CPAs merged. Fricke & Associates, P.C. offers diversity in both general and specialized accounting, tax, auditing and consulting services to clients in a wide range of industries including: film, music, law, health care, education, engineering, technology, retail/wholesale, transportation, real estate, construction, banking, manufacturing, benefit plan administration and the hospitality industries.

Fricke offered, “We’ve been working with businesses in the entertainment industry since the 1990s, both in the film and music industries in particular. We provide services to production companies in feature films, as well as supporting businesses to the industry, including caterers, lighting, sound and camera professionals.” 

Fricke continued, “The film and music industries are a little different. Our clients are often working on multiple projects at one time so they have a variety of W-2s and 1099s from multiple jobs they worked on throughout the year. A lot of these companies provide both the professional services and charge rent for the equipment they use on the production. For tax purposes you have to be able to categorize that properly to avoid overpaying taxes. We do a lot of planning for our entertainment clients on that end.”

Fricke added, “Many entertainment industry professionals often miss the Section 199 deduction for domestic manufacturing deductions. This is over looked because tax preparers think it applies only to traditional manufacturing. It is specifically for film and music production industries and allows an additional deduction of 9% against their taxes.  Taxpayers should also be certain to take full advantage of Section 181 to expense film and television production costs and Sections 179 and 168 to expense the cost of new equipment, vehicles and leasehold improvements.”

Fricke concluded, “The best advice I can give a film industry professional who is planning to do business in Georgia is that tax planning is critical to the process. The Georgia tax incentive allows for a tax credit for certain expenses. You have to make sure you know what qualifies and how to apply for those credits. The earlier I can get involved with a client the better. Bringing in a professional to assist with tax planning even at the conceptual stage can make a big difference to all individuals and companies in this industry.”

Fricke is a graduate of the University of Georgia with postgraduate studies at Georgia State University. He holds certifications as a CPA Certificate in the State of Georgia (CPA), Certified Financial Forensics Accountant (CFF), Chartered Global Management Accountant (CGMA), and Certified Government Financial Manager (CGFM). Fricke is a member of the Georgia Society of Certified Public Accountants, Institute of Nonprofit Advisors, AICPA, and AICPA PCPS Editorial Advisory Group.

Fricke shared, “We know there are some new changes coming to the tax code for 2017, the most extensive we’ve seen since 1986. This next year is really going to be different than any other year with significant changes that affect all of our clients in all industries. In exchange for lower tax rates a lot of deductions and credits are going to be eliminated. It looks like there may be a significant reduction in corporate taxes in 2017. A lot of folks may be paying 15% or 20% instead of 39%.  The best advice I can give right now is to accelerate expenses and deductions into 2016 and if possible push income into 2017.”

Fricke concluded, “Getting a professional involved to help plan and prepare for those changes will be more critical this next year than in the past. By the end of the first quarter 2017, we should have a good handle on the new landscape.”

Fricke & Associates, P.C. is the CPA firm of choice for many in the metro Atlanta area. Over the years, the firm has maintained a steady growth based on reputation of excellence derived from proven results. The firm’s mission is to be the most trusted business advisor for each client creating value through accounting, tax and professional consulting services. Fricke and his team value every client relationship treating each as a partnership with personal attention and expertise from years of advanced training, technical experience and financial acumen.

For more information on Fricke & Associates, P.C. visit: https://www.frickecpa.com/.

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