Appointments

Posted by Bruce Mc on Jan 20, 2012 in | 0 comments

Items to Bring to Your Individual Tax Preparation Appointment

Image by agrilifetoday via Flickr

 Be it for a return filed on time, or for the extension you might now be working on. No mater when you do this, most everybody is going to need to bring the same things.

• Be sure to include any changes in address, dependents, filing status, or any other substantive changes from the prior year which would have impact on this years return.
• W-2s from all jobs.
• Forms 1099 from all investments and bank accounts (be sure they are all accounted for as the IRS has a complete – list – sometimes).
• Brokerage statements, interest, dividends, etc.
• Student loan interest, child care expenses, tuition, and any other miscellaneous deductions/income.
• Summary of property taxes with copies of all individual items over $1,000.
• Summary of All valorem Taxes (property tax on cars) with copies of all individual items over $1,000.
• Form 1098 reporting home mortgage interest.
• Documentation of mortgage insurance
• Form K-1s from any estate(s), partnership(s), or S corporation(s) from which you’ve received an inheritance. Call and check if you are missing any, as these often do not arrive until March or April.
• Summary of all medical expenses with copies of all individual items/receipts over $1,000. Along with mileage, and any insurance reimbursements.
• Records of gambling profits and losses. To offset reportable profits, you must have an accurate log of expenses and losses including amounts, dates, and locations.
• Itemized record of charitable donations, including cash, checks and donated property.  Keep all receipts.  If value of donated property exceeds $500, an itemized list is necessary.

Example list: “12 shirts, 3 suits, and2 jackets” with Fair market values, as opposed to a “bag of clothes,” will allow a true value for the items. (You can find my researched FMV guide at Fair Market Value Guide for Used Items . I have recently updated the cost for this year –filing for 2011 returns)

Charitable gifts over $500 must include a receipt from the charity.

• A copy of last year’s tax return. (last three years if you  are a new client to your preparer)
• A list of financial goals and the last three years of returns, if seeking counsel.

Some additional items you may need to give:

• Alimony paid or received, including Social Security Number of recipient (save cancelled checks)
• Records of purchase and sale of a personal residence, including the settlement statement from closing (Keep records of all home improvements.)
• Schedule of estimated federal, state and local taxes paid during the year
• Child care expenses and provider information.  The tax identification number of the provider is required.
• Information on IRA contributions made or to be made for the tax year
• Summary of moving expenses, if eligible for the moving expense deduction
• Summary of casualty losses from fire, theft or natural disaster
• Receipts and records for all business-related income and expenses
• Job-related expenses, such as union or professional association dues, work clothing, tools, supplies, job-hunting and job-related education.
• Log book for business use of a vehicle.
• Other records relating to vehicles purchased or leased during the year for which you are claiming business expense deductions
• Receipts for travel, lodging and meals while on business
• Records of all income from and expenses paid for rental real estate you own

If You Can Answer Yes to the Following Questions, You Should Give All Related Documents to Your Tax Preparer.

• Did you pay interest on higher education loans?
• Were there any births, deaths, adoptions, divorces or marriages in your household?
• Did you convert a traditional IRA to a Roth, or re-characterize a Roth back to a traditional IRA?
• Did you receive tip income?
• Did you receive a notice from the IRS, state or local taxing agency regarding a prior year tax return?
• Did you receive installment payments on property sales?
• Did your children under 14 years of age receive investment income?
• Did you support anyone other an your own children?
• Did you make gifts to any individual other than your spouse of more than $12,000?
• Do you have a foreign bank account?
• Did you refinance your mortgage during the year?
• Did you pay points to purchase a home or refinance a mortgage during the year?
• Did you receive non-taxable sick pay?
• Did you have household employees?
• If you did not receive a W-2 from a former employer, do you have the final pay stub from that employer?
• Did you receive money from a lawsuit?
• Did you receive money from any other source not previously mentioned in this checklist?

As you can tell by the last question, this is not all inclusive. It is this reason I regularly encourage taxpayers to have enough trust in their prepares to be able to tell them everything.

