Work Opportunity Tax Credit – Employing Veterans

Posted on February 10, 2012 | Comments Off on Work Opportunity Tax Credit – Employing Veterans

Have you employed veterans since November 22, 2011 or do you plan to employ veterans in 2012?

If so you may be entitled to a generous tax credit called the Work Opportunity Tax Credit worth up to $9,600 per veteran ($6,240 for tax exempt organizations).

Recently the IRS announced extensions for filing some of the required paper work to claim the credit. So, if you missed the original deadlines you may still be able to claim the credit.

The Work Opportunity Tax Credit is targeted at veterans who have been unemployed, are receiving assistance such as food stamps or entitled to service connected disability assistance. During your job application screening and interviews you will want to keep an eye out for veterans that have applied so that you can spot if they may qualify you for the tax credit.

To claim the credit it is vital that you start planning before you even offer a job to a veteran. Some of the paper work needs to be completed on or before the date a job offer is made. Unless you have prior experience of claiming the credit it would be sensible to get professional advice and assistance from your tax adviser at an early stage.

There is a multi-step process to claim the credit as outlined here:-

  1. Complete form 8850 – Pre Screening Notice, on or before date of job offer.
  2. Complete form 9061 – Individual Characteristics Form. This will also need supporting documentation such as discharge papers, birth certificates, benefit entitlements etc.
  3. Submit the forms 8850 and 9061 to your State Workforce Agency so they can certify that the veteran will qualify you for the credit. This normally needs to be submitted within 28 days of the veteran starting work. For veterans employed from November 22, 2011 to May 21, 2012 the deadline has been extended to June 19, 2012.
  4. Keep records of the wages you paid the veteran and hours they worked.
  5. When preparing your year end income tax return claim the credit on form 5884 Work Opportunity Credit and form 3800 General Business Credit. If you are a non-profit organization the credit is claimed on form 5884-C.

The process is involved and there are some strict and tight deadlines to follow to qualify for the Work Opportunity Tax Credit. However if you are employing veterans in 2012 claiming the credit could benefit your tax position considerably.

This article has given an outline of the Work Opportunity Tax Credit. There are detailed qualifying conditions and varying credit amounts for different types of veterans so obtain professional advice before claiming the credit.

For assistance with claiming the Work Opportunity Tax Credit call (480) 363-4808 to book an appointment.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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Key Tax Dates – February 2012

Posted on February 8, 2012 | Comments Off on Key Tax Dates – February 2012

Here are some key tax dates for your diary.

February 2012
10th – Employees need to report to their employer tips earned in January of more than $20
15th – File a new W-4 with your employer if you claimed exemption from withholding in 2011 and want to continue with exemption
15th – 1099-B should be received from your broker – broker can apply for extension so 1099-B may not arrive until March
20th – Chandler Sales Tax Return needs to be filed
21st – Arizona Sales Tax Return needs to be filed

If you have a corporation start getting your accounting information together and schedule appointment with your tax preparer to have your 1120 US Corporation Income Tax Return or 1120S US Income Tax Return for a S Corporation prepared. For calendar year returns the filing deadline is March 15, 2012.

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Tax Year End Accounting Checklist

Posted on February 8, 2012 | Comments Off on Tax Year End Accounting Checklist

As you get ready to send off your accounting information to your tax preparer have a look at this year end accounting checklist. Check off these items to help you get the best tax position from your tax return preparation.

  • Enter all transactions for the tax year (for most people that will be up to December 31)
  • Reconcile all bank and loan accounts
  • If you use QuickBooks® make sure the Undeposited Funds Account shows the correct balance
  • Reconcile all petty cash accounts
  • Reconcile customer account balances to the accounts receivable control account
  • Go through your customer account balances to identify any bad debts
  • Reconcile supplier account balances to the accounts payable control account
  • Go through your supplier account balances and clean up old or unusual balances
  • Make sure all payroll and sales tax liability accounts show the correct balance
  • Make sure all fixed asset purchases and disposals have been correctly recorded and can be readily identified in the accounting records
  • Scan through the profit and loss account for any unusual income or expenses items and make sure they are recorded correctly
  • For expenses such as repairs, travel, entertainment and sundry make sure there is sufficient detail in the accounting records for your tax preparer to determine the correct tax treatment
  • Scan the balance sheet for unusual balances and make sure they are recorded correctly
  • If you use QuickBooks® make sure the tax mappings are correct

Your time is valuable and you would much rather be running your business than preparing year end accounting information. If that is you we can help you by finalizing your year end accounts making sure all the above items are covered. If you would also like the convenience of an all in one service we can prepare your business and individual tax returns as well.

