PO Box 1180, Templeton, CA 93465
STOCK & MUTUAL FUND STATEMENTS
If you made some sales or if your broker or mutual fund did it for you, you have some reporting to do on your return. Interest, dividends, and capital gains will have to be reported on your return. You’ll get a form 1099 from your broker/bank/fund/etc. Keep this form with your tax papers. If you sold any investments (stocks, bonds, mutual funds, etc.) We’ll need to know four things about it. 1. When did you buy it? 2. When did you sell it? 3. What did you pay for it originally? 4. What did you get for it when you sold it? Most of the time your form 1099 will show you when you sold it and the sales price. You’ll have to do some looking for the date of purchase and what you paid for it. If all else fails, call your stock broker or mutual fund and get that information. If it’s a mutual fund and you actually get someone on the other end of the phone, ask them for the ADVERAGE COST BASIS for that sale. Year end statements can also be helpful. Check and see if your records are complete for tax reporting. If not, start looking for the paperwork you’ll need.
FORM W-2 & 1099
When you get these forms please check them over carefully. Is your Social Security number correct? Do they show amounts for Fed and State taxes withheld? Social Security withholding? Is there an amount shown for SDI? In some cases the form 1099 must be filed with your return just like your W-2. These forms are what the IRS computer matches when your return is filed. If there is a mistake on one of them, call the originator and have them issue a corrected copy to you and the IRS. Please have these forms available when we meet to do your tax return.
SPEND THE MONEY-TAKE THE DEDUCTION
Don’t shy away from a single deduction because you fear that some bureaucrat somewhere will question it. If you spend the money and its deductible, put it in your tax return. If you don’t have a receipt, we’ll talk about how to get the deduction into your return. Case law and the IRS will allow deductions without receipts if you have a “reasonable way of estimating the expense”. It doesn’t apply to entertainment expenses or where the code requires specific documentation. As with everything else on your return, use some common sense but TAKE THE DEDUCTION!
IRS NOTICES YOU MAY RECEIVE
The IRS is a huge organization with a lot of little cubicles. Each one of these cubicles has the ability to send you a notice in the mail. Some of these notices just ask for confirmation of information already in your return. But then some times one cubicle has no clue what the other cubicle is doing. That’s when it gets confusing. If you get a notice from the IRS, first check to see what tax year they are talking about. You usually can find that in the upper right hand corner of the page. Next, see what they want. You may have already sent them the information. Check your copy of the return and see if what they are saying is correct. A lot of the time it’s not. If you have any problem with understanding the notice, call us. Usually we can figure it out over the phone and come up with a solution. If that doesn’t fix it we’ll see what else is needed to resolve the problem. In any case, RELAX. The IRS sends out more and more of these notices each year. Just because you get one doesn’t mean you owe them anything or did something wrong on your tax return.
FILE EARLY
File your tax return as early as you can. Even if you end up owing some money. We can file your return and you don’t have to send them the money until April 15th. Should you have a problem with the balance due, the installment plan is automatically granted to you in most cases. You just have to ask for one when you file the return. If you have a refund coming, get it in your bank where it will do YOU some good.
EXTENSIONS
Unless there is a compelling reason to file for an extension, don’t. Our experience is that those of you who file extensions usually owe money with your tax return. Putting off the filing until October 15 only adds insult to injury for the penalties and interest that you pay when you do finally file. Save some money………file on time, even if you owe them money.
BACK ISSUES OF TAX RETURNS We provide all clients with a copy of their tax return when it’s filed. Should you need an additional copy of your tax return We’ll be happy to print one out for you. Or send one to you by email. We’ll need to charge you $50.00 to do it though. The fifty bucks will cover the cost of reproducing the return and getting it to you. It’s no problem to do, it’ll just cost you fifty bucks to get it done. Better yet, remember where you put it and save the fifty bucks. Should you need a copy for a third party, I can send the copy to you and you can provide copies to whoever needs them.
FRAUD-SOME THINGS TO KNOW!!
THE IRS DOES NOT CALL ANYONE AND TELL THEM THAT THEY OWE MONEY AND ARE ON THEIR WAY OVER TO COLLECT!!! IRS WILL SEND YOU NOTIFICATIONS IN THE MAIL! SHOULD YOU GET A CALL SAYING THEY’RE FROM THE IRS OR ANY LAW ENFORCEMENT AGENCY WANTING YOU TO PAY YOUR TAXES, HANG UP, IT’S A SCAM.
FOREIGN BANK ACCOUNTS
The reporting requirements for assets held overseas are increasing and the penalties for failure to report them are increasingly harsh. If you hold any type of foreign assets, other than through a U.S. broker, including bank accounts, securities accounts, or other off shore accounts, bring that to my attention at our appointment. If you’re not sure, let me know anyway.
CRYPTO INVOLVEMENT
If you have ANY dealings with Crypto currency, NFT's, stabelcoins or anything to do with a Block Chain in it, you will have some reporting to do.
Normally you will receive 1099's showing your activity for the year. Don't ignore these forms!
All things Crypto are being treated by the IRS as capital assets and as such may require you to report your activity on your return.
The IRS considers a digital asset as: "ANY DIGITAL REPRESENTATIONS OF VALUE THAT ARE RECORDED ON A CRYPTOGRAPHICALLY SECURED DISTRIBUTED LEDGER OR ANY SIMILAR TECHNOLOGY" That would include NFT's virtual currencies, stablecoins, and P2P's. Along with ANY asset with the characteristics of a digital asset.
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