How do I find out about my refund?
The best way is to use the Check Your Refund link from the
Resources pages of our website! To look up the status of your
federal or state refund, you will need your social security
number, filing status, and exact amount you’re
expecting back. Alternatively, you can go directly to the IRS
website:
http://www.irs.gov/individuals/article/0,,id=96596,00.html
What do I need to bring when I am having my taxes
prepared?
Following is a list of the more common items you should bring if you have them.
§ Wage statements (Form W-2)
§ Pension, or retirement income (Forms 1099-R)
§ Dependents' Social Security numbers and dates of birth
§ Last year's tax return
§ Information on education expenses
§ Information on the sales of stocks and/or bonds
§ Self-employed business income and expenses
§ Lottery and/or gambling winnings and losses
§ State refund amount
§ Social Security and/or unemployment income
§ Income and expenses from rentals
§ Record of purchase or sale of real estate
§ Medical and dental expenses
§ Real estate and personal property taxes
§ Estimated taxes or foreign taxes paid
§ Cash and non-cash charitable donations
§ Mortgage or home equity loan interest paid (Form 1098)
§ Unreimbursed employment-related expenses
§ Job-related educational expenses
§ Child care expenses and provider information
And any other items that you think may be necessary for your taxes.
Is my social security taxable?
Usually if your income including social security benefits is
less than $25,000 if single or $32,000 if married, your
benefits are not taxable. If your income is higher than those
limits, there are formulas to determine what percentage of
your social security is taxable. Currently up to 85% of your
social security may be taxable.
How long do I keep my records and tax
returns?
You should keep your records and tax returns for at least 3
years from the date the return was filed or the date the
return was required to be filed, whichever is later. It is
recommended that you keep these records longer if
possible.
When can I make contributions to my IRA?
Generally for any tax year, you can make a contribution to
your IRA up until the original due date of the return
(usually April 15). Thus for tax year 2008, you can make
contributions from January 1, 2008 through April 15,
2009.
What is a 529 plan?
A Qualified Tuition Program (QTP), also called a "529
plan," is established and maintained to let you either
prepay or contribute to an account established for paying a
student's qualified higher education expenses at an
eligible institution. States and eligible educational
institutions can establish and maintain a QTP. You do not get
any federal deductions for the account, but any income earned
in it is tax-free. One of the big advantages of a 529 plan is
that many states allow you to deduct some contributions to
the plan from your state tax return.
What do I need to keep for my charitable
contributions?
First, is your contribution cash or non-cash?
If you make a cash donation, you must have a bank record or
written communication from the charity showing the name of
the charity and the amount of the donation. A bank record can
be the cancelled check or a statement from a bank or credit
union—so long as it lists the charity’s name, the
date, and the amount of the contribution. Personal records
such as bank registers, diaries and notes are no longer
considered acceptable proof of contributions.
Any used items (such as clothing, linens, appliances, etc.)
must be in good condition and may only be deducted at the
price you could reasonably ask for the item in used
condition. For contributions worth $250 or more, you must
have a written receipt or letter from the organization. For
contributions worth $500 or more, you must file Form 8283
(Noncash Charitable Contributions) and attach it to your Form
1040. All contributions must be made to qualified charitable
organizations.
If I donate my vehicle to charity, how much can I
deduct on my tax return?
In the past there were a lot of charities asking you to
donate your car, and there were a lot overinflated appraisals
of the fair market value for these vehicles. But recently the
IRS has gotten stricter on the way you determine the value of
your car. Now you must claim the actual amount the charity
received at an auction to sell the car, and the charity
should give you timely acknowledgment to claim the deduction.
If the vehicle is actually used by the charity instead of
sold at auction, then you may claim the vehicle's fair
market value.
What are the tax consequences of selling a
home?
If you sell your personal residence you can totally exclude
from income up to $250,000 of gain if you are single, or
$500,000 if married, regardless of your age at the time of
the sale—if during the 5 years before the sale you
owned the home and lived in it for a total of any 24 months.
The exclusion is not a one-time election; instead it is
available once every 2 years. Recent tax law has adversely
changed the handling of gains on the sale of a home if you
rented the property before you made it your personal
residence. Please contact our office if you believe this
situation will affect you.
How should I keep records for my business
driving?
Keep a log in your vehicle and record the purpose and mileage
of each trip. You also need to record the odometer readings
at the beginning and end of each year, as the IRS will ask
you for total miles driven during the year. Keep your repair
bills as these normally record odometer readings when the car
is serviced.
Can I deduct expenses for a business run out of my
home?
If you use a portion of your home for business purposes, you
may be able to take a home office deduction whether you are
self-employed or an employee. Expenses you may be able to
deduct for business use of your home may include the business
portion of real estate taxes, mortgage interest, rent,
utilities, insurance, depreciation, painting, and repairs.
You can claim this deduction only if you use a part of your
home regularly and exclusively:
• As your principal place of business for any
trade or business.
• As a place to meet or deal with your patients,
clients or customers in the normal course of your trade or
business. Generally, the amount you can deduct depends on the
percentage of your home that you used for business.
Your deduction will be limited if your gross income from your
business is less than your total business expenses.
What do I do if I receive a notice from the IRS about
my taxes?
Don’t panic! the first thing to do is carefully read
the notice—to determine why it was sent, what the IRS
is requesting, and what they want you to do. It may be
nothing of importance; it may even be a notice in your favor.
After reading it you should bring it to our attention.
What is the difference between a C and an S
corporation?
A C Corporation and an S Corporation are exactly the same in
respect to liability protection. The difference is in how you
are taxed. A C Corporation has what is referred to as a
double taxation. First the corporation is taxed, and secondly
the dividends are taxed on the shareholders’ tax
returns. An S Corporation is not taxed at the corporate
level, only at the shareholder level. Most small businesses
are eligible to file as S corporations. But the appropriate
election must be made.