Call (480) 363-4808 to book an appointment. We will come to you in the Phoenix metro area. If you live elsewhere we can finalize your accounts using our secure client portal and remote access.

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Form 8938 Statement of Specified Foreign Financial Assets

Posted on January 24, 2012 | 2 Comments

If you have significant foreign financial assets you may have to file with your income tax return, form 8938, Statement of Specified Foreign Financial Assets. This is a new form starting with the 2011 tax year and is part of the United States Government’s continuing efforts to contain tax evasion and avoidance in respect of foreign assets owned by United States citizens and residents. If this form applies to you it would be advisable to obtain professional advice given the increasing complexities of reporting foreign transactions on United States income tax returns.

Whilst form 8938 needs to be filed by United States citizens and residents we are particularly focusing this article on Green Card holders. Green Card holders are quite likely to have some assets in and continuing income from their home country.

Before you decide to not read on any further be aware that there are serious penalties for failing to file a required form 8938. The basic penalty for failing to file the form is $10,000 going up to a maximum of $50,000 for continuing failure to file. Also if you fail to report income from the foreign financial assets the IRS will have up to six years to assess the tax rather than the normal three years.

So, on to the requirements for the form.

If you are living in the United States Form 8938 needs to be filed if the value of your foreign financial assets exceeds the following limits:-

  • $50,000 at end of year or more than $75,000 in year (single and married filing separate)
  • $100,000 at end of year or more than $150,000 in year (married filing joint)

There are higher limits if you do not live in the United States.

What are foreign financial assets?

These include:-

  • Any financial account maintained by a foreign financial institution
  • Stocks or securities issued by someone other than a US person
  • Any interest in a foreign entity held for investment
  • Any financial instrument or contract that has an issuer or counter party that is someone other than a US person.

The definition of a financial asset is wide ranging and catches all the obvious assets that you may hold overseas back in your home country such as:-

  • Bank accounts
  • Mutual funds such as unit trusts
  • Stock holdings
  • Pension funds

The big one for Green Card holders could well be the pension funds. A lot of Green Card holders will have left their pension funds in their home country and the value of these alone could take you over the filing limits for form 8938. Note that a state pension like the US social security is not included in the value.

If you are required to file form 8938 for your foreign financial assets the information you enter on the form includes the name of the asset, account or identifying number, address, maximum value in the year and how much income from the asset you have reported on your United States income tax return.

If you are already reporting any foreign financial assets on other income tax return forms you do not need to report the detailed information on form 8938 just note that you are filing another form. If the asset is reported on another form its value must still be included to determine if you need to file a form 8938.

There are other conditions and requirements that we have not covered in this article so make sure that you get advice from your tax preparer to see if you need to file form 8938.

One final point, filing form 8938 does not stop the requirement to file form TD F 90-22.1, otherwise known as the FBAR. This form still needs to be filed with the US Treasury by June 30 each year if you have certain financial accounts exceeding $10,000 in value.

The IRS has a useful comparison chart showing the differences between the two reporting requirements and which assets are covered by each form. This confirms that directly held foreign real estate is not reportable on the form 8938.

If you would like assistance with filing your form 8938, Statement of Specified Foreign Financial Assets, with your income tax return call us on (480) 363-4808 to book an appointment. If you live in Phoenix Metro area, AZ we will come to you to prepare your income tax return. If you live elsewhere we can prepare the tax return using information you upload to our secure client portal or mail to us. We look forward to helping you prepare your income tax return and helping you file form 8938.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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Useful Arizona Tax Credits

Posted on January 18, 2012 | Comments Off on Useful Arizona Tax Credits

As you get ready for this year’s tax preparation here is a reminder about three useful Arizona tax credits you maybe able to claim on your Arizona state income tax return. If you have any of the transactions discussed below collect the supporting documentation together and give it to your tax preparer so they can check if you qualify for the credits.

In summary the three types of transactions are:-

Credit for Contributions to Charities That Provide Assistance to the Working Poor

A long winded title, but in essence this gives a credit for cash donations to certain charities. The benefit of this credit is that it gives you a dollar for dollar reduction in your Arizona tax whereas claiming the donation on Schedule A as an itemized deduction only saves you tax at your marginal tax rate.

