Posts Tagged ‘Tax preparation’


Are You Ready For Year-End?

In Accounting & Finances,Business,Taxes on December 14, 2011 by Sufen Wang Tagged: , , , , , , ,

The end of the year is almost here and it’s the perfect time for business owners and individual tax payers to dust off their financial documents and confirm that everything is in order. You’ve got a lot to do, so let’s get started before those April tax showers come storming in! 
Business Owners:
You’ll need to review all of your vendor payouts for the year: any vendor who has provided you labor services for more than $600 must be reported to the IRS via Form 1099. As a rule of thumb, always ask your vendors, regardless of the amount of their services, to complete a new W9 at the beginning of each calendar year; so that you do not have to chase them at year end for information. The W9 provides their legal name, address, and tax payer ID – whether it’s an EIN number or a regular social security number – and also requires the vendor to claim responsibility for any taxes due from payments issued to him.
Check your payroll to ensure payments to your employees have been recorded correctly throughout the year, any corrections may be still processed onto their year-end W2’s.  Also, make sure that your payroll taxes have been submitted to the proper governmental agencies on a timely basis, and better take care any late payment before you close your books for the year.  Any year-end bonuses and/or profit sharing to officers and employees must also be processed and to be included in their individual W2’s, and recorded as business expense accordingly.

Review your retirement plan, i.e, 401k Plan, if you have one.  Make sure that all of the employees’ deferral have been deposited into their accounts; and any and all profit sharing or employer matching funds have been accurately distributed accordingly.The good news is that those profit sharing and/or employer matching distributions within a retirement plan are actually business write-offs and can help ease your year-end tax liability!
 Take the time to reconcile your business checking and money market accounts with their corresponding bank statements – that means making sure the interest income has been recorded. Then move on to your credit card accounts and verify any and all business related charges and finance fees are in the record books. You should do the same with your cash expenses (i.e. count the petty cash drawer one last time) and dig out those receipts you knew would come in handy to support any expenditures.

Moreover, any capital expenditures?  Section 179 will allow you to deduct a large amount of assets (expenditures) that you purchased throughout the year for business use.  Again, make sure you have the proper receipts and purpose of the equipment clearly stated for your tax preparer. 

Last but not least, the company cars are going to require a little inspection. Always reexamine the mileage log and odometer of what are supposed to be strictly business-used vehicles; your tax preparer will need this information to complete your business tax returns.
Individual Tax Payers:
Now where did you put those year-end W2’s? Your tax preparer will ask you for them, along with childcare-related expenses, and interest income received and mortgage payment 1098’s from your financial institutions. Keep an eye out because these documents must arrive on your doorstep by January 31.  Next is the numbered forms category, check for 1099’s received from your investment accounts, such as mutual funds dividends and/or interest received for the year, and any stocks sold with their proper gain or loss data. 
You can deduct any charitable donations you made during the year. Unfortunately, this does not include the time you spent doing laundry and taking the kids to school. Most charity organizations will issue a year-end summary of funds received from you by January 31. Any other small donations to Goodwill, Salvation Army, etc. must have a receipt with a description of the donated items and their estimated value.
To all the homeowners out there, do yourself a favor and confirm that you recorded your property tax payments. If you own rental properties, be sure that the collected rent has been properly documented as income, and related expenditures noted as rental expenses – this should include the property taxes you paid in the calendar year. While you’re searching through your “Property” file, if you refinanced, purchased, or sold any real estate this year, set aside your final closing document issued from the escrow company for your tax preparer. Please note that this must be the final closing statement and NOT the estimated statements.

Finally, gather up all of your medical expenses, doctors and medicine expenses alike.  They are tax deductible if you are filing itemized personal income tax returns.  Make sure you have the proper receipts to support your claims.  Dont’ forget those glasses and dental appointments you had throughout the year!

Now you’re ready to welcome in the new year with a (temporarily) clean filing cabinet!


On the Year End,
Sufen Wang
Wang Solutions


Using the Title “Registered Tax Return Preparer”?!

In Accounting & Finances,Business,Taxes on October 23, 2011 by Sufen Wang Tagged: , , , , , , ,

 The IRS says Nobody Can Claim the Name – Just Yet



Think you have what it takes to be called a Registered Tax Return Preparer (RTRP)? At the moment, nobody does! In case you missed it, the IRS issued a reminder that NO ONE can currently claim to be a “Registered Tax Return Preparer,” even if they have a provisional preparer tax identification number (PTIN).
Cutting corners (and words) by calling yourself a “Registered Return Preparer” or “Registered Tax Preparer” isn’t going to cut it either. In order to become an official RTRP, an individual must have a valid PTIN, complete 15 units of continuing education, pass the
IRS competency examination, and also pass the tax compliance and suitability checks. Sounds simple enough – except for the fact that the examination is not yet available and the IRS is still developing the suitability check!

Although the IRS released the specifications for the exam, the agency hasn’t stated when the test and the check will be up and running. Since NOBODY can satisfy all four of the RTRP requirements, at this point, NOBODY may designate her/himself as a registered tax return preparer. That means EAs, CPAs, and other individuals exempt from taking the IRS competency examination and the 15 education units shouldn’t print “Registered Tax Return Preparer” on their business cards either.

Don’t turn a blind eye to these IRS requirements– especially since all 730,000 PTIN holders are subject to the advertising and solicitation rules under section 10.30 of Circular 230. Advertising yourself as an RTRP when you really aren’t registered could result in a trip to the Office of Professional Responsibility, a monetary penalty, and even a disqualification from the practice. Now stop reading and go study and get ready for the IRS upcoming competency exam!

So, folks, don’t get fool by titles or advertised names, check out your tax preparer’s credential before you acquire the services.
On the Money,
Sufen Wang
Wang Solutions


Counting on Your Tax Refund to Pay for Tax Preparation?

In Accounting & Finances,Business,Taxes on July 9, 2011 by Sufen Wang Tagged: , , , , ,

Prepare to Be Disappointed…

Out of sight, out of mind is not always a good idea – at least when it comes to paying for your tax preparation. The IRS seems to agree. David Williams, the director of the IRS return preparer office, announced on June 28 that the Service would not pursue the option of allowing taxpayers to use a portion of their tax refund to pay for tax preparation services.

The concept was originally proposed last year and would have offered taxpayers an alternative to extra number-crunching and out-of-pocket expenses during the already-stressful tax season. However, “Since then, the IRS has conducted outreach to numerous parties, including consumer advocates and industry groups,” Williams said. “During that outreach, the IRS heard a variety of views, some supporting this additional option for consumers, with others raising operational and/or policy concerns.”

Consumer groups especially opposed the idea because “predatory tax preparers” might take advantage of the fact that a taxpayer’s refund is not as visible or accessible once it has been turned over to the preparer. They could then charge more for tax preparation without their client’s knowledge.

The Service’s decision to reject the option won’t do anything to help the headaches that arrive during tax-preparation time. On the other hand, at least taxpayers won’t have to worry about their preparers taking more than their fair share.

Just remember that tax preparation costs money, any way you look at it, and sometimes it’s best not to delay the inevitable.

On the Money,
Sufen Wang
Wang Solutions