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Tax Prep Checklist: 6 Types of Documentation to Bring to Your Accountant This Tax Season

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You’ve found the perfect accountant for your taxes. They understand your tax situation, what you need, and are willing to help.  

But what do you need to bring for your appointment? The longer it takes for an accountant to prepare your taxes, the more money it will cost you.

You might as well be prepared and ensure you have every single piece of paperwork and documentation that you need to before you walk into an accountant’s office.    

Here’s a checklist of what you should bring:  

Proper Identification 

To be safe, bring both a valid photo ID and your Social Security card. Your accountant, especially if this is the first time they’re preparing your taxes for you, will need to verify your Social Security number, the spelling of your name, and that the card you bring is in fact you. 

You will also need to bring the Social Security cards/numbers of any dependents you’re claiming and that of your spouse (if you have one).  

Copy of Your Most Recent Tax Return 

Be sure to bring your most recent tax return to the office. This gives your accountant vital information that they’ll need to file your taxes. 

Wage Statements and Income  

There are many ways to make money and only some of them come with accompanying forms. The two most common that you’ll encounter are Form W-2 and a variety of different Form 1099s.  

Check out this complete list of different wage forms you might receive (and therefore should bring to your accountant’s office):

  • Form W-2 (wage and salary income)

  • Form W-2G (gambling winnings)

  • Form 1099-A (foreclosure of a home)

  • Form 1099-B (sales of stock, bonds, or other investments)

  • Form 1099-C (canceled debts)

  • Form 1099-DIV (dividends)

  • Form 1099-G (state tax refunds and unemployment compensation)

  • Form 1099-INT (interest income)

  • Form 1099-K (business or rental income processed by third-party networks)

  • Form 1099-LTC (benefits received from a long-term care policy)

  • Form 1099-MISC (self-employment and other various types of income)

  • Form 1099-OID (original issue discount on bonds)

  • Form 1099-PATR (patronage dividends)

  • Form 1099-Q (distributions from an education savings plan)

  • Form 1099-QA (distributions from an ABLE account)

  • Form 1099-R (distributions from individual retirement accounts, 401(k) plans, and other types of retirement savings plans)

  • Form 1099-S (proceeds from the sale of real estate)

  • Form 1099-SA (distributions from health savings accounts)

  • Form SSA-1099 (Social Security benefits)

  • Form RRB-1099 (Railroad retirement benefits)

  • Schedule K-1 (income from partnerships, S corporations, estates, or trusts)

Additionally, there is a possibility you might have income that won’t be reported on a form. This includes small businesses where a client might pay you $500 for a service. You won’t have signed a form with them, but that doesn’t mean you don’t have to report the income. 

Bring proof of that income when you go to the accountant’s office. 

Real Estate Documents 

Do you own a home or piece of property? There are a lot of deductions you can take if so. You should bring any documentation that includes: 

  • A recent home purchase 

  • A home equity loan  

  • Proof of paid real estate or property taxes  

 

 Proof of Expenses

If you’re planning to itemize your deductions, you need to determine all of your expenses.  

Try to keep it organized but bring everything you think you might need. You’ll want records of: 

  • Receipts 

  • Invoices 

  • Medical bill 

  • Charitable contributions 

  • Expenses related to job-hunting 

  • Mileage logs  

  • Education expenses 

  • Self-employment expenses 

  • Gambling losses 

  • Child care expenses  

  • Moving expenses  

  • Personal property taxes  

  • Real estate tax bills  

  • And more 

Be thorough. It’s better to have more tax documents than less. 

If you want to get your deductions and credits, it’s imperative that you hand over documentation that proves your expenses. This includes receipts, invoices, medical bills, charitable contributions, IRA contributions, job-hunting expenses, mileage logs, education expenses, self-employment expenses, and more. It’s better to bring too much documentation than too little.

Direct Deposit Authorization Form or a Blank Check 

This ensures that when your accountant e-files on your behalf that they are able to directly deposit any federal or state returns. 

 

That’s it! You’re now ready to save yourself time and money by heading to your accountant’s office completely prepared. Make sure you go to a certified CPA accountant to ensure that your taxes are done properly and that you get the maximum potential return. 

You’ve found the perfect accountant for your taxes. They understand your tax situation, what you need, and are willing to help.  

 

But what do you need to bring for your appointment? The longer it takes for an accountant to prepare your taxes, the more money it will cost you.

 

You might as well be prepared and ensure you have every single piece of paperwork and documentation that you need to before you walk into an accountant’s office.    

 

Here’s a checklist of what you should bring:  

 

Proper Identification 

To be safe, bring both a valid photo ID and your Social Security card. Your accountant, especially if this is the first time they’re preparing your taxes for you, will need to verify your Social Security number, the spelling of your name, and that the card you bring is in fact you. 

 

You will also need to bring the Social Security cards/numbers of any dependents you’re claiming and that of your spouse (if you have one).  

 

Copy of Your Most Recent Tax Return 

Be sure to bring your most recent tax return to the office. This gives your accountant vital information that they’ll need to file your taxes. 