The amount and qualifying conditions are:-

  • You must claim itemized deductions on Schedule A – if you take the standard deduction you cannot claim the credit.
  • The credit is worth up to $200 for single and head of household filers, and $400 for married filing joint filers.
  • If the credit is more than your Arizona tax you can carry forward the surplus for up to 5 years.
  • The donations must be in cash.
  • Only certain charities qualify. To see if the charity you gave the donation to qualifies, visit the AZDOR Working Poor Tax Credit page.

Credit for Contributions Made or Fees Paid to Public Schools

This is a credit available if you pay for certain school activities for your children. The credit gives you a dollar for dollar reduction in your Arizona tax which is a very beneficial way of getting tax relief for the payments. To claim the credit you will need to get a receipt from the school which will show the required information for the claim.

The amount and qualifying conditions are:-

  • You must make contributions or pay fees for extra curricular activities or for character education programs. Examples would be band uniforms, equipment for sports events, scientific equipment or trips for competitive events.
  • The payments must be to a public or charter school in Arizona providing education up to grade 12.
  • The credit is worth up to $200 for single and head of household filers, and $400 for married filing joint filers.
  • If the credit is more than your Arizona tax you can carry forward the surplus for up to 5 years.

Credit for Contributions to Private School Tuition Organizations

This is a credit available if you make contributions to a private school tuition organization that provides scholarships or grants to qualified schools. The credit gives you a dollar for dollar reduction in your Arizona tax which is a very beneficial way of getting tax relief for the payments. To claim the credit you will need to get a receipt from the tuition organization which will show the required information for the claim.

The amount and qualifying conditions are:-

  • You must make contributions to a qualifying organization. To see a list of organizations that qualify see the list maintained by AZDOR.
  • As a condition of making the contribution you must not designate it for the direct benefit of your own child or any other named student.
  • The credit is worth up to $503 (was $500) for single and head of household filers, and $1,006 (was $1,000) for married filing joint filers.
  • If the credit is more than your Arizona tax you can carry forward the surplus for up to 5 years.

Note that you can also claim for contributions you make in the period January 1 to April 15 after the end of the tax year.

These credits are worth claiming so if you have the documentation make sure that your tax preparer does not miss out on the claims.

Once you are ready to prepare your federal and Arizona income tax returns call us on (480) 363-4808 to book an appointment. If you live in Chandler, Tempe, Mesa, Gilbert or Queen Creek, AZ we will come to you to prepare your income tax return. If you live elsewhere we can prepare the tax return using information you upload to our secure client portal or mail to us. We look forward to helping you prepare your income tax returns and maximize your Arizona tax credits.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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Green Card Holders and US Income Tax Returns

Posted on January 17, 2012 | Comments Off on Green Card Holders and US Income Tax Returns

If you have recently received a Green Card through marriage you have some extra issues to consider with the first US income tax return you prepare after receiving the Green Card. This is a complex area of the US Tax Code so you would be well advised to get professional advice to make sure that you get the best tax position. This article will give you an outline of the issues involved so that you will be able to understand the work done by your tax preparer.

As a general rule a Green Card holder is treated as a US resident for tax purposes and needs to file a US Income Tax Return each year. After the first return this will usually be straight forward and will include worldwide income for the year. Remember that foreign income needs to be reported on the US income tax return. So if you still have income in your home country you need to report that on the US tax return. Depending on the tax treaty with your home country and the US tax rules you may get some relief to make sure that you don’t get taxed twice on the same income. Once in your home country and again in the US. Your tax preparer will be able to check that for you.

The first US return you are required to file after receiving a Green Card through marriage is a bit more complicated. Often in this situation you will have been living outside of the US for the early part of the year and living in the US for the latter part of the year. In this situation you are called a Dual Status Alien. This means that for tax purposes you were non resident for the early part of the year and resident for the latter part.

By default a Dual Status Alien who is married cannot file a joint tax return with their spouse. This creates complications such as both spouses needing to itemize on their separate returns because the Dual Status Alien cannot have a standard deduction. As the couple have to file separate they may lose tax credits, particularly if they have children. On the plus side the Dual Status Alien will only be reporting worldwide income for the part of the year they were resident in the US.

To get round these complications the couple can elect for the Dual Status Alien to be treated as a US resident for tax purposes for the whole of the year. With this election a joint return can be filed with the proviso that all of the Dual Status Alien’s worldwide income for the year will need to be reported on the return. There may be some relief for not taxing some foreign earned income.

