How do I find out about my refund?
The best way is to use the Check Your Refund link from the Resources pages of my 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.accountantsofficeonline.com/Editor/web/
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 2009, you can make contributions from January 1, 2009 through April 15, 2010.
What are the differences between a Roth and a conventional IRA?
A traditional IRA lets you deduct contributions in the year you make them, and the distributions are included as income on your return when you withdraw from the IRA after reaching age 59½. A Roth IRA does not let you deduct the contributions, but you also do not report the distributions as income, no matter how much the Roth account has appreciated. With a Roth, you can exclude the income earned in the account from being taxed.
What are the consequences of early withdrawals from my retirement plans?
There is a 10% penalty on the taxable amount. The main exceptions that let you withdraw money early without penalty are as follows: • Qualified retirement plan distributions if you separated from service in or after the year you reach age 55 (does not apply to IRAs). • Distributions made as a part of a series of substantially equal periodic payments (made at least annually) for your life or the joint lives of you and your designated beneficiary. • Distributions due to total and permanent disability. • Distributions due to death (does not apply to modified endowment contracts) • Qualified retirement plan distributions up to (1) the amount you paid for unreimbursed medical expenses during the year minus (2) 7.5% of your adjusted gross income for the year. • IRA distributions made to unemployed individuals for health insurance premiums. • IRA distributions made for higher education expenses. • IRA distributions made for the purchase of a first home (up to $10,000). • Distributions due to an IRS levy on the qualified retirement plan. • Qualified distributions to reservists while serving on active duty for at least 180 days.
Are there plans with tax savings for college?
The main plans for saving for college are the 529 plans and the Coverdell plan.
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 is a Coverdell Plan?
A Coverdell Education Savings Account (ESA) is an account created as an incentive to help parents and students save for education expenses. You do not get any deductions for the account but any income earned in it is tax-free. To be exempt from tax, distributions from an ESA must be used for qualified education expenses, such as tuition and fees, required books, supplies and equipment, and qualified expenses for room and board. Coverdell distributions can be used to pay for private schools from grades K-12 in addition to college.
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.
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.
I donate my time and drive for charity wearing a uniform. What may I deduct?
If you drive to and from volunteer work, you may deduct either the actual cost of gas and oil or a standard amount of 14 cents per mile. Please note that any mileage reimbursement in excess of 14 cents per mile must be treated as income. You may also deduct the cost of buying and cleaning uniforms if the uniforms are not suitable for everyday use, and you must wear them when volunteering. You may not claim a deduction for the value of your time.
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.
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.
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.accountantsofficeonline.com/Editor/web/. If you determine you should have filed, contact me and I 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.
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 my attention.