 

Wage Statements and Income  

There are many ways to make money and only some of them come with accompanying forms. The two most common that you’ll encounter are Form W-2 and a variety of different Form 1099s.  

 

Check out this complete list of different wage forms you might receive (and therefore should bring to your accountant’s office):

  • Form W-2 (wage and salary income)

  • Form W-2G (gambling winnings)

  • Form 1099-A (foreclosure of a home)

  • Form 1099-B (sales of stock, bonds, or other investments)

  • Form 1099-C (canceled debts)

  • Form 1099-DIV (dividends)

  • Form 1099-G (state tax refunds and unemployment compensation)

  • Form 1099-INT (interest income)

  • Form 1099-K (business or rental income processed by third-party networks)

  • Form 1099-LTC (benefits received from a long-term care policy)

  • Form 1099-MISC (self-employment and other various types of income)

  • Form 1099-OID (original issue discount on bonds)

  • Form 1099-PATR (patronage dividends)

  • Form 1099-Q (distributions from an education savings plan)

  • Form 1099-QA (distributions from an ABLE account)

  • Form 1099-R (distributions from individual retirement accounts, 401(k) plans, and other types of retirement savings plans)

  • Form 1099-S (proceeds from the sale of real estate)

  • Form 1099-SA (distributions from health savings accounts)

  • Form SSA-1099 (Social Security benefits)

  • Form RRB-1099 (Railroad retirement benefits)

  • Schedule K-1 (income from partnerships, S corporations, estates, or trusts)

Additionally, there is a possibility you might have income that won’t be reported on a form. This includes small businesses where a client might pay you $500 for a service. You won’t have signed a form with them, but that doesn’t mean you don’t have to report the income. 

 

Bring proof of that income when you go to the accountant’s office. 

 

Real Estate Documents 

Do you own a home or piece of property? There are a lot of deductions you can take if so. You should bring any documentation that includes: 

  • A recent home purchase 

  • A home equity loan  

  • Proof of paid real estate or property taxes  

 

 Proof of Expenses

If you’re planning to itemize your deductions, you need to determine all of your expenses.  

 

Try to keep it organized but bring everything you think you might need. You’ll want records of: 

  • Receipts 

  • Invoices 

  • Medical bill 

  • Charitable contributions 

  • Expenses related to job-hunting 

  • Mileage logs  

  • Education expenses 

  • Self-employment expenses 

  • Gambling losses 

  • Child care expenses  

  • Moving expenses  

  • Personal property taxes  

  • Real estate tax bills  

  • And more 

Be thorough. It’s better to have more tax documents than less. 

If you want to get your deductions and credits, it’s imperative that you hand over documentation that proves your expenses. This includes receipts, invoices, medical bills, charitable contributions, IRA contributions, job-hunting expenses, mileage logs, education expenses, self-employment expenses, and more. It’s better to bring too much documentation than too little.

 

Direct Deposit Authorization Form or a Blank Check 

This ensures that when your accountant e-files on your behalf that they are able to directly deposit any federal or state returns. 

 

 

That’s it! You’re now ready to save yourself time and money by heading to your accountant’s office completely prepared. Make sure you go to a certified CPA accountant to ensure that your taxes are done properly and that you get the maximum potential return. 

9 Red Flags That Could Get You Audited By the IRS

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Getting audited is not common. In fact, the IRS only audited 1 in 160 individual tax returns in 2018. A decade ago, there was an audit rate of 1 in 90.  Every year, the number of taxpayers audited has been slowly dropping

Cuts at the IRS have resulted in fewer staff members, and, as a result, fewer audits.

The more money you make, the higher the likelihood of being audited. If you’re making north of a $1 million per year, there is a 1 in 25 chance of you being audited.

There’s only a .5 – .6 % chance that you will join the ranks of the audited. The odds are low, but you don’t want to fib or flub your tax return and risk an expensive and time-consuming audit process.  That percentage still puts about 1 million taxpayers on the hook each year. Here are 8 ways you could become one of them.

Claiming Home Office Deductions   

In order to claim home office deductions, you need to ensure that the area you’re dedicating is only used for business.

Claiming a home office deduction means you can prorate some of your household expenses like:

  • Utility bills

  • Homeowner’s association fees

  • And more

This is done on a fractional basis,  based on the percentage of your home that the home office space takes up.

It is also an area that is often abused, which is why claiming home office deductions can be risky business.

Giving a Lot to Charity  

If you’re giving too much to charity, then the IRS will question the validity of your donations. They know how much those who make the same amount you do and giving too much will often signal that something fishy is at play.

Be sure to keep all receipts and records for your charitable donations. It’s recommended to write checks for charitable donations, which are much harder to falsify than other forms of donation.

Using Digital Currencies 

This one is a little newer. The government is looking for those that aren’t reporting income from cryptocurrencies.

Sure, it’s not the US dollar, but the government still wants to know what you’re making from it. Failure to report crypto income could result in worse than an audit, it could lead to a large fine ($250,000) or prison time.

