It’s Never Too Early To Get Ready For The 2017 Tax Season

tax season


April 18 is almost a distant memory for most of us. Tax returns or extensions are filed, documents stored, and refunds are on their way to our bank accounts if not received already.

If tax season 2016 was too hectic for your tastes, there are ways you can prepare for a smoother 2017 tax season by preparing early. Mid-year is the perfect time to assess your individual tax scenario.

Keep track of these milestones:

  • Birth or adoption of a child
  • Marriage or divorce
  • Transferring or relocating for work
  • Change in military status or activity
  • Death of spouse
  • Receiving lump sum distributions, inheritances or settlements
  • Starting or selling a business
  • Establishing a home office
  • Significant medical expenses not covered by insurance
  • Job search expenses, including mileage, lodging and relocation expenses
  • Collecting Social Security, Unemployment or Social Security Disability Insurance benefits

Each of these milestones will affect your tax status for 2017. Now is the time to consult with a tax pro who can advise you on the best tax strategy for these life events.

Understand the updated tax laws for 2017

Tax laws change frequently at the state and federal level. These changes can include:

  • State tax regulations
  • Itemized deduction allowances
  • Changes in tax credit programs, eligibility or regulations
  • Changes in trust and estate regulations
  • Retirement account contribution limits
  • Income limits for contributions to a Roth IRA

You can begin researching these changes through your state revenue department website, website, or community resources such as  workshops or lectures.

You’re not alone, however, if you find the language of these regulations confusing or difficult to understand. Always enlist a qualified tax pro if you need clarification on any tax matter, particularly changes in tax laws or regulations.

If you are a low wage earner, disabled, or a senior, you can access basic tax advice through the VITA program beginning in January of each year. Trained volunteers will assist you with any basic tax questions as well as provide tax filing assistance.

File early

Identity theft and tax  fraud are on the rise. Filing early in the tax season will prevent an identity theft ring from attempting to file a fraudulent tax return under your name and social security number.

Last but not least…

Organize your tax documents throughout the year. If you haven’t done so already, set up a filing system for your paystubs, receipts, freelance/side job income, medical/dental expenses, and home office expenses.

There are also many spreadsheet and basic bookkeeping programs and apps available to help you keep record of your income, expenses and deductions throughout the year.

Staying organized year round will eliminate the last-minute rush to gather paperwork and records on tax filing day, making things easier for you and for the tax pro who will be filing your return.

Mid-year is a perfect time to prepare for the 2017 tax filing season. Make note of any significant life change, stay current on changes to tax laws and regulations and file early in 2017.

What Happens If You Miss The Tax Deadline

Tax day is right around the corner. Are you ready?


tax deadline

Taxpayers will have an additional three days to file their taxes this year. Most people associate April 15 with the  tax deadline, but tax day 2016 will fall on the 18th. The IRS received over 99 million returns in 2015, and issued over 77 million refunds.

What if your tax return won’t be among those filed by the deadline this year? What happens if you miss the tax deadline?

First, the good news. If you will be receiving a refund, you have up to three years to file your return in order to claim that refund.

However, if you will owe taxes, there are penalties for missing the tax deadline:

  • The late-filing fee is 5% of your balance. The penalty for paying your tax bill late is 0.5% of the balance you owe. If you file late and pay your balance late, you’ll be hit with both penalties.

Penalties will accrue for every month you don’t file your return or pay your tax bill.

If you know you will have trouble paying your tax bill in one lump sum, you can file a request for an installment agreement through the IRS. Keep in mind you will still need to file your return on time in order to apply for the installment plan.

If you’re confident in filing your own return, you can use one of the many tax filing software packages available, or you can file through the IRS’s Free File portal, available to taxpayers who earn $62,000 or less.

Even with those tools, you may still need more time. In that case, you can either file for an extension on your own or have your tax preparer do it on your behalf. The extension will grant you until Oct. 15th to prepare and file your return.

You’ll still need to pay your tax bill on time, however, in order to avoid late payment penalties.

There are times when missing the tax deadline is unavoidable. In that case, filing an extension would be to your benefit while you gather your tax paperwork and calculate how much tax you’ll owe.

April 18 is coming sooner than you think. Keep these tips in mind if you won’t be able to file your taxes on time. You lessen the impact of any penalties and still give yourself the extra time you need to file your return.


Did You Work For Cash In 2015? Check Out These Tips

If you worked for cash in 2015, here are some important tips


Note: The advice in this post is not intended to replace the advice of a qualified tax preparer. Always seek professional input before preparing your own taxes.

Most of us at one time or another earn extra cash with a side gig. While this can help your bottom line, there are tax implications.

The 1099 form: If you worked for an individual or organization for cash, they must issue you a 1099 form if you earned over $600.00. You will need to report your earnings on your income tax form under “Misc. income.”

In some cases, a client or employer who paid you cash will go ahead and issue a 1099 even if you earned less than $600.00. This is preferable because record-keeping will be easier for you and there will be less chance of errors in reporting your income.

