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:
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?
All contributions must be made to qualified charitable
organizations.
How does getting married affect my
taxes?
When you get married you will have the option of filing a
joint tax return. In this case the one return will report the
income and deductions of both spouses. The IRS has eliminated
most cases where you would have saved taxes by remaining
single. You also have the option to file as married filing
separately, but in most cases this will increase your
taxes.
Do I have to file a joint return with my
spouse?
No, you can file either as married filing joint or married
filing separate. If you file separately your taxes will most
likely be higher. Many credits—such as earned income,
education (Hope and lifetime learning), and child
care—are not allowed when you file separately.
There are special circumstances where people who are married
but either do not want to or cannot file with their spouse
can file as Head of Household, which therefore entitles them
to these credits and a lower tax bracket. In order to qualify
as a Head of Household you must meet the following
conditions
§
You lived apart from your spouse for the last six months of
the tax year.
Temporary absences for special circumstances, such as for
business, medical care, school, or military service, count as
time lived in the home.
§
You filed a separate return from your
spouse.
§
You paid over half the cost of keeping up your home for
2008.
§
Your home was the main home of your child for over half of
the year.
§
You can claim this child as your dependent.
If you do not meet all these conditions but are legally
separated as of the last day of the year, you may also
qualify to file as single.
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.
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.
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.