When Choosing a tax preparer. . ., “If the tax professional you are talking to (or the tax practitioner you currently use) can’t do what you want honestly, don’t give him/her your business.”

Related articles

• Tax Preparation Checklist
• Mileage Tracking with BizMile Tracker
• The Importance of Good Recordkeeping
• Hobby or Business? It matters to the IRS

Receive a Faster Refund with Direct Deposit

Posted by Bruce Mc on Feb 8, 2011 in e file, Information | 0 comments

. . . it’s tax time!

This year, do you want your refund faster? Have it deposited directly into your bank account. More taxpayers are choosing direct deposit as the way to receive their federal tax refunds. More than 61 million people had their tax refunds deposited directly into their bank accounts last year. It’s the secure and convenient way to get money in your wallet faster.

• Security. The payment is secure – there is no check to get lost. Each year thousands of refund checks are returned by the US Post Office to the IRS as undeliverable mail. Direct deposit eliminates undeliverable mail and is also the best way to guard against having a tax refund stolen.
• Convenience. There’s no special trip to the bank to deposit a check!

You can also electronically direct your refund to multiple accounts. With the new “split refund” option, taxpayers can divide their refunds among as many as three checking or savings accounts and three different U.S. financial institutions. The split refund option, using Form 8888, is also available for paper returns.

Caution: Some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your direct deposit will be accepted. Also, make sure you have the correct nine-digit routing number and your account number when selecting direct deposit.

Don’t have a checking account? L & R Tax Preparation ( or your tax Professional) can Still give you the speed and Security of Direct Deposit.

To request direct deposit, ask us at L & R Tax Preparation for information..

A Week in Perspective

Posted by Bruce Mc on Nov 14, 2010 in Information, Week in review | 0 comments

The Turbo Tax defense doesn’t work in Tax Court. No Gold at the End of the Rainbow – The Court also noted that they gave plenty of opportunities for the Aus to negotiate a settlement with the IRS, and/or to consult attorneys regarding their case. They didn’t until the Court was about to render its decision. Had they asked a tax professional or an attorney familiar with tax law about their case, they likely would have been advised to settle and they would be paying less than they’ll have to.

Disability Insurance Policy To Protect Your Most Important Asset – Your Income – Ask yourself this question. What is your most important and valuable asset? Think about it for a minute. Is it your house? Your savings or your 401(k) retirement plan? Your sports car or rare memorabilia? While all of these things are both important and valuable, none of them truly represent your MOST valuable asset

Don’t Get Taken! What Passive Income Really Means

Love And Money – Love and money don’t always go hand in hand. It can be the cause of countless arguments especially since most of us have different money styles. However, with a few guidelines to promote better money communication, money can become a source of joy within a relationship rather than a stress inducer.

I like this – My “Reverse” Black Friday

ANOTHER ONLINE DEBATE – It seems the announcement of THE SCHEDULE C LETTER has re-opened the online debate of “Should a Sole Proprietor Incorporate, or A One-Person LLC Elect To Be Taxed As A Corporation, For No Other Reason Than to Reduce the Chance of an IRS Audit?” –

            The Answer is individually situational. Please see a lawyer then see you tax professional before making your choice.

Not Going To Happen – All over the tax blogs today has been coverage of the President’s Debt Reform Panel’s Tax Reform Panel options for cleaning up the American Tax Code. It looks well thought out and I intend to give it much more study over the next couple of days. But it doesn’t matter what the options suggest, it won’t happen.

Veterans Day 2010: Tax considerations for members of the military

Home Improvements That Qualify for Tax Deductions – Did you know that some home improvements may qualify for federal tax deductions or tax credits?  Knowing which renovations and improvements are eligible for tax deductions can help you decide whether or not to make the improvements, and can help you correctly claim deductions or credits for these renovations when you file your taxes.

The One Thing to Drop from Your Budget Like a Hot Potato

Financial Loopholes to Take Advantage of Now – In 2001 Congress passed a massive tax reform bill called the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which provided tax cuts to all Americans, in all income levels, via a multitude of changes to the tax code. These tax benefits have come to be known as the Bush tax cuts.

