What do I do if I receive a notice from the IRS
about my taxes?What college expenses may I
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.
What do I need to bring when I am having my taxes
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
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
There are several ways you can claim
deductions for college expenses on your tax return. They are
the tuition deduction, the HOPE credit and the Lifetime
Learning Credit. If we are preparing your return we will
determine which ones you qualify for and which one gives you
the greatest tax benefit.
What are the tax consequences of selling a
If you sell your personal residence you
can totally exclude from income up to $250,000 of gain if you
are single, or $500,000 if married, regardless of your age at
the time of the sale—if during the 5 years before the
sale you owned the home and lived in it for a total of any 24
months. The exclusion is not a one-time election; instead it is
available once every 2 years. Recent tax law has adversely
changed the handling of gains on the sale of a home if you
rented the property before you made it your personal residence.
Please contact our office if you believe this situation will
How should I keep records for my business
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.
My employer tells me I will receive a 1099. What
does this mean for my taxes?
When you receive
a 1099, it means you are considered an independent contractor.
You will not have any withholding or payroll taxes deducted
from your pay. You should keep track of all business expenses
and a journal of your mileage driven for work. If the amount
you expect to receive is substantial, you should probably be
making estimated tax payments. Please contact us if you have
any questions about this.
I owe the IRS money. What are my
If you can afford to pay the amount you owe, it should be
paid. But many times that is not the case. If you cannot
afford to pay, you have several options. Ignoring the IRS
should not be one of them!
The first option is to enter into an installment agreement
with the IRS. To do this you need to fill out
9465, Installment Agreement Request.
This form is fairly easy to complete, but we strongly
recommend that if you owe a substantial amount of money you
work with us to secure your agreement.
The second option, which is much harder to get approved, is
an offer in compromise. The IRS will be reluctant to do
this if they feel you have the resources to eventually pay.
You should not attempt an offer in compromise without
professional help you can trust. The
IRS has also issued a consumer alert, advising taxpayers to
beware of promoters’ claims that tax debts can be
settled for “pennies on the dollar” through the
Offer in Compromise Program.