To work out whether the election is beneficial your taxes need to be worked out both ways, married filing separate and married filing joint. Your tax preparer will do these calculations for you. There is no standard answer to which way is best. Some of the factors that affect the decision include:-

  • Date of arrival in the US/getting the Green Card
  • Amount of foreign earned income
  • Amount of foreign investment income
  • Whether you live in a community property state
  • Are dependents such as children claimed

The way your state taxes your income will also be a consideration on how you wish to be treated in the first year. Some states don’t require you to follow the same filing status as the federal tax return which may benefit you.

This article only covers the broad issues that may affect you. As this is a complicated area of the US tax law make sure that you get professional advice before filing any income tax return affected by these rules.

If you are a green card holder and have more questions or want assistance with the preparation of your US income tax return call me on (480) 363-4808 to book an appointment. If you live in Chandler, Tempe, Mesa, Gilbert or Queen Creek, AZ I will come to you to prepare your income tax return. If you live elsewhere I can prepare the tax return using information you upload to my secure client portal or mail to me. I look forward to helping you prepare your income tax return.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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Education Credits and Deductions

Posted on January 16, 2012 | Comments Off on Education Credits and Deductions

Education credits and deductions can be surprisingly complicated. Not only are there up to four different ways of claiming a deduction or credit for education expenses on your income tax return, you also have to consider who will claim the credit. Plus, you need to consider how the claim will affect your state income tax return.

Make sure that your tax preparer has considered all the available options and chosen the one that gets you the best tax position, whether it be a better tax refund or lower tax payable.

The four main ways to claim education expenses are:-

  • American Opportunity Credit – For most people at college or with children at college this is the most beneficial of the credits as up to 40% of the credit may be refundable even if you have no net tax due. The maximum benefit of the other ones is the net tax due. It is only available for the first four years of post secondary education, so basically it is for undergraduates. Up to $4,000 of expenditure can be claimed per year per student, giving a maximum credit of $2,500. Unlike some of the other claims the expenditure can include equipment such as computers, books and supplies even if not purchased from the education institution.
  • Tuition and Fees Deduction – This can be claimed for education expenses paid for higher education up to a maximum of $4,000 across all students per return. This deduction will often be beneficial for tax payers with higher marginal tax rates or high state tax rates.
  • Lifetime Learning Credit – This one may be a beneficial claim for those that are claiming work related education expenses as it does not require you to be studying for any recognized education credential. The maximum expenditure to be claimed is $10,000 across all students per return with a maximum credit of $2,000.
  • Work Related Deduction on Schedule A – This is usually the last resort claim because it is only claimed on Schedule A which requires you to be itemizing rather than claiming the standard deduction. It also is part of the category of expenses that must exceed 2.5% of your adjusted gross income before you get any tax benefit.

Note that there are other qualifying conditions for each claim such as Adjusted Gross Income limits and whether the education expenses are paid for with scholarships or grants. Your tax preparer will go through these with you.

Who claims the deduction or credit varies for each claim and often hinges around who claims or could claim a dependent. This is particularly relevant for parents with children at college. They may automatically assume the children are still their dependents but this is not always the case. The tax preparer will need to work through the detailed rules to see if they are a dependent and whether the parent or student should claim the education expenses.

Also, be careful with the American Opportunity Credit to make sure all the qualifying conditions have been satisfied and the correct person is claiming the credit. The IRS has already identified a large number of invalid claims for the first two years that this credit has been available. You do not want to be in the position of repaying the credit to the IRS together with penalties and interest.

As you can see each possible claim has different qualifying conditions and different impacts on the tax return which is why each possible claim needs to be checked to see which one is the best for you.

If you have any education expenses for you or your children to claim and are ready to prepare your income tax return call us on (480) 363-4808 to book an appointment. If you live in Chandler, Tempe, Mesa, Gilbert or Queen Creek, AZ we will come to you to prepare your income tax return. If you live elsewhere we can prepare the tax return using information you upload to our secure client portal or mail to us. We look forward to helping you prepare your income tax return.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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Wages, Salaries & Tips

Posted on January 12, 2012 | Comments Off on Wages, Salaries & Tips

As your tax preparer starts the preparation of your income tax return you probably think that wages and salaries are some of the easier items to enter on the tax return. However, even the basic W-2 can offer some surprises. Here are some tips and reminders of things to watch out for and let your tax preparer know about if they apply to you.

