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I need help with filing my tax returns. What documents will your firm need from me?
How do you charge your fee? We assign a billing rate to every individual in our firm, based on their education and skill level. A project may require only one or several members of the staff, depending on the work involved. We also add a technology charge since technology is an integral part of what we do. To determine the cost of the project, we add the following
Payment is expected upon completion of service.
Can you give some useful tax preparation tips for individuals? When it comes to your taxes, earlier is better. As an early filer, you will not only avoid last minute rushes, but also get a faster refund.
Here’s what you can do before your April 15 deadline:
I’ve just discovered an error after filing my individual tax return. What should I do? The IRS will usually correct calculation errors, or request a missing form (like W-2s) or schedule. If that’s what happens, you don’t have to amend your return. However, you will need to file an amended return if any of the following were reported incorrectly:
To do so, use Form 1040X, Amended U.S. Individual Income Tax Return, to correct a previously filed paper or electronically-filed Form 1040, 1040A, or 1040EZ return. Make sure that you enter the year of the return you are amending on top of Form 1040X.
Use a separate 1040X for each year if you are amending more than one tax return, and mail each in a separate envelope to the IRS processing center for your state. The address for the centers is listed in the 1040X instructions.
If the changes involve another schedule or form, attach it to the 1040X. For instance, if you are filing a 1040X because you have a qualifying child and now want to claim Earned Income Tax Credit, you must complete and attach a Schedule EIC to the amended return.
You must file Form 1040X to claim a refund within three years from the date of filing of your original return, or within two years from the date you paid the tax, whichever is later.
I can’t meet my April 15 tax deadline. What should I do? If for some reason you can't meet the April 15 deadline to file your tax return, you can get an automatic six-month time extension from the IRS. This will give you the extra time you need to get the paperwork into the IRS, but it does not extend the time you have to pay any tax due. That means you will owe interest on any amounts not paid by the April deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.
To get the automatic extension, file Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return, with the IRS by the April 15 deadline, or make an extension-related electronic payment. You can file your extension request by phone or mail the paper Form 4868 to the IRS.
I’m planning to donate to charity, so it’ll naturally be tax deductible. Right? Not necessarily. To be tax deductible, your contributions must be made to qualified organizations. You can get this information either from the organization itself (they will tell you whether they are qualified and if donations to them are deductible), or from IRS‘s exempt organization search feature. IRS Publication 78, Cumulative List of Organizations, lists all charitable organizations except the ones that were most recently granted tax exempt status.
I am thinking of selling my home. How will that affect my tax returns? You may be able to exclude up to $250,000 of gain ($500,000 for jointly filing married taxpayers) from your federal tax return. This exclusion is allowed each time you sell your main home, but generally not more frequently than once every two years.
To be eligible for the exclusion, your home must have been owned by you and used as your main home for at least two out of the five years prior to its sale. You must also not have excluded gain on another home sold during the two years before the current sale.
If you and your spouse file a joint return for the year of sale, you can exclude the gain if either of you qualify for the exclusion. However, both of you would have to meet the use test to claim the maximum $500,000.
To exclude gain, a taxpayer must both own and use the home as a principal residence for two of the five years before sale. Short absences like summer vacations count as periods of use, but longer breaks like one-year sabbaticals do not.
If it so happens that you do not meet the ownership and use tests, you may be allowed to exclude a reduced maximum amount of the gain realized on the sale of your home if you sold your home due to unforeseen circumstances such as health related problems or a change in place of employment, etc. Unforeseen circumstances also include divorce or legal separation, natural or man-made disaster resulting in a casualty to your home, or an involuntary conversion of your home.
I’m thinking of presenting a valuable gift to a dear friend. Is it necessary to report this to the IRS? If your gift to any one person is valued at more than $12,000, you will have to report the total gift to the Internal Revenue Service. You may even have to pay tax on it.
However, the person who receives your gift does not have to report the gift to the IRS or pay gift or income tax on its value.
A gift is that which you make when you give property (including money) or the use of or income from property, without expecting to receive something of equal value in return. So if you happen to sell something at less than its value, or make an interest-free or reduced-interest loan, you could be making a gift.
There are some exceptions, however. The following do not count as gifts against the annual limit:
Also, if you are married, both you and your spouse can give separate gifts of up to the annual limit to the same person without making it a taxable gift.
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