What tax preparation do you offer?
We offer annual preparation for individuals, corporations, non-profits, estates, and partnerships. We also help with quarterly payroll and sales tax returns. We also offer amended tax returns for open years- usually the last 3 years- in which mistakes need to be fixed.
Do you offer help with bookkeeping?
Yes. We use Quickbooks products to work with our clients and help guide them to proper accounting procedures.
How much do you charge for tax preparation?
The amount can vary depending on the complexity of a tax return. Our prices are very competitive for the level of expertise that we offer. Some forms, like Earned Income Tax Credits, Education credits, Itemized Deductions, Rentals, and Schedule C businesses require due diligence on our part and expanded tax interviews.
Do you file the taxes electronically?
Yes. We are an authorized IRS e-file location, and we require signatures and proper identification before we will file electronically. You will still get paper copies, but everything else is handled electronically unless certain situations don’t allow it.
What is the benefit of hiring a tax professional versus doing it myself?
Our preparers are trained and experienced in tax law, which can be confusing and complicated to the average taxpayer. In the case of a simple return, you may not need to consult a tax professional, but for even moderately complex returns simple mistakes can be costly. You could be leaving money on the table or be subject to an IRS letter later on. We check all returns for accuracy and are up to date on all relevant tax laws, with a research service to back us up. We also offer tax planning for future years.
Do I qualify to itemize my deductions this year?
Itemized deductions on schedule A have been around for decades and have helped many taxpayers. Starting in 2018, the standard deduction was doubled, making itemizing unlikely to surpass the higher standard deduction. For 2021 that standard is $12,550 for single filers and $25,100 for married filers. Once you are over 65 you get to add another $1350 to that number, making any earnings below your standard deduction tax-free.
Itemized deductions include the following
- Taxes paid to states and localities, including property and income taxes, but limited to $10,000 total.
- Mortgage interest paid on a main home and one other home.
- Donations to charitable organizations ($300 in donations is now deductible without having to itemize.)
- Medical, dental, and health insurance deductions- these must be qualified out of pocket expenses and must total over 7.5% of your income before they even start counting. Amounts need to be in the thousands before paying too much attention to this.
The higher standard deduction goes away after 2025, but until then only about 5% of taxpayers will have enough deductions to itemize.
I missed one of the three stimulus payments. Can I still get them?
Yes, you can. The economic stimulus payments were set up by three separate laws passed during the Covid-19 epidemic. Payment 1 went out in April of 2020, Payment 2 went out in January of 2021, and Payment 3 went out in March of 2021. Each payment had different amounts and rules, but most people did get them eventually. If you missed out, payments 1 and 2 can be added to your refund on your 2020 tax return after reconciling with the amounts you did or didn’t get. Payment 3 will be reconciled on the 2021 tax return, and those who qualify will get one last chance to receive this special benefit.
What is the Child Tax Credit and how is it changing this year?
The child tax credit has been around for a while, and it has offered up to a $2000 tax credit per child to parents of children under the age of 17, calculated on their annual tax return. For 2021 only, the child tax credit was made into an advance payment, starting in July 2021, and sent out to parents based on information from their latest tax return. Also, the credit was raised to $3000 per child up to age 18, ($3600 if they are under 5), and made more refundable for people who don’t owe $3000 in taxes. Parents will have an opportunity to check on their advance payments at IRS.gov, as well as to opt out and revise bank and dependent information.
Do I still have to report my health insurance on my taxes?
This requirement is no longer active, even though companies are still sending out forms 1095 showing health coverage. The only exception is for people who get their health insurance though the federal marketplaces. All marketplace enrollees will receive a form 1095-A in January of each tax year, and that form must be reconciled with their tax return to determine if the proper amount of premium subsidies were received.
Who can I claim as a dependent?
If you supported someone, even a non-related person, during the year you could possibly claim them as a dependent. Sometimes they don’t even have to live with you. There are a complex set of rules that include age, relationship, residency, income, and support level that determine if someone is a dependent. You can receive a credit of $500 or more for each dependent, plus file the beneficial Head of Household filing status if the dependents qualify. Always ask us if you think someone could possibly qualify.
Is unemployment considered taxable income?
For 2020, up to $10,200 of unemployment was considered non-taxable because of the Covid epidemic. That law has expired and for 2021 all unemployment is again taxable, meaning that you should withhold both federal and state taxes to avoid problems at tax time.
Why is my refund so late?
When we send your tax return to the IRS electronically, they get it within seconds, and we receive notice that it was accepted. What happens after that is something of a mystery. Most returns get processed within 2 weeks and refunds are issued. But the IRS is always checking for mistakes and fraud, and a large number of returns get flagged by their computers and set aside for a second look, often by a human being. This flagging procedure can delay refunds for months depending on the issues involved. If there is a problem the IRS will usually notify you by letter. You can try to contact the IRS, but that is usually a waste of time. The best way to check on refunds is at the Where’s My Refund page on IRS.gov. The IRS has absorbed a number of budget cuts in recent years and their service has suffered, but don’t blame the hard-working staff that is still there trying to play catch-up.