Starting at the beginning, you should get a W-2 from each employer you worked for during the year. These will be issued to you by January 31 after the end of the tax year. Make sure that your employers have the most up to date address for you. As a general rule you need a W-2 to file your tax return if you have earned income, you cannot use pay stubs. There is a limited exception that allows you to use pay stubs but only after you have tried to get a W-2 from the employer and you cannot use the exception until later in the filing season. Your tax preparer can advise you on what to do if this applies to you.

Once you get the W-2s check them to make sure they look correct. Is the name and SSN correct. Does the income look like the amount you were paid. If you have any queries ask your employer and get them to correct the W-2 before you prepare and file your tax return.

In some situations you may not get a W-2 for earned income but will still need to report that income on your income tax return. Here are some that may apply to you:-

  • Foreign Wages and Salaries – If you worked overseas you need to report the income even though if it is a foreign employer you don’t get a W-2 from them. Remember, if you are a US Citizen or Resident (includes Green Card holders) you need to report your Worldwide income on the tax return. Your tax preparer will let you know if you qualify to apply the Foreign Earned Income Exclusion to reduce the amount of foreign earned income that is taxed.
  • Tips – If you received tips during the year and did not report them all to your employer then you need to include those as part of your earned income. Try to keep a tip book where you record the tips you receive each day so that you have evidence to show the IRS if your return is audited. Give your tax preparer a summary of the tip book so that they can work out the correct amount to enter on your tax return.
  • Household Employee – If your earnings as a household employee were less than $1,700 the employer may not have issued a W-2. The amount you received needs to be entered as wages on the tax return.
  • Scholarship and Fellowship Grants – If these are not reported on a W-2 they may still be taxable if they are not used for education expenses such as tuition and course fees. Your tax preparer will be able to work out how much of the grants needs to be entered on the tax return as earned income.
  • Dependent Care Benefits or Adoption Benefits – If you have entries in box 10 of your W-2 or box 12 with code T your tax preparer will need to complete some additional tax forms for you to work out if any of these benefits are taxable.

One final point on W-2s. If the Statutory Employee box 13 is checked and you have business expenses to claim then the W-2 income and the expenses should be reported on a Schedule C. This will apply to full time life insurance salespeople, some agent and commission drivers, traveling salespeople and some homeworkers.

If you have all of your W-2s and are ready to prepare your income tax return call us on (480) 363-4808 to book an appointment. If you live in Chandler, Tempe, Mesa or Gilbert, AZ we will come to you to prepare your income tax return. If you live elsewhere we can prepare the tax return using information you upload to our secure client portal or mail to us. We look forward to helping you prepare your income tax return.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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Earned Income Credit

Posted on January 11, 2012 | Comments Off on Earned Income Credit

If you satisfy certain conditions you may qualify for a beneficial tax credit called Earned Income Credit (EIC). In this article we give an outline of the credit so that you have a better understanding of why your tax preparer is asking you certain questions. It will also draw your attention to certain areas to make sure that during the preparation of your income tax return you don’t miss out on any credit you are entitled to.

EIC can be worth up to $5,751 (2011 Tax Year) as a refundable tax credit. That means you get hard cash back even if you have no taxable income. However, the rules to claim EIC are quite complex so your tax preparer will need to ask you quite a few questions to make sure that you qualify and get the best credit for your circumstances.

In summary these are the key qualifications to claim Earned Income Credit:-

  • You must have earned income, i.e. wages or self-employment
  • Your earned income and adjusted gross income must be less than:-
    • $43,998 ($49,078 married filing jointly) – 3 or more qualifying children
    • $40,964 ($46,044 married filing jointly) – 2 qualifying children
    • $36,052 ($41,132 married filing jointly) – 1 qualifying child
    • $13,660 ($18,740 married filing jointly) – no qualifying children
  • Investment income must be less than $3,150
  • If you have no qualifying children you must be aged over 25 and under 65
  • You cannot use the married filing separate filing status
  • You must have a valid Social Security Number

There are some other conditions to be satisfied as well which your tax preparer will cover as they ask you questions about you and your family. Be open when answering the questions and give full information. It is easy to miss things like qualifying children if your tax preparer does not have all the information and you may miss out on a tax credit.

Also bear in mind that there are heavy penalties for filing an incorrect EIC claim. Not only will the credit need to be paid back plus penalties and interest you may also be banned from claiming EIC for up to 10 years.

