What do I do if I receive a notice from the IRS about
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 is the difference between a C and an S corporation?
A C Corporation and an S Corporation are exactly the same in
respect to liability protection. The difference is in how you
are taxed. A C Corporation has what is referred to as a double
taxation. First the corporation is taxed, and secondly the
dividends are taxed on the shareholders’ tax returns. An
S Corporation is not taxed at the corporate level, only at the
shareholder level. Most small businesses are eligible to file
as S corporations. But the appropriate election must be
What do I need to bring when I am having my taxes prepared?
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 refund?
The 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
How long do I keep my records and tax
You should keep your records and tax returns for at least 3
years from the date the return was filed or the date the return
was required to be filed, whichever is later. It is recommended
that you keep these records longer if possible.
What are the consequences of early withdrawals from my
If you withdraw money from a 401(k) or an IRA before age 59
½, the distribution is taxable and there is a 10%
penalty on the taxable amount. The main exceptions
that let you withdraw money early without penalty are as
Are there plans with tax savings for
Qualified retirement plan distributions if you separated
from service in or after the year you reach age 55 (does
not apply to IRAs).
Distributions made as a part of a series of substantially
equal periodic payments (made at least annually) for your
life or the joint lives of you and your designated
Distributions due to total and permanent disability.
Distributions due to death (does not apply to modified
Qualified retirement plan distributions up to (1) the
amount you paid for unreimbursed medical expenses during
the year minus (2) 7.5% of your adjusted gross income for
IRA distributions made to unemployed individuals for health
IRA distributions made for higher education expenses.
IRA distributions made for the purchase of
a first home (up to $10,000).
Distributions due to an IRS levy on the qualified
Qualified distributions to reservists while serving on
active duty for at least 180 days.
The main plans for saving for college are the 529 plans and the
What is a 529 plan?
A Qualified Tuition Program (QTP), also called a "529 plan," is
established and maintained to let you either prepay or
contribute to an account established for paying a student's
qualified higher education expenses at an eligible institution.
States and eligible educational institutions can establish and
maintain a QTP. You do not get any federal deductions for the
account, but any income earned in it is tax-free. One of the
big advantages of a 529 plan is that many states allow you to
deduct some contributions to the plan from your state tax
What do I need to keep for my charitable
First, is your contribution cash or non-cash?
If you make a cash donation, you must have a bank record or
written communication from the charity showing the name of
the charity and the amount of the donation. A bank record
can be the cancelled check or a statement from a bank or
credit union—so long as it lists the charity’s
name, the date, and the amount of the contribution.
Personal records such as bank registers, diaries and notes
are no longer considered acceptable proof of contributions.
Any used items (such as clothing, linens, appliances, etc.)
must be in good condition and may only be deducted at the
price you could reasonably ask for the item in used
condition. For contributions worth $250 or more, you must
have a written receipt or letter from the organization. For
contributions worth $500 or more, you must file Form 8283
(Noncash Charitable Contributions) and attach it to your
All contributions must be made to qualified charitable
I received tax statements from my employer or bank
after I filed my tax return. What should I do?
If we filed your return, bring the new tax documents to our
office. We will determine if it is necessary for you to file an
I haven’t been filing my tax returns what should
First, you must determine if you were required to file in the
years you did not file. There are many different items that
could figure into this—such as your filing status, your
sources of income, whether you had any tax withheld, etc. This
is a link to the IRS instructions for filing requirements for
you determine you should have filed, contact us and we can
handle all of your prior year filings. It is very important
that you do not just continue to not file. If you owe money the
penalties for not filing are high. If you are owed a refund you
will lose your claim to it 3 years after the due date of the
Is my social security taxable?
Usually if your income including social security benefits is
less than $25,000 if single or $32,000 if married, your
benefits are not taxable. If your income is higher than those
limits, there are formulas to determine what percentage of your
social security is taxable. Currently up to 85% of your social
security may be taxable.