Duda’s Tax Time Checklist (Again)

Duda’s Tax Time Checklist (Again)

In early January, I sent a “checklist” email to our Troy & Nearby Cities tax preparation business list(and if you’re not receiving our weekly emails, you really should fill out the quick form here on this page to receive a copy of one of our free reports — we’ll add you to our list as well, so you’ll be the among the first to receive important updates and exclusive offers from us), and it was one of our most popular messages. I guess it was handy!

Putting together this list for those who are preparing taxes in the Troy & Nearby Cities area may run slightly counter to my business goals — after all, we do get paid to do this on behalf of clients! That said, our mission is to ensure that EVERYONE in the local Troy & Nearby Cities area saves the most possible when the IRS comes calling. Some of these may seem small, but trust me when I say that they add up.

But today, I would like to take a minute here to address you looking for the best tax preparer in Troy & Nearby Cities who haven’t yet made the decision to use our services.

You see, we’ve helped many Troy & Nearby Cities (and beyond) families “make the switch” over to us, year after year. I know that you’ve probably established a rhythm with your current provider (even if it’s not a “good” rhythm), and that you may dread the prospect of having to teach a new tax preparer about your family’s financial dreams and goals.

(By the way, are you using a tax professional who cares about those?)

Which is why this blogpost would be for you. (And if you’re already using us, then you can safely ignore this particular message, and skip to the end where we do have some information for you, perhaps merely as a reminder.)

Many Troy & Nearby Cities families are pulling together their paperwork to deliver to their preparer this week … and before you do that with your existing preparer, I’d like to give you a reason to try us out.

I’d rather not “bad mouth” other tax accountants in the area, but suffice to say that we’ve had to do our share of re-doing other accountants’ work. In some cases, we’ve recovered significant sums during an amendment process, by reviewing an old return (from the last 3 years), and taking advantage of ethical and legal tax credits and deductions which other accountants don’t utilize — whether through ignorance, laziness, or preference.

Duda’s Tax Time Checklist (Again)
“Don’t lower your standards. Instead, wait for people to rise up to your expectations.” -Susan Gale

Yes, this is a long list — but it’s the unfortunate reality of our tax code that it’s not even comprehensive! But these items will cover 95% of our clients. Really, this is for ensuring that we’re able to help you keep every dollar you can keep under our tax code.

Personal Data
Social Security Numbers (including spouse and children)
Child care provider tax I.D. or Social Security Number

Employment & Income Data
W-2 forms for this year
Tax refunds and unemployment compensation: Form 1099-G
Miscellaneous income including rent: Form 1099-MISC
Partnership and trust income
Pensions and annuities
Alimony received
Jury duty pay
Gambling and lottery winnings
Prizes and awards
Scholarships and fellowships
State and local income tax refunds
Unemployment compensation

Homeowner/Renter Data
Residential address(es) for this year
Mortgage interest: Form 1098
Sale of your home or other real estate: Form 1099-S
Second mortgage interest paid
Real estate taxes paid
Rent paid during tax year
Moving expenses

Financial Assets
Interest income statements: Form 1099-INT & 1099-OID
Dividend income statements: Form 1099-DIV
Proceeds from broker transactions: Form 1099-B
Retirement plan distribution: Form 1099-R
Capital gains or losses

Financial Liabilities
Auto loans and leases (account numbers and car value) if vehicle used for business
Student loan interest paid
Early withdrawal penalties on CDs and other fixed time deposits

Automobiles
Personal property tax information
Department of Motor Vehicles fees

Expenses
Gifts to charity (receipts for any single donations of $250 or more)
Unreimbursed expenses related to volunteer work
Unreimbursed expenses related to your job (travel expenses, entertainment, uniforms, union dues, subscriptions)
Investment expenses
Job-hunting expenses
Education expenses (tuition and fees)
Child care expenses
Medical Savings Accounts
Adoption expenses
Alimony paid
Tax return preparation expenses and fees

Self-Employment Data
Estimated tax vouchers for the current year
Self-employment tax
Self-employment SEP plans
Self-employed health insurance
K-1s on all partnerships
Receipts or documentation for business-related expenses
Farm income

Deduction Documents
State and local income taxes
IRA, Keogh and other retirement plan contributions
Medical expenses
Casualty or theft losses
Other miscellaneous deductions

While some of these statements, and their ensuing deductions, may seem like “pocket change” … just a few minutes of effort can pay a nice hourly rate. And, better in YOUR pockets than in Uncle Sam’s, right?