Either way, employers must mail out these forms  no later than January 31st, so if you have not yet received yours, follow up immediately with your client or cash employer.

Why the 1099 is important: If there is a discrepancy between the earnings you reported to the IRS and the earnings reported by your client(s) and employer(s), processing your tax return will be delayed, along with any refunds.

At the same time, if the employer doesn’t report your earnings to the IRS, they, too, could face additional scrutiny and delays.

At the very least you’ll receive a letter from the IRS requesting correct information. At the very worst, it can trigger an audit or review.

If you’ve kept track of your earnings from each client and employer, be sure their income figures match your records.

Income and expense records: If you earned cash from a side gig in 2015, you’ll not only need to report your income, but you will also need to report your expenses.

Your tax preparer will attach either Schedule C or C-EZ to your tax return. If you are taking the DIY approach and filing your own taxes, you’ll need to complete Schedule SE to calculate your self-employment tax.

Keeping accurate income and expense records is key to filing an accurate return as well as calculating the correct amount of taxes you will owe. There are many apps and software programs that can help you track income and expenses such as Quickbooks, Harvest, or Excel.

Estimated Taxes: The amount of estimated taxes you may need to pay this year are based on your earnings in 2015. These taxes can be paid in quarterly installments or all at once. Your tax preparer can calculate your estimated tax.

Working for cash is a great way to help make ends meet. If 2015 was your first tax year working for cash, tax day will be different for you than in years past.

Have your taxes done by a professional and bring all of your 1099 forms, income/expense records, and any other documentation your tax preparer requests from you.

Don’t let the prospect of paying self-employment taxes scare you. Your tax preparer can help you in determining your estimated tax for this year.

You’ll avoid “sticker shock” and will be able to stay on top of your taxes. You’ll also avoid over-paying estimated taxes so you can keep the money where it belongs: with you.

By keeping accurate income and expense records you can make your side gig work for you and not for Uncle Sam.




Need Tax Filing Assistance? VITA Can Help

Tax filing assistance with VITA

Get tax filing assistance from skilled VITA volunteers

Tax season is upon us, and if you’re in need of tax preparation assistance, you’re in luck. The IRS offers two volunteer-based programs to qualified taxpayers.

VITA (Volunteer Income Tax Assistance) provides tax filing assistance to any taxpayer who meets any of the following criteria:

• Earn $54,000 or less per year
• Disabled
• Limited English proficiency speaker and will need help in reading and interpreting tax forms and tax return instructions.

VITA sites are found in community centers, shopping malls, senior centers, libraries and other community gathering spots. IRS-trained volunteers will help you file a basic tax return at no charge to you.

To locate a VITA site, call (800) 906-9887 or use the online locator to find a site near you.

Help For Taxpayers Over 60

If you’re over 60 and have retirement or pension-related tax concerns, the TCE (Tax Counseling for the Elderly) program is available to you.

IRS-trained volunteers, in cooperation with the AARP Foundation will assist you in preparing and filing a basic tax return, much like they do in the VITA program.

To find the nearest TCE site, call (888) 227-7669 anytime between January and April to find the nearest site and/or to schedule your appointment.

To locate a TCE site online, use the AARP Tax Aide locator.

Getting Organized is Key

Regardless of which program you choose, getting organized ahead of time is essential to filing an accurate and timely return.

Limited-income taxpayers, disabled taxpayers and those with limited English skills are welcome to participate in the VITA program. Older taxpayers also have access to IRS-certified volunteers to help them file their tax returns.

If you are in any of the above groups and prefer to self-file, just look for the “self prep” designation in the VITA/TCE site listing.

Five Things You Need to Do Before Tax Day

Tax day doesn’t need to be stressful if you keep these five things in mindtax day

No one relishes the idea of getting their taxes done. Between work, family, and other commitments, very few of us have the time. Show up unprepared on tax day, however, and you could be in for a stressful ride. Here are five things you need to do before tax day:

Fill out the organizer from your tax preparer: You’ll typically receive it in the mail as early as January. Tax preparers are busy this time of year, so help them out by filling out the organizer form ahead of your appointment.

Tax day will go faster and be less stressful for everyone involved.

Get organized: gather all of your income statements (W2s, 1099s, bank interest statements, stock/bond dividend statements, retirement income statements) and set them aside.

Your tax preparer will need them in order to file your return. If you are missing any of your income documents, contact the issuing party and request a duplicate.

Set aside your mortgage interest statements: Your bank will issue a mortgage interest statement that will disclose how much interest you paid during the tax year. Since mortgage interest is deductible, your tax preparer will need it in order to prepare your return.

Round up receipts for income and expenses if you’re self-employed: Better yet, if you have a spreadsheet that discloses your income and expenses, bring that with you to your tax prep appointment.

Your appointment will go faster and your tax preparer will be grateful. You can also transfer the figures from the spreadsheet to your tax organizer booklet.

Gather receipts for any additional deductions: Gather receipts for child/dependent care, medical/dental expenses not covered by insurance, interest statements, student loan interest statements, and records for any other itemized deduction.