Tax Relief FAQ: How Does the IRS Compute Penalties For Delinquent Tax Returns? – An important step in avoiding IRS tax trouble is to understand how the IRS approaches delinquent tax return penalties.

1099s – The Good, the Bad and the Ugly  - Having a small business issue 1099s for these purchases starting in 2012 would be pointless:

• $852 of office supplies purchased from Staples
• $2,592 of airline tickets purchased directly from the airlines
• $1,300 of services from their CPA firm

Issuing a 1099 for $700 of services rendered by a web designer makes sense though and existing law already covers that.

Steve Jobs Is NOT Giving You Tax Advice (But If He Did…) – . . . , as marketing goes, it’s pretty darn clever. And despite whether you love Apple or not, you have to give them credit for consistently being above the curve on the marketing side. As a tax geek, I’m a little bit in love. Using the Tax Code as a marketing tactic is genius (so, hey Apple, call me).

How to Work a Job Fair – Before You Go to a Job Fair, It’s best to be prepared for a job or career fair. Before you go, prepare yourself to impress, and have an idea of what companies you want to talk to. As get ready to go, consider taking these actions:

So I Won a Free Trip to the Bahamas. Now, How do I Report It on my Tax Return?  - “I will not be sent a Form 1099-MISC. So how should I account for this on my tax return?”

What are the odds of an Obama compromise on Bush rates? – Tax planners got all excited yesterday when top White House aide David Axelrod hinted to the Huffington Post website that the President might be ready to extend the 2010 tax rates for top earners. Absent new legislation, the top marginal rate will rise from 35% to 39.6% in 2011 — and higher when phase-outs are counted. But if the Axelrod statements are a trial balloon, the President isn’t ready to climb aboard just yet. CNN reports on comments he made in Seoul:

Lottery winnings, charitable donations and the tax collector – By now I’m sure you’ve heard about the Nova Scotia couple who hit the lottery and then gave away most of their $10.9 million (Canadian) winnings to charities.

Allen and Violet Large are generous, but they’re no fools. They kept nearly a million for themselves. The septuagenarians say they’ll use the money for emergencies and to buy more lottery tickets.

Good for them! And doubly good for them that Canadian tax law allows them to give away so much of their windfall.

Wash Sale Rule for Investment Losses – All investors experience losses, no matter how experienced or knowledgeable they are.  The Internal Revenue Service (IRS) allows investors to deduct capital losses from investing gains in order to reduce your capital gains taxes.  Under the IRS rules, short-term capital losses can be used to reduce short-term capital gains, which is extremely beneficial because short-term capital gains tax is equal to your ordinary income tax rate.

Roth Conversion Planning Ideas

5 Ways to Make Sure that a Partnership is a Good Idea for Your Business – Ask most business people their most horrendous business story, and it will almost always involve a partner.

Lucky Number 13: 13 Financial Changes for My 23rd Birthday –  now that I’m one day away from being 23, I’ve realized it’s time to start being more financially responsible.

Why have I been writing about Non tax stuff?

Posted by Bruce Mc on Jul 22, 2010 in Information, QuickBooks | 0 comments

Okay, that is becoming a big question almost to the point of being annoying. I am no longer avoiding the question. Please stop filling my inbox and comments with this question, here is the answer: 

In the Quote box below is a copy of a notice I received from NATP, National Association of Tax Professionals.  

IRS Agents Requesting Electronic Copy of QuickBooks Records 

NATP has learned that IRS agents are being instructed to obtain a copy of the taxpayer’s database for examinations for any taxpayer who uses QuickBooks. This will not be done in all examinations, only for those that the IRS agent deems necessary based on the judgment of the agent. If the taxpayer refuses to provide the database and the revenue agent (RA) or manager determines it is necessary, a Summons to obtain the information would be issued. The agents would look at only the information for the year under audit unless they decided to expand the examination to prior years, then information for those years would be reviewed.

The IRS has purchased 1,500 to 2,000 licenses from Intuit and will have one agent trained and licensed per group to assist others in the examination of taxpayers who use QuickBooks. You may not have heard of this yet, but as the software finds its way into RA groups and more agents are trained in its use, we could definitely be seeing a trend in the way exams are conducted since so many small businesses use QuickBooks.

