Posting This Again

“I’d rather regret the things I’ve done than regret the things I haven’t done.”

- Lucille Ball

Well, last week I departed from my normal area of expertise, and wrote out a real-world guide on preparing your family and home for a true disaster. Got lots of feedback — thank you!

But, I thought I should re-enter the fray of my primary task: ensuring you and your family don’t face an IRS disaster! And, since we’re nearing the home stretch in tax season, with the deadline for individuals (April 18th) just under a month out, we’ve been “packing them in” around here!

But this is something we still get asked about every day!

However, before I get there, I did want to say that one of the main reasons we love tax season around here is that we get to sit down with such incredible people. I’ve truly been reminded of how grateful I am for our clients–and for your trust in us during these “unusual” times.

We’re getting notes around here more and more often as people pass around my Strategy Notes to their friends. People seem to hunger for real world hope. I’m glad to be able to say that there *is* reason for anticipating a recovery in our future, but that whatever comes, my staff and I will be here to walk you through the storms.

So, onward with the answer to our most commonly-asked question around now!

Martha Echols’

“Real World” Personal Strategy

Your Tax-Time Checklist!

In early January, I wrote a “checklist”, and it was one of our most popular messages. I guess it was handy!

Putting together this list may run slightly counter to my business goals–after all, we do get paid to do this on behalf of clients! That said, our mission is to ensure that EVERYONE in the area saves the most possible when the IRS comes calling! Some of these may seem small, but trust me when I say that they add up.

So…even if for some strange reason you won’t be using our cost-effective services this year, and because we’re getting so close to April 18th, here it is again for you: what you’ll need to prepare your taxes…

Personal Data

Social Security Numbers (including spouse and children)

Child care provider tax I.D. or Social Security Number

Employment & Income Data

W-2 forms for this year

Tax refunds and unemployment compensation: Form 1099-G

Miscellaneous income including rent: Form 1099-MISC

Partnership and trust income

Pensions and annuities

Alimony received

Jury duty pay

Gambling and lottery winnings

Prizes and awards

Scholarships and fellowships

State and local income tax refunds

Unemployment compensation

Homeowner/Renter Data

Residential address(es) for this year

Mortgage interest: Form 1098

Sale of your home or other real estate: Form 1099-S

Second mortgage interest paid

Real estate taxes paid

Rent paid during tax year

Moving expenses

Financial Assets

Interest income statements: Form 1099-INT & 1099-OID

Dividend income statements: Form 1099-DIV

Proceeds from broker transactions: Form 1099-B

Retirement plan distribution: Form 1099-R

Capital gains or losses

Financial Liabilities

Auto loans and leases  (account numbers and car value) if vehicle used for business

Student loan interest paid

Early withdrawal penalties on CDs and other fixed time deposits

Automobiles

Personal property tax information

Department of Motor Vehicles fees

Expenses

Gifts to charity (receipts for any single donations of $250 or more)

Unreimbursed expenses related to volunteer work

Unreimbursed expenses related to your job (travel expenses, entertainment, uniforms, union dues, subscriptions)

Investment expenses

Job-hunting expenses

Education expenses (tuition and fees)

Child care expenses

Medical Savings Accounts

Adoption expenses

Alimony paid

Tax return preparation expenses and fees

Self-Employment Data

Estimated tax vouchers for the current year

Self-employment tax

Self-employment SEP plans

Self-employed health insurance

K-1s on all partnerships

Receipts or documentation for business-related expenses

Farm income

Deduction Documents

State and local income taxes

IRA, Keogh and other retirement plan contributions

Medical expenses

Casualty or theft losses

Other miscellaneous deductions

While some of these statements, and their ensuing deductions may seem like “pocket change”…just a few minutes of effort can pay a nice hourly rate! And, better in YOUR pockets than in Uncle Sam’s, right?

So, I hope this helps!

Well it’s over…or is it?

“If we do not change our direction, we are likely to end up where we are headed.”

- Chinese Proverb

Last week was crazy. We had so many last-minute folks come through our doors before the 15th, that we were (briefly) tempted to shut our doors so we could handle the flow!

But we didn’t. We’re glad to say that we worked very hard during the “offseason” so that we would be prepared for the tax season rush. We were able to work with everybody that came in, even folks who walked in on the 14th.

That said…shutting those doors at the end of the day on Thursday (the 15th) was sweet. We could look back on months of hard work, and take real satisfaction in hard work and a bunch of new client relationships which we’re excited to see last for years.

“So…what now?”

That’s a good question–and it takes us back to our offseason preparation. Sure, we’ll be taking some well-deserved vacation around ere from time to time.

If you’re new to us this year…you’ll soon find out that we make big deal around here of keeping in touch, and offering you hope and wisdom about the current state of the economy–and YOUR wallet!

Many tax businesses shut their doors pretty firmly during the summer and fall. Not us.

This week’s Strategy Note, in fact, deals with a topic which most taxpayers have no idea about. This one, actually, is probably one to share with your friends…

Martha S. Echols, CPA’s

“Real World” Personal Strategy

Little-Known “Secret”:  Amended Returns

As a client of ours, you’ve already got the peace-of-mind that you were able to claim every possible deduction legally allowed in the tax code. We put each return through an extensive review process to ensure that you’re keeping all the income you deserve to keep.

But what about your friends?

Well, since it’s now AFTER April 15th, they might think that the proverbial “fat lady” has sung on their 2009 returns. Not so.

Did you know that according to a 2002 report issued by the General Accounting Office, taxpayers overpay the IRS almost $950 million every year, which equates to an average overpayment of $400 per taxpayer. That’s a somewhat dated report…and the current numbers are certain to be higher.

What’s worse is that folks who prepared their own taxes (with an off the shelf software, or on their own manually) are the most vulnerable. But did you also know that taxpayers who used one of the “big chain” preparers are almost as bad off?

An excerpt from a more RECENT report from the GAO (2006):

In a Limited Study, Chain Preparers Made Serious Errors

In GAO (United States Government Accountability Office) visits to chain preparers, paid preparers often prepared returns that were incorrect, with tax consequences that were sometimes significant. Some of the most serious problems involved these preparers…

1.  Not reporting business income in 10 of 19 cases;

2.  Failing to take the most advantageous postsecondary education tax benefit in 3 out of the 9 applicable cases; and

3. Failing to itemize deductions at all or failing to claim all available deductions in 7 out of the 9 applicable cases.

More clippings from the report:

* The 19 paid preparers we visited arrived at the correct refund amount only twice. On 5 returns, all for the plumber, they understated our refund amount by a total of $3,465.

* All 19 of our visits to tax return preparers affiliated with chains showed problems. Nearly all of the returns prepared for us were incorrect to some degree, and several of the preparers gave us very bad tax advice, particularly when it came to reporting non-W-2 business income. Only 2 of 19 tax returns showed the correct refund amount, and in both of those visits the paid preparer made mistakes that did not affect the final refund amount.

So what can your friends do about this? Simple: file an “Amended” Return.

Many tax businesses don’t provide this service, but even though we’ve completed our clients’ returns, we WILL review any of your friends’ returns–at no charge.

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“No Charge” Return Review

Special Gift Certificate

As a complimentary service this year, we will provide a Return Review To Any Non-Client.

No charge will be made, unless we have to file an amended return.

[Industry statistics indicate that amended return refunds average about $1500]

Email our office  or call (205) 715-0088 to set up this complimentary service!

Deadline May 15th

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