The world of taxation is enormous and extensive, ‘tax season’ is never over, instead should always be in our minds. Every ‘situation’ can have multiple angles, and the ultimate goal of any individual or taxpayer should be to conserve wealth. One way of doing this is by reducing overall tax liabilities. This happens with solid tax planning and could expand over many years. Although it can be time consuming, keeping organized and detailed records can save tons of time and money in the long run.
It is worth noting that although a competent tax adviser will know about tax planning techniques and current tax developments, you will be more familiar than an adviser is with your financial affairs and objectives.
Generally, your tax-preparer does not need to see your receipts, but a summary of those receipts (either by hand or computerized). It is in your best interest to keep track of your deductible expenses year round to accurately report that information on your tax returns and save the most money ($Tax Dollars$). This should be done monthly or even weekly. Be in the know with all of your income and expenses from a personal level to a more business capacity.
Relative to how W2’s and 1099’s are distributed, you should prepare your year end documents, also by the end of January.
- Items like medical and dental,
- un-reimbursed employee business expenses such as tools and mileage,
- and charitable contributions are some examples of items on the Schedule A (Itemized Deductions).
Other things to think about….
1. Do you need to adjust or change your exemption amount listed on your W4 form?
2. Are you self-employed or a sub-contractor? Are you keeping your ‘books’ up to date? Do you understand what that entails?
If not, shoot me an e-mail at email@example.com for some guidance.
3. Make a folder or space in your filing cabinet to gather tax documents, receipts, or notes pertaining to year end tax items so that you don’t forget or leave anything out. However, physically open the mail and verify the information. Shred anything unimportant and put everything else in it’s place.
*Many of my clients bring in a stack of unopened mail for me to open and often times not only does it not mention TAX on the outside of the envelope (even if it does) it’s usually junk mail or some long lost bill they forgot about.
The deadline of April 18th (usually the 15th), which is Monday, is the deadline for taxpayers who OWE a balance due with their returns. If your returns have refunds coming, don’t panic… and don’t rush in to prepare your returns by the ‘due date’. Let’s prepare them let’s say Tuesday?
Extensions can be filed at irs.gov
Refunds can be checked at irs.gov – Where’s My Refund.
Transcripts can be ordered from irs.gov, if you need the information that has been reported to the IRS.
Have a great Saturday!
Irs Modernized e-file Processing Delays. From Drake Software:
The IRS is currently experiencing processing delays. ‘It is their top priority to resolve this problem in a timely manner’.
We can continue to prepare returns and submit to you your Client Copies, however the processing is delayed until further notice.
Pauline’s Tax Service, LTD
-Friday 01/29/2016 – they’re predicting Denver to dump over a foot of snow between Monday and Tuesday this week. Me, personally, I hate driving in the snow. For your convenience I’ll be accepting e-mailed documents to prepare returns remotely if the need arises.
To send your W2’s, 1099’s, and other supporting documents
~open a new e-mail..
~attach the documents that you receive from the various vendors and institutions.
~in the main box describe any changes you may have had or if everything is the same.
- Did you move, change your phone number or email address.
- Did you get married or get a divorce.
- Which dependents are you claiming.
- Did you buy or sell your house.
- Did you withdraw or contribute to your 401k or IRA.
- Are you going to Direct Deposit your refund, routing and account number.
- list your charitable contributions.
- don’t forget the own tax on your car registration if your Itemizing Deductions.
~if I have questions for you I’ll let you know. I’ll send your client copy to your e-mail for you to review and if everything looks good you can pay your tax prep fees over the phone or in a return e-mail.
If this works for you, e-mail Stephanie@paulinestaxservices.com
The Individual Shared Responsibility provision is a part of the Affordable Care Act and calls for taxpayers to have qualifying health coverage, qualify for a exemption, or make a payment to be included on their tax return. Almost everyone will need to do something new when they file their tax returns this year.
The three types of qualifying coverage are:
- Most employer sponsored coverage.
- Governmental programs – Medicaid, Medicare, and CHIP.
- Health Insurance Marketplace.
The exemption opportunities include:
- you did not have access to coverage that is considered affordable because the minimum amount you must pay for the annual premiums is more than 8% of your household income.
- you had a gap of coverage of less than 3 months
- you qualify for one of several other exemption: ie hardship
In general, the annual payment amount is the greater of :
- 1% of your household income above the filing threshold for your status
- $95 per person without coverage or an exemption, but limited to a family maximum of $285
You will owe 1/12 of the annual payment for each month you or another person on your tax return doesn’t have either qualifying health coverage or a coverage exemption. The payment cannot exceed the national average premium for a bronze level health plan available through the marketplace.
The IRS recently posted that they are disbursing 9 out of 10 refunds within 21 days.
If you would like to check up on where your return is in processing then you can log on to irs.gov and click on “Wheres my refund”. Then answer the questions, you will need your Client Copy.
Alternatively, if you have a balance due this year you can also use the irs.gov website to pay with a CC. All payments are due on April 15th.
- Do you need to update you W4 with your employer.
- Do you need to keep track of your income and expenses for a self employed job?
- Do you know where to locate your 2015 TAX, to better help you plan for 2016?
