Frequently Asked Questions

Q: My neighbor always pays less in taxes than I do. Should I switch accountants?
A: Everybody's tax return is unique. It is impossible to compare what you pay in taxes to what your neighbor pays. To ensure that you are getting a fair shake, come to your tax appointment armed with all your tax documents. During the tax interview ask your accountant for tax planning ideas. Lastly, find an accountant that is willing to spend the time necessary to get all the tax deductions and credits you deserve.
Q: What documents do I need to bring to my tax appointment?
A: INCOME:
  • Forms W-2 (Wages)
  • Forms 1099 (Interest, Dividends, Miscellaneous, State tax refunds)
  • IRA or pension distributions
  • Brokerage statements (Stock, Bond or other investment activity)
  • Rental income
  • Schedules K-1 (Income/ loss from partnerships, S Corporations)
  • Unemployment compensation
  • Social security statements
  • Closing statements (Real Estate Transactions)
INCOME ADJUSTMENTS:
  • Health savings accounts
  • Moving expenses
  • IRA or other retirement contributions
  • Student loan interest
  • Self-employed health insurance
ITEMIZED DEDUCTIONS:
  • Medical expenses (Include health and long-term care insurance)
  • State income taxes paid
  • Real estate taxes paid
  • Sales tax paid on large items (Cars, boats, aircraft etc.)
  • Forms 1098 (Mortgage Interest
  • Mortgage insurance premiums (paid on post 12-31-06 contracts)
  • Contributions (cash and non-cash)
  • Un-reimbursed employee expenses
  • Union or professional dues
CREDITS:
  • Child and dependent care expenses
  • Education expense (Tuition)
  • Energy improvements made to your home (Insulation, exterior windows & doors, new heating and cooling systems).
Q: What documents do I need to bring to my tax appointment if I have a business?
    A:
  • A year end balance sheet and profit & loss statement for the company. If you have QuickBooks or Peachtree accounting software bring a back-up copy on a flash drive or CD.
  • Year end statements for each checking account and the accompanying bank reconciliations, if prepared.
  • Year end statements for all investment accounts
  • 1099's received fro interest, dividends, and sales of securities.
  • Year end statement for all loans and financed leases. These include lines of credit, equip loans, auto loans etc.
  • From 1098's received from lenders for interest paid during the year.
  • Originating documents for all new loans and leases acquired during the year.
  • All payroll tax returns filed for the year: These include Federal form 940, Forms 941, State Withholding tax forms and state Unemployment tax forms.
  • Employer's annual wage reports (W-2's and wage report transmittal (form W-3).
  • End of the year sales tax reports.
  • End of the year inventories valued at cost.
  • For all large assets purchased, please provide a copy of the invoice and/or a list of new assets showing the date acquired, purchase price, and description.
  • Complete the "Business Usage For Automobiles" sheet for all owned and leased vehicles that are used in the business. (Find the worksheet at the end of this question list)
  • S-Corps only: Medical insurance premiums paid for shareholders and their dependents are required to be included in gross wages and shown as a taxable fringe benefit on their W-2's. These amounts are also included in Medicare and Social Security wages, but only if paid on a discriminatory basis. Please make sure that your or payroll tax preparer include these amounts in wages and on your W-2. If you need assistance, please call us.
Q: How much will it cost to have my taxes professionally prepared?
A: Each individual or company has a unique tax situation and varying ways they keep tax records. Equally unique is the way accountants and tax preparers charge for their services. Nobody likes surprises so we encourage our clients to ask for an approximate price range for their tax return preparation.
Q: My 17 year old son wants to file his own tax return and get back the taxes that were withheld on his W-2. Is there any harm in letting him prepare his own return?
A: Our experience has been that when dependent children file their own tax returns they also claim a tax exemption for themselves. When the parents try to file their return the IRS will not allow a 2nd exemption for that dependent. To correct the problem an amended return has to be filled for the dependent child and the parents are delayed in filing their return. To combat this problem we prepare simple children's tax returns for free.
Q: Should I itemize my deductions?
A: We encourage all of our clients to bring in their itemized deductions. It only takes a moment for us to enter the information. We have found that client's itemized deduction information often help us with providing tax savings ideas.
Q: What documentation do I need for charitable contributions?
A: For cash contributions the IRS requires a bank record (such as a canceled check or account statement) or a written communication from the charity. For property donations the IRS wants to know how the market value was calculated, the cost basis, and any conditions attached to the donation. If you are considering a large property donation call our office for more information.
Q: I am considering starting my own business. Do I need an accountant?
A: There are many decisions that need to be made in the initial start up phase of any business. Some of these decisions will impact the business's success for years to come. For this reason we offer free initial consultations to new business owners.
Q: Should I incorporate my business?
A: As your business grows and changes the entity form you are currently using may also need to change. The things you should consider are liability protection, ownership division, and taxes. Before you do anything sit down and discuss the advantages and disadvantages of incorporating with your accountant.
Q: Is it really necessary to keep a mileage log?
A: In the eyes of the IRS no mileage record equals no vehicle deductions. This is true whether you take actual vehicle deductions or use the standard mileage rate. If your mileage does not vary from month to month, the IRS will allow a sample three month record. Our advice is to keep a contemporaneous mileage log and sleep well at night.
Q: Should I do my own payroll or should I hire someone to do it for me?
A: Many small business owners outsource their payroll processing because they don't have the time or expertise to do it themselves. Our CPAs and payroll processors are highly trained and up-to-date regarding wage and hour regulations, payroll tax payment deadlines, wage garnishments, and payroll processing related issues. Most often small business owners will realize significant cost savings by outsourcing their payroll functions. Outsourcing payroll allows business owners to focus their energies on competencies that drive their business such as sales and customers.

Quick Questions

We earn success for our clients by taking a proactive approach in helping them make their businesses more profitable.