So, I hope this helps.

Warmly,

Robert Duda
(248) 528-1799


Turbo-Charged Audits and Mistakes — Eliminated By Robert Duda

Turbo-Charged Audits and Mistakes — Eliminated By Robert Duda

Watching the Olympics the past couple weeks from Troy & Nearby Cities tax preparation headquarters (well, not while we’re preparing your taxes, of course!), and on the heels of the Super Bowl, we’ve been treated to some pretty great commercials lately, haven’t we? Some of the spots for the Olympics were downright inspiring.

But, of course, we all know that they are made with the express purpose to cause us to purchase. Either through creating dissatisfaction with our current lot, provoking envy/greed/jealousy/desire or by associating a brand with some really nice feelings.

Now, I’m certainly not one to rail against marketing per se. In a sense, this blogpost on my Team Robert Duda site is marketing (of a sort).

But sometimes that marketing can lead Troy & Nearby Cities-area consumers down a path which isn’t in their best interests. And though my writing this could easily be seen as self-serving, that doesn’t keep it from being true. Here’s what I’m referring to:

Trying to prepare your taxes correctly (and completely) on your own.

I should say that I don’t like to crow about other people’s mistakes — especially other, local Troy & Nearby Cities tax professionals.

In fact, in our line of work, much of what we get to do is to *fix* or alleviate those mistakes, at least when it comes to their tax implications. This year (of all years) carries so many changes that tax software users who fall prey to screaming offers and seductive easy-buttons from the “cheap” options are more exposed to wallet-sucking mistakes, or even an audit.

Do you remember when even the former Treasury Secretary, Tim Geithner, testified about tax irregularities in his own personal returns? Do you remember what DIDN’T help him find those irregularities?

Turbo Tax. (Link to a brief clip of his testimony before the Senate: http://www.youtube.com/watch?v=eKVxGlkPRlo#t=130 )

And he’s not alone here in Troy & Nearby Cities. But there’s a good way to fix that problem…

… and a BIG incentive to do so, by the way, at the end of my Note.
Turbo-Charged Audits and Mistakes — Eliminated By Robert Duda
“Talent is a gift that brings with it an obligation to serve the world, and not ourselves, for it is not of our making.” -Jose Marti

You may have heard me say it before, but it’s true: Did you know that we Troy & Nearby Cities-area tax accountants sometimes joke to one another about how good these online software programs (TaxSlayer, TurboTax, TaxACT, FreeFile, etc.) are for our business? Firstly, they are not as “easy to use” as claimed, and secondly … they cost you an arm and a leg.

You might think they’re cheap. And on the surface, you might be right (though, in the last few years, a $1 Billion class action lawsuit was filed in the federal court in Philadelphia alleging gross misstatement of fees and deceptive standards of the federal “FreeFile” program … so even on the surface, it wasn’t always cheap). But I’m not even talking about the money for the service itself.

Using those programs can end up leaving hundreds, or even thousands of your dollars in the coffers of Uncle Sam … even if you follow all of their instructions to a tee. I see it all the time — frustrated Troy & Nearby Cities-area tax preparation clients bringing in their prior year’s tax return, astonished at all the “hidden money” my staff and I are able to find for them.

Even worse…

Choosing the wrong method, or forms, in filing your taxes can place you directly in the crosshairs for an audit.

