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Patience, Priorities and Persistence – in Tax Season

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March 25, 2015

- April 15, Taxes Due

laptop computer with bandages - computer repair, or online healthcare conceptWhy would I think these three words, patience, priorities and persistence, have anything to do with tax season? Do you think these words might also apply to the IRS? Very recently, yes during tax season, I came back from a business meeting to find my office computer server had crashed. If you are one of my clients who had a tax appointment with me the third week of March, you know how our time was spent. Tax season time is limited and I meet with several clients every day, six days a week. Sundays, after church, I work on completing returns whose outstanding information had been received. Every day in tax season is like a week in any other job. I easily spend 90 hours a week during tax season! Usually I sit down with a client and together we build your tax return. I enter your tax data as we talk about things that apply to your unique tax situation. But after my server crashed, I was temporarily unable to access the professional software I rely on to craft your accurate return, I couldn’t even send or receive email!  YIKES! Here’s where establishing priorities comes in…. Could my server be repaired? Would my server need to be replaced?  I placed an emergency call to my trusted computer technician and he came to my office on Monday.  Computer Doctor, Patrick (not his real title), took my sick machine to what I call his ‘high tech hospital’ to diagnose the problem. Knowing I had a full calendar of appointments, and April 15th was only four weeks away, I had to make the best use of the time available. Rescheduling appointments was out of the question. Using the client tax organizer I send each of you right after Christmas, I gathered the tax information I would later enter into the computer. I had great conversations with my clients and we got to know each other even better. I leaned that even McDonald’s has to close their doors when their computers are down. Kitchen timers and cash registers are computer driven. Patrick called with good news and bad news. The good news was that my client data was safe, secure, and uncompromised. Protecting my data from breeches and doing frequent and regular backups really paid off. I did need a new server. Patrick would load my data on the new server and install it for me on Saturday. A whole week without tax software access made me think back to the early days when I used pencil and paper tax forms. Preparing returns “by hand” is not an option today. I learned how to quiet my racing mind by taking deep breaths. During my “down time” I completed some administrative work that is usually saved for after April 15th. I learned firsthand the true meaning of patience. I took a good look at what could be done and prioritized what would be done first. With the installation of the new server, it is time to practice persistence. Now I can enter that tax data I gathered during our appointments. As soon as my electronic filing cabinet (my data storage software system) is restored, I will print the tax returns everyone is waiting for. Soon these tax returns will be electronically filed to the IRS and the tax cycle will be complete.
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APRIL 15th Is Over – Now What? (Part Three)

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April 30, 2014

- April 15, Charitable Giving, contribution, Deductions, IRS Audit Help, Tax Audit

donating“Contributions” is one of the deductions the Internal Revenue Service likes to audit, examine, or verify. Why is that? Because not everyone is honest. Some people take more of a deduction than they actually give. People ask me, what is the standard? What is the average? The only standard is the standard deduction based on your filing status and your age if you are 65 or older.. If you choose to itemize your deductions, there is no automatic deduction. You are allowed to claim a deduction for what you actually gave. BUT you need to be able to prove your deduction. You must have evidence for what you are claiming. That is not difficult when you get a receipt from the qualified charitable organization. You cannot verity the cash you leave in the donation plate or collection kettle. You can show cancelled checks and credit card statements, but those are not sufficient proof for the IRS. The Tax Auditor wants to see a receipt from the charity. Too many people have cheated on their tax returns and so the IRS tightened the rules. How can you verify what you give in the form of NON-CASH contributions? Just what is a non-cash contribution? I use the technical term “Stuff”. We all have stuff that is crowding our closets or cluttering our homes. And our “trash” is often someone else’s “treasure”. Used clothing and household items must be in good condition or better to be deductible. Charities will receive anything you want to give them. What they cannot use themselves, they will give to another organization. Give, just don’t try to deduct items in less than good condition. The fair market value of used personal items is usually much less than the original cost and depends on the condition and usefulness of the item donated.  Favorite websites I recommend to help determine the fair market values are www.salvationarmyusa.org and www.goodwill.org. When you decide to give away the good stuff you no longer need or want, take these simple money saving steps to support your deduction.  1. Make a list of the items you set aside BEFORE you put them in the box or bag

            a. What are you giving away (Describe each item.)

            b. What condition is each item? (Good? Excellent? New?)

            c. What is this thing worth today? (Use garage sale or thrift store values.)

            d. How many of each type of thing are you giving away?

            e. What is the name and address of the charitable organization?

            f.  What is the date of this contribution? (Note each date you donate.)

     2. Take a photo of what you are giving away to support the list you are making. We know a picture is worth a thousand words, but you need the list, too. This list is required when your non-cash contributions are more than $500. But even if your non-cash contributions are $500 or less, the IRS can still audit your deduction. Protect yourself. Protect your wallet. Protect your deduction.  Make all the contributions you want. Don’t let the tax laws turn you into a “Grinch”. If you feel this is too much work for you, you can skip the paperwork. But if you choose to skip the paperwork, you should skip the deduction, too.
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APRIL 15th: THE BIG TAX DAY OF THE YEAR!

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April 10, 2014

- April 15, Tax advisor, Taxes Due

april 15Holy 1040, Tax Man! If you have already filed your 2013 tax return, you have nothing to worry about. While some of your friends are burning the midnight oil trying to finish up their tax returns, you can relax.  Next week’s blog is just for you. But, if you haven’t filed your tax return yet, the deadline is just a few short days away. What do you do first? First, find all of your income documents for 2013. These types of papers include  your W2 form from your employer, your bank statement showing interest income earned on your account, unemployment benefits received, alimony from your ex-spouse. All income is taxable unless it is specifically excluded. Child support you received is not taxable income and it is also not deductible by the person who pays it. What if you don’t have the papers you need?  Or what if  you can’t find, all of the papers you need?  Is filing an extension a good choice for you? What you need to know about extensions is this. An extension will only allow you more time to file your paperwork. An extension will not allow you more time to pay the taxes that are due on April 15th. If you usually get a refund, and if your income and withholding are the same this year as they were  last year, it may be safe for you to request an extension. But if you wind up owing taxes when you do file your tax return, your return will be considered filed late. Your taxes will be considered paid late. You could owe a penalty for filing late and you could owe another penalty for paying your taxes late. Plus, you will also owe interest on taxes that are not paid on time. If you think you might owe tax, are you able to make a payment with your request for extension? If you wind up having paid in more than was needed to cover your tax bill, you can request that overpayment be refunded to you. You can also request an overpayment be applied to next year’s tax. If you are having trouble getting your paperwork together, you will want to be sure to go to my website, www.BulletProofYourTaxes, next week. Check out the blog posts. I’ll be writing another article specifically on how to organize your important tax documents throughout the year. Some people thrive on the adrenalin rush. But if you are practicing “just in time” management, you may not even know the bliss in surrendering to the peaceful flow of life. Like many of my colleagues, I am deadline driven. April 15th is certainly another of those deadlines. I invite you to remember the nursery rhyme “Row, Row, Row Your Boat.” It encourages us to row our boat, but also to row it gently down the stream. Not upstream. Not against the current. And row your boat merrily. Enjoy life. We only have this moment. And we will never have it again.
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