One final point to remember is that if you failed to claim EIC in the last three years it is not too late to claim. In general you have until three years after the date you filed a return to submit an amended return to claim the credit. For example for most taxpayers an amended return for 2008 needs to be filed by April 15, 2012.

If you think you qualify for Earned Income Credit call us on (480) 363-4808 to book an appointment to prepare your tax return. If you live in the Phoenix area we will come to you to prepare your income tax return. If you live outside of Phoenix or Arizona we can prepare the return using information you upload to our secure client portal or mail to us. We look forward to helping you prepare your income tax return and claim your EIC.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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Getting Ready For Your Tax Preparer

Posted on January 10, 2012 | Comments Off on Getting Ready For Your Tax Preparer

Your income tax documents will soon be arriving and it will be time for your tax preparation to start. Here are some tips to make the process of preparing your income tax return easier and to get the best value from your tax preparer.

In considering these tips one overriding fact to bear in mind is that your tax preparer will be able to give better and more comprehensive tax advice the more information and documents you can get ready before seeing them. Also your fees may be lower depending how your tax preparer charges for their services.

  1. Be Patient –We all want to get our tax refund quickly but some of your tax documents may take awhile to arrive. Most forms will arrive around about January 31 but as you will see below some may not arrive until early April.
  2. Tax Organizer –If your tax preparer has a tax organizer fill in as much of it as you can. It will remind you of items to claim that you may not have considered. Our tax organizer is downloadable and can be filled in on screen. It can then be saved and uploaded to our secure client portal saving you time and paper.
  3. Salaries & Wages – You will need a W-2 for each job you had in the tax year. If you moved during the tax year make sure that your current and former employers know your latest address.
  4. Business Income – If you run a business you will need to bring your records up to date and have them finalized for the tax year. If your tax preparer, like us, also does accounting work you can ask them to do that for you. Depending on your business structure you may also have business tax returns to prepare such as a partnership tax return or corporate tax return. If somebody else looks after the books you may get a Schedule K-1 from them showing the business income. This may not turn up until early April as it does not need to be issued until April 15.
  5. Retirement Income – For your retirement income look out for forms 1099-R, 5498 and SSA-1099.
  6. Investment Income – For your interest income look out for 1099-INT. This will only be issued if the interest income was more than $10 for an account. So, for any interest less than that go through your bank statements and add up the interest for the year. For dividend income you will be looking out for 1099-DIV and for sales of stock 1099-B. The 1099-B is not due until February 15 and most brokers have an automatic 30 day extension. So you may not see these forms until well in to the tax filing season.
  7. Deductions and Tax Credits- Make sure that you maximize your deductions and tax credits so that you get the best tax refund or least amount of tax payable. Go through your bank records, receipts and any tax forms and schedule them out so that your tax preparer can get the best tax position for you. Some items to consider are:-
    • Mortgage Interest – You will get a 1098 from your mortgage company showing the interest paid in the tax year.
    • Real Estate Taxes Paid – This will often be shown on your mortgage interest 1098. If it isn’t many local municipalities allow you to download details of the taxes paid from their web site.
    • Medical Expenses – For any medical expenses not covered by insurance, FSA or HSA add them up for the year. Include all doctor visits, dental treatment, prescriptions and eye wear. Also don’t forget to record your mileage for medical journeys.
    • Charity Donations – Collect together all the receipts you have for cash or non-cash donations. To claim these you will at a minimum need a bank or cash record for the donation.
    • Work Related Expenses – If your employer did not reimburse you for work related expenses you may be able to claim them. Total up mileage for business journeys, hotel expenses, business meal and entertainment expenses, tools and training expenses.
    • Child Care Costs – If you paid somebody to look after your children whilst you worked you may be able to get a credit for the expenses. Get a receipt from the child care provider showing their name, address, tax identification number and amount you paid in the tax year.
    • Education Credits – If you or your children went to college during the year there may be some beneficial education credits to claim for the tution fees. Most colleges send out a 1098-T showing these costs. However these statements are often not very accurate so download a copy of your account from the college so that your tax preparer can maximize the education credit claim.

This gives you some ideas of the information to collect that will make your tax preparation experience as pain free as possible.

Once you have all your tax documents and information together call us on (480) 363-4808 to book an appointment to prepare your tax return. If you live in the Phoenix area we will come to you to prepare your income tax return. If you live outside of Phoenix or Arizona we can prepare the return using information you upload to our secure client portal or mail to us. We look forward to helping you prepare your income tax return.

Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.

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