Even if you don’t owe a ton of back taxes, you still don’t want your record to show some IRS agent that there has been a discrepancy of some kind in the past, so that red flags begin to fly, and then more bureaucratic people start looking through all of your past tax filings and current income holdings … basically taking your social security number, and poking around in your private life.

(And if you think they won’t do this, read a little online about the increased “enforcement” measures the IRS has been taking the last few years.)

They can do a lot of things you won’t want them to do. However, if you keep a clean slate (no IRS correspondence with you, related to filing your taxes incorrectly), the opportunities for them to mess with your personal stuff will be limited.

Here’s another reason why this is so important … now more than ever. New government regulations in 2013-4 (including the much-delayed ACA regulations), delays in Congressional action, and issues with refund “loans” from the big chains are creating a mess in the tax industry… and the “Big Brand Names” (you know who I’m talking about) do NOT want you to think much about it. In fact, they’re doing all they can this year to hold on to their business, and trust me — it is not always good for you.

Yes, it can be seductive to “go it alone” … to trust a piece of software to point out possible deductions. To trust your work to poorly-trained preparers in a big box office. To protect against your chances of audits through online chatroom support or hourly employees.

But it can be a big trap.

Just ask Tim Geithner.

And once again, allow me to remind you that though we are VERY busy right now, we always have time for you. Give us a call at (248) 528-1799 , and let’s get your tax return started right now…

Warmly,

Robert Duda
(248) 528-1799

Robert Duda Suggests: Take A Test Drive Of Your Retirement Plans

Now that the Super Bowl is over, and the football season is finished, we here in Troy & Nearby Cities tax preparer land can now finally get back to looking forward to football season.

And, of course, the commercials! (Which this year seemed a little … “ok” — though I think I will have dreams of that Doberhuaha for a while.)

Anyway, you may have heard that tax season has officially “begun”. Well, when we here at Team Robert Duda sit down with a Troy & Nearby Cities tax preparation client during tax season, we are picking through history — we are helping you sort through your 2013, and make sure that the numbers match … AND, of course, that YOU are able to take advantage of every possible legal and ethical method to hold on to your hard-earned dollars (or sometimes receive a nice bump in your supply from a refundable tax credit).

But we also like to spend time future-casting.

That means that we get to be ones who dream with you — ones (beside you and your spouse) who focus not just on accurately recording “history” for our Troy & Nearby Cities tax preparation clients but also about the real-world implications for what life will look like down the line.

When we do this, it makes me wonder if Troy & Nearby Cities financial counselors do the same thing with retirement?

In fact, I know that some of them do.

But, on the chance that your particular financial planner only pays attention to the numbers, and doesn’t help you evaluate some of the other components of your retirement situation, here’s a few ideas for some practical things you can do.

Would you add anything to this list? I’d be interested in your comments…

Robert Duda Suggests: Take A Test Drive Of Your Retirement Plans
“It doesn’t matter where you are, you are nowhere compared to where you can go.” -Bob Proctor

Troy & Nearby Cities people over 40 shouldn’t just plan for retirement, they should rehearse for it.  Because retirement can last 20 to 30 years, it’s more important than ever that “pre-retirees” (those who plan to retire in five to seven years) practice how they want to live without work as the organizational focus of their lives:

Try out different retirement lifestyles
For example, many people dream of selling the family home in the Troy & Nearby Cities area and traveling in an RV or going abroad. Practice this by renting a camper and going on the road for a long vacation. You may discover that travel is exhausting or boring to you.

The same holds true for relocation dreams. Rent a home where you think you may want to retire to see if it really is where you’d like to move. The weather may not suit you, or the community may not be your cup of tea. Work out these details before you commit to an expensive change.

Live with your spouse 24 hours a day
Most couples spend much of their early years working and, thus, spending much of their time apart. It may take some time to get used to the other person’s schedule, habits, and routines.

Practice living on that retirement budget.
Most retirees’ income is significantly less than their preretirement income. Add up all the Social Security benefits, pension income, and 401(k) and IRA savings to calculate what you can realistically expect to live on each month. Then live on that amount for a month to determine what changes, if any, you need to make to your plans.