Not Reporting Taxable Income  

This one is simple. Be sure to provide the IRS with every 1099 and W-2 from every job you’ve had this year.

Just because you don’t send one in, doesn’t mean that the IRS doesn’t know about them. A copy of all your tax forms are sent to the IRS, so you can’t just pretend certain jobs didn’t exist.

They’re looking for those participating in businesses that operate in large amounts of cash and those working in the gig economy.

Deducting Entertainment, Meal, and Travel Costs  

You can’t claim entertainment costs on your taxes anymore, so don’t try. You can still deduct travel and meal costs, but you need to be very clear with your records in order to stay in the clear with the IRS. We recommend recording:

  • Amount spent

  • Location

  • A list of those that attended

  • The business purpose of the meeting

Keep receipts for any meal or travel costs that are over $75.

Claiming Losses   

Claiming losses of any kind on your tax ups the chances that you’ll get audited.

Some types of losses include:

  • A business that reports losses for 3 years – this makes the IRS view your business as a hobby

  • Rental losses – Find a tenant that stays and pays

  • Stock market losses

Claiming these types of losses and others could be a red flag that gets your business audited.

Filing a Form 5213  

This form basically tells the IRS to not audit you for the first 5 years of your businesses’ life. It can help you transition from a hobby to a business, but once the 5 year period is up, you’re now under the microscope.

Be aware of this if you have already filed this form or are considering it.

Having Bank Accounts in Other Countries 

It’s not a crime to have bank accounts in other countries, but it is a common tactic for those attempting to hide income from the IRS.

Don’t do it.

If you have foreign bank accounts, be sure to report any that combined have an excess of $10,000+ anytime in the prior year. You can do this electronically or with an IRS Form 8938 if you have an account with far more than $10,000 in them.

Falsifying Tax Form or Making Errors  

If you file your taxes with a preparer that the IRS knows has falsified taxes, you might be on the hook instead of the CPA you hired.

Additionally, basic math errors are another type of issue that could draw the attention of an IRS agent. Use a tax preparing software or a trust tax preparer to negate any of those sorts of issues.

Your chances of being audited are low. But why take the risk? Some of the red flags on this list are unavoidable if you’re filing your taxes properly. Others are completely avoidable.

To cover yourself, hire a tax professional that will not only ensure that your taxes are done properly, but also will represent you if you are one of the million taxpayers that are audited each year.

3 Tax Benefits for New York Veterans

Current and former members of the military are eligible for certain tax exemptions.

“These exemptions and credits are one small way we can show our gratitude to the brave and dedicated individuals who currently serve or have served in our military,” said Acting Commissioner of Taxation and Finance Nonie Manion in a 2017 press release.

Photo by Benjamin Faust on Unsplash

Photo by Benjamin Faust on Unsplash

In today’s post, we’ll examine a handful of the exemptions available for New York veterans.

Property Tax 

As many as half a million New York veterans benefit from property tax exemptions, many of which are offered by local governments.

Depending on the circumstance, the property tax burden of a wartime veteran could be up to 15% or even as high as 25% if the veteran serves in a combat zone.  Cold War veterans (between 1945 and 1991) could see up to 15% in exemptions.

If the veteran was disabled in the line of duty, they could see up to 50% off in exemptions.

How do these property tax exemptions work?

In September 2017, Gov. Cuomo signed a bill that allowed the 679 school districts the option to allow exemptions for Cold War veterans for the entirety of the time the veteran owns the property. Prior, it was 10 years.

To find out which of these exemptions applies to you, you’ll need to contact your local assessor’s office. Visit NYS’s Municipal Profiles website to get the contact information you need.

Military Pay  

If your permanent home was in NYS before you entered the military, you don’t have to pay income tax on your active-duty pay. But it isn’t quite that simple.

You have to meet ALL three of the following conditions:

  • Didn’t have a permanent home in NY

  • Maintained a permanent abode outside of NY (this excludes military quarters like barracks, BOQ, etc.)

  • Spent less than 30 days in New York during the year

Basically, you need have not lived in New York almost at all for the entirety of the year to be eligible for this perk. You also had to be living somewhere off-base/ship to not owe income taxes.

Hire a Veteran Credit 

There are two types of hire a veteran credit. They are:

  • Corporations subject to franchise tax

  • Individuals, estates and trusts under personal income tax laws

This credit applies if you or your business:

  • Hires a qualified veteran before January 1, 2020

  • Employees the qualified veteran for 35 hours

If the veteran is disabled, the credit is 15% of the total wages paid during the first full year of employment. That amount can’t exceed $15,000 per veteran.

If the veteran isn’t disabled, the credit is10%  of the total wages paid during the first full year of employment. For nondisabled veterans, the credit is capped at $5,000.

These are just a handful of the tax benefits, credits, and exemptions that veterans can take advantage of. Reach out to one of our tax professionals and we’ll ensure you’re getting the most tax benefits from your service.

 

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.