Appointments will be available Monday through Saturday from 8 am until 4 pm. Evening and Sunday appointments will be available by special arrangement. Please call as soon as possible to schedule your appointment. If you send your material to me, please put it in the mail as soon as you have it organized.
My basic fees remain unchanged and may be paid by credit card this year. There will be a $5 convenience charge if you elect this form of payment.
The IRS has imposed two new requirements on tax preparers this year that may affect you. First, those of you who have stock transactions will no longer be allowed to report summary information about gains and losses; each stock transaction must be reported separately and a new form has been developed to capture that additional information. Second, I am now required to provide a draft return to each of you who mail me your material.
The change in the way stock transactions must be reported could require me to do an extensive amount of data entry with an obvious potential for errors. Therefore, I have acquired new software that will allow me to scan information directly from your brokerage forms to your tax return. Because I am charged $15 each time I use the new software and will need to pass that charge along to you, I will only use it when there are more than five (5) transactions that need to be reported.
Most of you who mail your material trust that your return has been prepared correctly and have received copies only after your return has been filed. The IRS says that is no longer an acceptable practice – all clients must have an opportunity to review their return prior to electronic filing. In order to comply, I will offer you two choices. I will either email you a draft of your returns and the electronic filing
forms or I will mail them to you. Because of the cost of printing and mailing the draft returns, there will be a $5 fee if you opt to receive your drafts by mail, rather than having them emailed to you.
No major tax laws were passed by Congress this year. However, there were a number of changes you should be aware of:
W2's will have the amount your employer paid for your health insurance entered in Box 14. This is for information only and this amount is not taxable..
Energy credits for the purchase of insulation, windows, exterior doors, special roofs, hot water heaters and HVAC systems are back again. The maximum credit is $500 and previous credits reduce this amount.
If you are eligibile for the Earned Income Credit be prepared for some additional questions from me that may seem a bit intrusive - the IRS is requiring additional information to verity eligibility.
Computer equipment, software and internet access cannot be claimed as a higher education expense for 2011.
There is no Making Work Pay credit for 2011. This was a credit of up to $400 for single filers and up to $800 for those filing jointly. Without the credit, refunds will be smaller and some taxpayers who received refunds for 2010 may actually owe for 2011.
The reduction in Social Security withholding from 6.2% to 4.2% (the so-called payroll tax reduction) has been extended for two months and extending it beyond February will be the subject of more political skirmishing when Congress returns this month. Whatever is decided, there will be no impact on your taxes - just on the amount you see in your paycheck.
Mileage rates changed mid-year, so if you claim a mileage deduction, be prepared to tell me miles driven January through June and July through December.
There were three significant tax changes in California:
Tax rates decreased and the exemption for dependents returned to pre-2009 levels. This will mean a decrease in the amount of taxes owed and/or a larger refund for most of you.
Legislation makes any cancellation of debt income resulting from a foreclosure or a short sale of a California property after July 15, 2011 non-taxable. Earlier legislation made any cancellation of debt income from a first mortgage that stemmed from a foreclosure of a Califonria property after January 1, 2011 non-taxable.
New credits are available for parents who do not quality for Head of Household status but who maintain a household for their child for at least 146 days a year, for taxpayers who provide a home for their parents but do not qualify as Head of Household and for Seniors who were previously eligible to claim Head of Household status but no longer qualify because of the death of the dependent. There are a number of additional qualifications for each credit and they aren't expected to apply to many taxpayers, but I'll be looking carefully at each of my client's individual stiuations and claiming credits where appropriate.
Random Thoughts –
Only the vehicle license fee portion of your DMV fees can be claimed as an itemized deduction. For California residents, the vehicle
license fee is shown on the breakdown that’s at the top of your annual bill and is also available at the DMV website. For residents of other states, your DMV website will have that information available for you.
Please be careful when sending me an email. My email address is firstname.lastname@example.org. If you leave out the “s” between
“turner” and“service”, your email will go to Randy Turner, a tax preparer in Alabama.
Please don’t send me your medical receipts. Add them up and just send me the totals. I don’t have the time to do those calculations for you and frankly, it makes me uncomfortable to look at receipts that detail information about medical procedures and prescriptions that
really are your private business.
If your electronic filing forms show that you owe money to either the IRS or your state tax agency DO NOT send a check for the amount
owing back to me with the electronic filing forms. When I send you your copy of the returns, I’ll enclose a voucher that you can use to send the check in yourself.
Fees are based on the forms that must be prepared for you. The basic fees are $25 for a 1040EZ, $50 for a 1040A and $75 for a 1040. Federal law dictates which form must be used. The basic fee includes preparation of the federal return and one state return, electronic filing of both the federal and state returns and telephone access for your questions and concerns throughout the year. Fees for all schedules and worksheets remain unchanged but there will be an additional charge if you have more than five stock transactions to
My fee can be paid in cash, by check, deducted directly from your refund or charged or charged to your credit card. There is a $22 charge if you have my fee deducted from your refund and it costs $5 to charge my fee to a credit card.
The IRS has dramatically increased the number of notices it sends to taxpayers. Between 2001 and 2009 the number of notices increased by 570%, with more than 201 million notices sent out in 2009 alone. If you receive a notice of any kind from the IRS and/or a state tax agency, please call me before you respond. There is no charge to review the notice and having me take a look at it before you respond may prevent a lot of problems down the road.
Best wishes for a happy and prosperous 2012.