So, in my Small Business client base, I have a lot of clients who use QuickBooks. The information is becoming more relevant to their tax situation seeing how the IRS is now getting these records.

If you have been cheating in QuickBooks, I suggest you make the corrections, now. As I said in my post Mistakes made in QuickBooks, QuickBooks is easy, thus making it user friendly, but being so easy makes it dangerous if you have no formal accounting education. And no I am not saying you need an accounting degree, but if you don’t understand basic bookkeeping, then you could really mess up your books in QuickBooks. And if you are “fudging” your numbers in QuickBooks, well now the IRS will be able to see this and then what? You could owe more in taxes to the IRS. There’s more I think on that, but my peers already think I am a bit out there, so I’ll just leave it at that.

 Please if you are using QuickBooks, get your records straight, get your “books” looked at regularly by a professional.

 Even better yet, when you find a Tax Professional ask them if they are able to review your QuickBooks files.

Reads From Last Week

Posted by Bruce Mc on Jul 4, 2010 in Opinions, Week in review | 0 comments

Last week I wrote two post that weren’t exactly about taxes. In them I mention taxes, but Each one isn’t “about”  taxes. In my post The Company Balance Sheet I talk about what is in a balance sheet. Thursday I posted Mistakes made in QuickBooks. In this I talk about things I get tired of seeing when I go out and help clients with their QuickBooks bookkeeping. Simple mistakes, that can ultimately, can and will affect the survival of a small business. If you’re a business owner all prejudice aside I say you should read them both.

Today’s taxes aren’t too bad –Kay Bell writes, “when compared to where tax rates have been over the years, we’re in pretty good shape” I agree. She also continues her mid year tax tips with

• Midyear tax tip #1: Welcome summer with energy-related tax breaks
• Midyear tax tip #2: Plan health care account moves
• Midyear tax tip #3: Adjust withholding – This is my entry
• Midyear tax tip #4: Evaluate your estimated tax situation
• Midyear tax tip #5: Pay attention to your portfolio
• Midyear tax tip #6: Credit for day camp costs – Thanks for the calendar by the way.
• Midyear tax tip #7: Contribute to your retirement accounts
• Midyear tax tip #8: Get charitable 
• Midyear tax tip #9: Bunch your deductions
• Midyear tax tip #10: Get organized

And everyone seems to be writing about it but, here it is in easy to understand words Homebuyer tax credit extended; closing date deadline is now Sept. 30. Also from Kay:

• New tax laws now in effect 

A little humor about the oil spill/leak – BP Spills Coffee

My friend The Wondering Tax Pro re-reveals his thought on the new rules pertaining to the mandate for all prepares to e-file. In his post WORDS FROM THE WISE, he shares comments from friends and colleagues’ and his points as well. I can assure all, his efforts on how he proceeds will be of great interest to myself.

In His Saturday BUZZ Robert writes:

* The IRS wants to hear from you, or so they say in “IRS Requests Public Input on Expanded Information Reporting Requirement”.

The Service is soliciting “public comment on how to most effectively carry out a law change that, starting in 2012, will require businesses to report a wider range of payments to contractors, vendors and others, usually on Form 1099. These comments will help the IRS issue guidance that implements this provision in a manner that minimizes burden and avoids duplicate reporting.”

If you plan to give the IRS a piece of your mind please be gentle. Remember, the IRS does not make up this nonsense – the cafones in Congress do!

Musings on artisan bakers and tax preparers is more on this from fellow blogger Mary O’Keeffe over at Bed buffaloes in your tax code . She is great. Unfortunately however the Free Fillable Forms option isn’t as good as it sounds as she continues with I withdraw my suggestion of Free Fillable Forms! If you have ever wondered about free filing your forms read this first.

Friday Mary Wrote Do US Presidents efile their tax returns? Not only is the information thought provoking, but it has a link that will take you to site where you can see the returns of past presidents. It also mentions another return that H & R fail at. A great article in all. So you know this follows the ever growing movement concerning mandatory e-filing for tax preparers.  