I hope this all helps! To your family’s financial and emotional peace…

Warmly,

Robert Duda
(248) 528-1799

Troy & Nearby Cities Tax Preparation: The Power of Specialized Knowledge

Well, this week I want to tell you a story, and one that, though it is not about our Troy & Nearby Cities tax preparation service per se, will help take some stress off ye olde plate for you and your family.

But before I get there, a few tax items to note…

1) Officially, tax filing is set to begin this Friday, January 31st — nationally, not just here in the Troy & Nearby Cities area. As I have said before, however, this does NOT mean that we cannot start work on your file here at Team Robert Duda (and, in fact, we have already begun files for many Troy & Nearby Cities tax preparation clients).

2) You should be receiving all your W-2’s by the end of the week. If you have not received them all by Monday, contact your payroll department (they may just be behind, after all).

If that is fruitless, we can work with you to create a valid replacement, as well as to alert the IRS to the problem. Don’t try to go that one alone.

In fact, that leads to this week’s Note. As I mentioned above, it’s a good story (an old one, which I’ve re-adapted), and it gives a powerful lesson about the value of your work.

Here we go…

Troy & Nearby Cities Tax Preparation: The Power of Specialized Knowledge
“You must have long range goals to keep you from being frustrated by short range failures.” -Charles C. Noble

Some years ago, one of the major manufacturing companies in this country (rumored to be a local Troy & Nearby Cities-area business, but unsubstantiated) was facing a crisis. The central conveyor belt of its automated assembly line quit running and brought the entire plant to a stop.

Although they tried everything they could think of, and even brought in several consultants, no one was able to get the conveyor belt running again, or even to identify what caused the breakdown in the first place. The company was really in a bind. With on-going overhead, and the loss of production, the company was losing money at the rate of $1,000,000.00 a day.

Finally, after a week of down time, the big brass told the plant manager to call Tom — the mechanical engineer who had retired the year before, after 25 years with the company. The conveyor belt had been Tom’s specialty and primary responsibility.

When Tom got the call, he caught the next flight from the city where he now lived and arrived at the plant the next day. He met with both the local vice president and the plant manager to get as much information as he could as to what had happened and what they had tried. He then walked slowly along the belt until he came to a particular point.

He put his ear against the machine and listened. He asked for a hammer and then gave the machine a swift and forceful blow.

“Give it a try now!” he called to the foreman. The conveyor belt started right up and ran like a dream.

Tom then left and went back home, but before he did, the company vice president told him to send them a bill for what he had accomplished. Two days later, the company received Tom’s invoice for one million dollars!

Thinking that was way too high for the little time Tom had spent to solve the problem, and how he did so with just a single blow from a hammer, the company wrote back and asked Tom to provide them with an itemization. This was Tom’s response:

One hammer blow: $2.00
Knowing where to hit it: $999,998.00

With the receipt of that simple invoice, the company came to understand the reason for Tom’s fee and immediately issued a check to him for one million dollars!

Special knowledge is the key. Although the company’s leaders had to be reminded of that fact by receiving Tom’s invoice, as soon as it did, they knew he was right. They could have given hammers to every employee in the plant and even had the big brass banging on the machine from sunrise to sunset, but it would have done no good… because they didn’t have the knowledge; they didn’t know where to hit it.

This is an old story, told in different ways, with different names and amounts. But it’s powerful for a simple reason: labor is NOT about how much “time” is put into executing a particular solution to a problem — it’s knowing when and how to do it.

In the realm of preparing your tax return, I urge you… do NOT fall prey to the thinking that a software program or forms downloaded from the internet can suffice to enable you to preserve your resources, or properly leverage the multiplicity of credits, loopholes and deductions available.

Give yourself and your family the gift of financial peace of mind during tax season, and do it with a Troy & Nearby Cities tax service who knows how to do it right.

