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 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.
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.
What are the consequences of early withdrawals from
my retirement plans?
If you withdraw money from a 401(k) or an IRA before age 59
½, the distribution is taxable and there is a 10%
penalty on the taxable amount. The main exceptions
that let you withdraw money early without penalty are as
follows:
The main plans for saving for college are the 529 plans and
the Coverdell plan.
What is the child tax credit?
The child tax credit is a credit of $1000 per child from the
IRS. In order to qualify the child must: 1. Be under 17 at
the end of the tax year 2. Be a citizen of the United States
3. Be your child 4. Live with you for more than half the year
5. Not be treated as the qualifying child of someone else
What medical expenses are deductible?
A deduction is allowed only for expenses paid for the
prevention or alleviation of a physical or mental defect or
illness. Medical care expenses include payments for the
diagnosis, cure, mitigation, treatment, or prevention of
disease, or treatment affecting any structure or function of
the body. Except for insulin, only prescription drugs are
deductible. The cost of health insurance is deductible. You
may also deduct the cost of traveling to and from the care
provider. You can deduct only the part of your medical and
dental expenses that exceeds 7.5% of your adjusted gross
income.
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 buying a
home?
The main tax consequence of buying a home is that you may be
able to deduct the property taxes you pay and any mortgage
interest you pay. Points you pay may also be deductible.
Please contact our office to determine the eligibility.
Normal expenses for maintaining a home are not deductible,
but you should keep records of any major expenses for repairs
or improvements. I you have a taxable gain when you sell your
home, these expenses may be deductible.
I haven’t been filing my tax returns what
should I do?
First, you must determine if you were required to file in the
years you did not file. There are many different items that
could figure into this—such as your filing status, your
sources of income, whether you had any tax withheld, etc.
This is a link to the IRS instructions for filing
requirements for 2007:
http://www.irs.gov/individuals/article/0,,id=96623,00.html.
If you determine you should have filed, contact us and we can
handle all of your prior year filings. It is very important
that you do not just continue to not file. If you owe money
the penalties for not filing are high. If you are owed a
refund you will lose your claim to it 3 years after the due
date of the return.