My friend also writes about home ownership in THE AMERICAN DREAM? Damn,  he has a good idea.

I sincerely believe that all high school students (or perhaps starting earlier) should be required to take a full-year course of study in financial stewardship (which would include a chapter or two on income tax).

If you only read one link from this list, make it THE AMERICAN DREAM?.

Waiting on a refund from your state? Roni Deutch tells on “7 States that Still Owe their Citizens Refunds”  Sadly I have been dealing with this as I have clients in two if the seven.

Jim Maule write the Blog MauledAgain. He has these post that I think are great reads so go read these.

• What Do After-Tax Income Studies Teach?
• The Post-Tax Revenue Era  

If you receive a notice from the IRS. The IRS Hitman has some great advise in his post Watch our for IRS Notices. One of the best things to do when you receive an IRS Notice in the mail is to contact a Tax Professional immediately. Here’s what you need to know before your submit an Offer in Compromise to the IRS. More Harsh Truths on Settling Tax Debt

 I really liked the  math in Joes post 600 million becomes 100 million; 75 jobs becomes 25

The other post from JK that I really liked was If you remodel by starting over, you need to move back in. To get the whole just of this make sure you read the whole thing.

Kelly Phillips Writes Are Middle class increases on the way over at WalletPop

Tans are taxable today – Alrighty then. A 10% tax on indoor tanning services.

The providers will have to pay the tax via quarterly filings on Form 720. The IRS has posted “Nine Tips on the 10 Percent Tax on Tanning Services” This Started July 1^rst, 2010. Oh man, can you believe it? – Nine Tips on the 10 Percent Tax on Tanning Services

New CBO Report Shows Rich Paying More than Fair Share – interesting article from the Tax Policy blog, kind of goes on with premise that today’s taxes aren’t so bad.

Presidents, the Tax Burden and Corruption – Explaining Economic Growth I originally found this over at the Tax Prof blog titled Raising Taxes Leads to More Economic Growth and Private Investment. Wow what a theory.  

Last week I didn’t get any PF blogs in as I wrote that post in a hurry. One that still holds in my mind though is from Kevin over at No Debt Plan.  His post Is a Housing Shortage Headed Our Way? Is an interesting read.

My friend Penelope over at Pecuniarities, re posted her article Put Your Brain Where Your Money Is: Think to Save. This is a well to know lesson and one that I feel is in need more than ever. People need to think. (And not just about money.) Week before last she also posted The Frugal Literate’s Guide to Affordable Reading. I love to read. Thanks Penelope, I learned a few things I think I’ll teach my children.

Handling Debt Collection Calls and Stopping Creditor Harassment by Knowing Your Rights, is a great article, filled with exact advise. A guest post over at Saving to Invest.

Essential Personal Finance Tips For Women in 2010 has some scary statistics, but also holds a valuable read.

Personal Finance Advanced Tips For Young Adults Parents, a must read then have you children read it. Other great reads from A Personal Finance Guide: 

• Open a Bank Account Online the Easy Way
• How to Really Save Money For These Modern Times 
• The New Limits to Bill Collection 

Classic Debate: Should You Pay Off Your Mortgage or Invest That Extra Money? If you thought or think about this read this post.

Cash Money Life has a few great post that are good reads:

• Factors That Affect Mortgage Interest Rates
• How Easy is it to Get Scammed by Online Loan Companies?
• Mortgage Prequalification vs. Preapproval
• How New Overdraft Rules will Affect You

 Realizing the Cost is a thought provoking post if you are considering a new pet or children. And if you like that then be sure to read Involuntary Simplicity.

De-cluttering and Your Money

For those of you who are persistent and plan to buy that house, How Much Can I Afford For A House? A Checklist Is a good read.

Importance Of Knowing About Tax Tips And Benefits

According to the Washington Post “Money Can Buy One Form of Happiness, Massive Global Study Concludes”.

P.S. There seems to have been an addition over at Alltop in the tax section, but it isn’t us, not yet. If you’d like to have The Missouri taxguy added to their “magizne rack” please let them know.