Book appointments at http://www.paulinestaxservices.com
Send documents to firstname.lastname@example.org
– You can now set your tax preparation appointment online at our website. Logon to http://www.paulinestaxservices.com and click the ‘Book Appointment’ located on the right hand side. Select the form you file, if your not sure select 1040A or 1040. Then select the time that fits your needs.
-You can also send your documents as attachments in an email and we can process them remotely. Tax preparation fees are due upon receipt.
Items you might need:
- W2’s – Income
- 1099’s – Income
- 1098’s – Interest
- 1098t’s – Tuition and Fees for students
- Additional costs (books, technology)
- HSA Information
- IRA and 401K Information
- Charitable Contributions
- Unreimbursed Employee Business Expenses
- After tax medical expenses
- prior year tax prep fees
- Dependent information
- Dependent income information
- Dependent care amounts including caretaker info.
- Profit or Loss Statement: Statement of income and expenses for business.
- Rental income or Capital gains.
Pauline’s Tax Service By Stephanie
12365 Huron St STE 1800
Westminster, CO 80234
The relationship between you and your tax professional should be open and friendly, it’s a partnership and you need each other . It’s an ongoing discussion that changes over time and requires attention to detail. It takes having savvy interview skills.
You can always prepare your own returns, the code is based on an individual system and all of the necessary information and forms can be found, for free, at irs.gov. You can even do it by hand still. However, there are benefits to seeing a professional. Sometimes the benefits result in larger refunds. Nothing beats solid experience, know how and education.
The 1040EZ aka the short form:
- Your taxable income is below $100,000.
- Your filing status is Single or Married Filing Jointly.
- You don’t claim dependents; and
- Your interest income is $1,500 or less
The 1040A may be best for you if:
- Your taxable income is below $100,000
- You have capital gain distributions
- You claim certain tax credits
- You claim adjustments to income for IRA Contributions and student loan interest
You must use the 1040 aka the long form if:
- Your taxable income is $100,000 or more
- You claim itemized deductions
- You report self-employment income
- You report income from sale of property.
Items that you may need are:
- 1099’s – Taxable Income IRA or 401K, HSA
- 1098’s – Deductible interest and Real Estate Taxes
- Charitable Contributions
- Profit/Loss Statement (self-employed)
- Information on the sale of assets
- Dependent information
There are many variables when it comes to the Internal Revenue Code and the reasonable answer is, it depends. The best advise I can give is to do your research and be proactive. This also entails knowing and understanding what forms you file. Ultimately, it is your name, money and responsibility (you could prepare your own returns) but a knowledgeable tax preparer can save you hundreds or even thousands on your bottom line. Not to mention the time you could save because sometimes it’s also about experience.
* From irs.gov: Instructions for form 1040
For instance, the estimated average time burden for all taxpayers filing a Form 1040, 1040A, or 1040EZ is 13 hours, with an average cost of $200 per return. This average includes all associated forms and schedules, across all preparation methods and taxpayer activities. The average burden for taxpayers filing Form 1040 is about 16 hours and $260; the average burden for taxpayers filing Form 1040A is about 8 hours and $80; and the average for Form 1040EZ filers is about 5 hours and $40.
The interview. If you don’t have participate in one, that tax preparer probably isn’t for you. It could be in person, over the phone, or even via e-mail. Questions like:
- What’s your annual income? A ballpark is fine. Are you an employee or self-employed? Or Both?.
- Do you or did you have any dependents? A common misconception is that you “file the easy form” while claiming dependents and that is not the case. In fact, included in form 1040EZ’s title is Department of the Treasury—Internal Revenue Service Income Tax Return for Single and Joint Filers With No Dependents
- Did you make any contributions or withdrawals to an IRA?
- Are you a student and/or do you have student loan interest you’ve paid?
Additionally, to ensure the best price for tax prep and also the ensure the least possible taxable income (pay less tax) it’s imperative that all of the necessary documents are available at the time of preparation. So, do not arrive to your tax appointment without your W2’s or without your mortgage interest statement or your 1099’s.
Those of you who know me personally know that I don’t do excuses, and the ‘I forgot my homework/ Dog ate my homework’ doesn’t apply here. Grab a cup of coffee or tea, open all of the documents you’ve set aside that say TAX DOCUMENTS. Get a visual of what you’ve received so that you know what your missing. Then on a separate sheet of paper make notes about the additional items you may need:
- Charitable Contributions
- Out of pocket medical expenses
- Student costs and 1098T from the school
- Dependents birthday’s and Social Security numbers, etc.
With that said, Good Luck on your search to find the best tax preparer for you!
Taxpayers who are generally due a refund have to file by the April 15th deadline every year; returns with refunds coming have 3 years to file.
However, you could lose any refund due if the 3 year deadline passes.
If there was a balance due then file by April 15th or file an extension which will give you until October 15th.
There are 2 penalties to be aware of. The failure to file and failure to pay. So, if you have a balance due but don’t file until October then you may still incur the failure to pay penalty. 90% of your yearly tax bill is due by April 15th.
The object is not to have a large refund at the end the of the year. This means you over withheld and let the IRS hold your money interest free all year. Save your own money. Then, in the event of a government shutdown or personal emergency, you’re not desperate for that money.
Ally bank offers great rates for savings accounts.