Commonly Forgotten Tax Docs

As we are rolling along a new tax season, we wanted to remind folks of some of the most common things that many folks forget to provide to us when they bring us their tax docs:

• "Own. Tax" - this is a deductible "personal property tax" for those that itemize their deductions and is found on your vehicle registration cards
• Childcare expenses - most remember to tell us how much they spent on childcare; however, the IRS requires that we have each provider's name, address, and SSN or EIN (tax ID) along with the applicable dollar amounts.  If you have had childcare provided so that you can work this past year, please make sure you get this info
• Cost Basis Info - the IRS has made some BIG changes this year in how they require us to report cost basis information on tax returns.  Fin'l advisors/brokers are now required to report the cost basis on their 1099-B tax forms they provide to you as well.  However, many times this information is not available or not correct.  Therefore, it is VERY important that you keep good records of your buying and selling activities. 
• HSA & IRA Contributions - these are reported to you on a Form 5498; however, many custodians do not mail out these forms until May (b/c so many make their final contributions for the previous year as late as April 15th of the current year!); so make sure you have this information available
• Non-Cash Charitable contributions - this is a BIG one.  Many folks like to just dump a bunch of "sheets" from Goodwill, The Salvation Army, etc. that are either blank or not descriptive at all about what was given nor the value assigned.  What we need from you is a detailed list of items donated and the values of those items - Goodwill and The Salvation Army have great online tools/worksheets that can be used to value most of the more commonly donated items; if you have very unique items or items that have a much higher value than what is typically applied, we recommend taking pictures of the items donated and keep them with any other proof you are using to arrive at your deductible value
• K-1s - this is becoming more and more common every year.  Many fin'l advisor firms are getting clients invested in various "publicly traded partnerships" - these partnerships must provide a K-1 form to all who are invested in their company each year.  However, many of these forms do not arrive until late in tax season or sometimes not until summertime!  Check with your fin'l advisor to find out if you should be expecting to receive any of these  

Online Client Access - Web Portal

Many of you have become quite familiar with utilizing our Online Client Access (OCA) web portals to view your tax returns and supporting documents.  We have found this to be an extremely valuable tool for our clients!  

This year we have been posting the electronic filing documents to the portals as well, so folks can login to print and sign these documents - which authorizes us to e-file your returns.  We also are now posting payment vouchers (when applicable) as well as estimated payment vouchers (for those that will need to make ES payments in 2012).  Now all your tax-related documents will always be in one convenient place that you can access anytime, anywhere! 

We are modifying our login credentials so that we can more easily help you in the event you forget.  As we prepare your tax returns this season, we will be updating your login credentials and will of course notify you how to access the OCA web portal going forward.

We are also posting invoices to the portals and you can now pay your invoice online if you desire!

Business Deductions

As we are preparing many business tax returns, including many Sole Proprietor (Schedule C) returns, we wanted to briefly remind folks of the IRS rules regarding what makes an expense a viable business deduction:   

RMDs!

For those of you who have or are turning 70 within the past or next year, this is just a reminder that you must begin taking distributions from your retirement accounts!  These distributions are referred to as Required Minimum Distributions (RMDs) and they penalties are very steep (50%) for failing to do so in a timely manner. 

We used to feel pretty confident relying on the fin'l institutions/custodians that hold are retirement funds to notify us of these requirements when necessary; however, I have seen too many cases recently where they have failed to do so! 

If you or anyone you know has turned, or will turn 70 within the past/next year, have them contact us to discuss the RMD requirements.