Your tax preparer will be able to determine whether or not you qualify for specific deductions, so be sure to provide all the needed information on the organizer form or bring all records with you on the day of your tax appointment.

Most of all, take tax day in stride: No one ever looks forward to their tax appointment, but with a little advance organization, you could have a less stressful tax day. Allow plenty of time to get to and from your appointment, and allow plenty of time for your appointment. Have all the necessary paperwork that your tax preparer will need so they can prepare your return accurately and quickly.

Tax Code Changes 2015 You Need to Know

Learning about changes to 2015 tax code can save you from “sticker shock” on tax day.

It seems that each passing year brings updates or changes to IRS tax codes, and 2015 is no exception. Here are a few of the tax code changes for 2015.

Crackdown on IRA rollovers: In years past, you could withdraw funds from one IRA, wait for 60 days, and then place those funds into another IRA. Effective this year, you are allowed only one IRA rollover per 12 month period. You could be penalized for any rollovers beyond the one-per-year limit.

ACA penalty: The Affordable Care Act, affectionately known as “Obamacare,” made health insurance accessible to a broader cross-section of people that were previously  ineligible for individual or government-based plans, or who had no access to employer-sponsored plans.

Taxpayers who decided to opt out were hit with a relatively mild $95.00 fee unless they could file for an exception to that provision.

This year, non-compliant taxpayers will see a penalty of at least $325.00 per person, a substantial increase from last year. If you plan on filing for an exemption, you’ll need to do so quickly as the IRS requires a certificate for some exemptions.

ACA exemptions granted on a case-by-case basis. This tool from will walk you through a series of questions to help you determine whether or not you’re eligible for an exemption.

Foster Care payments for relatives: In previous tax years if you were a legal foster parent for a young relative and receiving payments from either MedicAid or a licensed government agency in exchange for foster care, you had to declare those payments as income each year. This was due in part to the provision that stated a relative could not be considered a foster child.

Beginning this tax year, if you have a younger relative living with you that is also your foster child, any payments received for non-skilled medical support can be excluded from your taxable income.

Great news for Pell Grant recipients: Pell Grant funds can now be allocated toward your living expenses instead of just toward tuition, fees and books. This change increases the actual amount of educational expenses you would report in claiming one of the higher education tax credits.

Tomorrow: Learn more about additional tax code  changes for 2015.



Who Can Prepare Your Taxes?

Who Can Prepare Your Taxes2_

Find the right tax pro for your needs.

Last week, we discussed how to look for an ethical and qualified tax pro. If you’ve decided to not take the DIY approach to tax filing this year and enlist a tax pro, it’s also important to understand the difference between qualified tax preparers. Here’s a look at the various individuals that can file a tax return on your behalf.

PTIN holders: A PTIN holder is an individual that is not a Certified Public Accountant (CPA), tax attorney or Enrolled Agent(EA). While they can prepare and file a return on your behalf, they can only represent you under limited circumstances: With IRS revenue agents, IRS customer service representatives and those in the Taxpayer Advocate Service. A PTIN holder can’t represent you in an audit, appeal or collection proceeding.

Annual Filing Season Program Participants: This new officially program recognizes preparers who are not a CPA, EA, or tax attorney, but who have attended continuing education hours in preparation for each filing season. The IRS will issue them a Record of Completion. As with PTIN holders, a Filing Season Program Participant can’t represent you in an audit, appeal or collection proceeding. They can, however, represent you with IRS customer service agents, revenue agents, and Taxpayer Advocate personnel.

If you have a more complex return (rental properties, business or estate returns, extensive itemized deductions, foreclosure) or are facing IRS collection action, it’s best to work with a tax pro who has more extensive representation capabilities. Enrolled Agents, Certified Public Accountants and tax attorneys can represent you in an audit, collection action, and appeal action in addition to preparing and filing a return on your behalf.

Enrolled Agent(EA): An EA is licensed by the IRS and must pass a three-part Special Enrollment Exam. An EA must also be proficient in tax planning, preparing and filing individual and business returns and must participate in at least 72 hours of continuing education courses every three years.

Certified Public Accountant (CPA): A CPA must have a degree in accounting from an accredited college or university, and must be licensed by the state Board of Accountancy in their state. In addition to passing the Uniform CPA Exam, a CPA must also meet ongoing ethical and character standards in order to continue to practice. Some CPAs specialize in tax planning and tax return preparation.

Tax attorney: Like all other attorneys, a tax attorney has attended an accredited law school, passed the state bar exam, and must meet ongoing ethical standards in order to remain in practice. They have additional coursework in taxation, and can represent you before the IRS. Your tax attorney can represent you in IRS proceedings for an audit, an appeal, or collection matter. You can find a tax attorney either as part of a group practice or as a sole practitioner.

We have tax pros on staff who can help you with just about any tax scenario you can think of, from representing you before the IRS to preparing and filing your return. Just give us a call or click the white “start chat” button at the top of any of our pages and get started today. Approach the coming tax season with peace of mind so you can focus on what matters to you most.