Also I have added The Missouri taxguy over to (over at) Alexa a Web Information site. If you’d like please add a review of The Missouri taxguy.

Thank you and have a great Fourth.

A Certified Public Accountant has been suspended by the IRS

Posted by Bruce Mc on Feb 5, 2010 in Information, News Flash | 0 comments

           OMG could it be so? What is the world coming to, someone with the backing of the IRS, with all the testing needed to “count beans” has been suspended from practice before the IRS. Humm, does this mean they are not sure non-CPA tax return prepares are faulty and they are the only ones doing things a bit shady? Is it going to come out that those with presumed earned credentials are the ones who might be the shadiest?

 Naw this was just an isolated incident.  We won’t need to subject them to regular testing and IRS guided CPE.

 Right?

Or maybe, given as more of these stories come out, maybe, they should be first.

Yes, I think that would be a good plan. 

IRS Suspends Tax Practitioner for Preparing False Tax Returns 

WASHINGTON — A Certified Public Accountant has been suspended for twelve months from practice before the Internal Revenue Service by the Office of Professional Responsibility for providing false or misleading information in connection with the preparation of his clients’ tax returns.  

“Practitioners have a duty both to their clients and to the system to insure taxpayers are complying with tax laws and filing complete and accurate tax returns,” Karen L. Hawkins, Director of the Office of Professional Responsibility said. Robert A. Loeser, a certified public accountant from Houston, Texas, assisted his clients to lower their tax bills by claiming false business expenses on tax returns he prepared. 

For no legitimate business purpose, Loeser’s clients were advised to forward funds from their businesses to two corporations Loeser controlled. The corporations then rebated the funds to his clients.  Loeser prepared the clients’ books and business tax returns expensing and deducting the entire amounts that were paid to the corporations. The IRS alleged Loeser violated Circular 230 by giving false or misleading information to the Department of Treasury and the IRS.  

The settlement agreement included a disclosure authorization that allowed the Office of Professional Responsibility to issue this release.

The Office of Professional Responsibility (OPR) establishes and enforces standards of competence, integrity and conduct for tax professionals — enrolled agents, attorneys, CPAs, and other individuals and groups covered by Treasury Circular 230. 

IRS TAX TIP 2010-06

Posted by Bruce Mc on Jan 15, 2010 in Uncategorized | 0 comments

I have and will continue to post extensively on choosing a Tax pro. I am hopful everyone uses cation when doing so. If you haven’t read my post (several indivdual and a few series of. . .) please do so, for you. The IRS puts this out every year but not to the extent that your tax bloggers do.

Get started here, then please serch my blog and the web for what is being said on this.

Eight Tips to Help You Choose a Tax Preparer

The IRS urges people to use care and caution when choosing a tax preparer.  Remember, you are legally responsible for what’s on your tax return even if it was prepared by an another individual or firm.

Most tax return preparers are professional, honest and provide excellent service to their clients. However, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients.  Therefore, it’s important to find a qualified tax professional.

The following tips will help you choose a preparer who will offer the best service for your tax preparation needs.

1. Check the person’s qualifications Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
2. Check on the preparer’s history Check to see if the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association for attorneys.
3. Find out about their service fees Avoid preparers that base their fee on a percentage of the amount of your refund or those who claim they can obtain larger refunds than other preparers.
4. Make sure the tax preparer is accessible  Make sure you will be able to contact the tax preparer after the return has been filed, even after April 15, in case questions arise.
5. Provide all records and receipts needed to prepare your return Most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.
6. Never sign a blank return Avoid tax preparers that ask you to sign a blank tax form.
7. Review the entire return before signing it  Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
8. Make sure the preparer signs the form  A paid preparer must sign the return as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return.  The preparer must also give you a copy of the return.

You can report abusive tax preparers and suspected tax fraud to the IRS on Form 3949-A, Information Referral or by sending a letter to Internal Revenue Service, Fresno, CA 93888.  Download Form 3949-A from IRS.gov or order by mail at 800-829-3676.      

Links:

• Form 3949-A Information Referral (PDF 94K)

Where Do You Report Suspected Fraud Activity?

With e-file up and running, it is time to find yourself a preparer.