To your family’s happiness…

Warmly,

Robert Duda
(248) 528-1799

Attention Troy Tax Payers: Identity Thieves Want YOUR Tax Return

In a moment, I’ll show you why this is so important for Troy & Nearby Cities tax preparation clients. Because the hits keep on coming for Target Corp, and it’s unfortunate for them because they seem to be a company that works hard at doing things well. In fact, they were on the forefront of “Point of Sale” (POS) security with some new software, but other retailers didn’t join them, so it became cost prohibitive to go it alone.

Oops.

They recently announced that they will be offering a year of free credit monitoring to those who were affected, and this seems to me an effective way of “making things right”. But this crisis has highlighted a bunch of risks that you, as a local Troy & Nearby Cities taxpayer, should understand … and it provides another reason to get your taxes submitted (properly) ASAP.

But before I explain what I mean by that, a couple pertinent things you should be aware of…

Tax documents are trickling out (organizations have until Jan. 31 to send everything your way), the long form 1040 was officially posted recently on the IRS site … and our phone has begun to ring with regularity [(248) 528-1799 in case you need it!].

So make sure you call us soon to set up a time where we can go through your situation with you. After all, would you rather spend 18 hours going it alone, or have your trusted advisor do it for you?

And here’s the list of forms you should be looking for in the mail, and online (from any employer, vendor, client or anyone else with whom you had a taxable transaction last year):
* Wage earners, watch for your W-2 forms, one from each employer.
* “Other income” (like a state tax refund, or government benefits) is shown to you on Form 1099-G
* Prize winnings — Form W-2G
* Most canceled debt (but not all) is reported as taxable. In which case, you’ll get Form 1099-C
… as I’m writing this, I realize the list is extremely long. Here’s a good place for the whole list: http://en.wikipedia.org/wiki/IRS_tax_forms [look under the section “Information Returns”]

So, as if there wasn’t enough incentive to get your taxes prepared by someone in the Troy & Nearby Cities area who knows what they are doing (ahem), here’s another log on that fire…

Attention Troy & Nearby Cities Tax Payers: Identity Thieves Want YOUR Tax Return
“Show me someone who has done something worthwhile, and I’ll show you someone who has overcome adversity.” – Lou Holtz

It may not surprise you to learn that identity theft is annually the number one complaint made to the Federal Trade Commission (FTC). Well, the tax return component of this crime has been heating up.

In 2010, only about 15 percent of all identity theft complaints to the FTC dealt with tax returns. Well, in 2013, that jumped to 43 percent.

All the thief requires is your SSN, a few easily-forged counterfeit documents … and WHAMMO, they’ve got your expected refund.

In essence, to prevent this kind of theft of your refund, or your return filing status, you need to file your return before the thief does. Which is just another reason to start the process with us here in Troy & Nearby Cities, ASAP (Here’s our number: (248) 528-1799 — call us today).

The good news is that the IRS is aware of this problem, and they do have systems in place. If this DOES happen to you, we can help you work with the IRS to get it resolved. Alternatively, of course, you can call the IRS ID Theft Protection Unit yourself at (800) 908-4490, extension 245. The hold times … well, they’re not always fun. There will be paperwork to file and other things you will have to do as quickly as possible.

Which means that it’s nice to have someone in your corner who can handle this kind of thing on your behalf, right?

Other ways to protect yourself
Nobody can *guarantee* that they won’t get victimized, but here are a couple steps you can take to reduce the risk…

  • If you file by mail, go to the post office. Don’t place your documents in an unlocked mailbox in front of your house.
  • If you file electronically, use a secure computer on a secure network (which we happen to have). Never do anything financially sensitive from a public WiFi spot.
  • Get your return done as soon as you can. It really is in your best interest to file as early as possible.

Again, while we can never fully prevent bad things from happening, we certainly can help you cover your bases!

Give us a call today.

To your family’s financial and emotional peace…

Warmly,

Robert Duda
(248) 528-1799

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