IRS Tax Forums in Las Vegas

We attended the IRS Tax Forum in Las Vegas August 16 - 17 - 18.  Like all meetings some good info, some bad and some so-so.  One area the IRS has been working on is the document requests for audits now includes a copy of QuickBooks on DVD, CD or flash drive.  They want the Admin and password to access the entire program. 

Our concern is not the clients that we do their work in QuickBooks but the clients that do their own QuickBooks input.  With the Admin copy the IRS can open and review every entry in accounting and payroll.  They can match checks written to the W2s in payroll to make sure they balance.  Which can lead to referrals for audits on your employees.

The IRS was trying to assure us tax preparers that they would not look at anything other than the years being audited.  We all know that no one from the government would ever lie to us.

If you don't hire KatTax you should hire someone to review and clean up your QuickBooks files.  If you think your QuickBooks are in great shape check the account for Undeposited Funds or does your bank balance match your bank statement.

IRS Notices don't panic call KatTax

Internal Revenue Service sends millions of letters and notices to taxpayers, but don't panic.  KatTax can help ease your worries.

Here are some simple steps to take.  Call KatTax and make an appointment to bring us the letter.

Don’t panic.  There are number of reasons the IRS sends notices including payment of taxes, changes to your account or a request for additional information.

What we do is review the letter and compare it with the information on your return.  Sometimes the IRS is right.  Many times they are not.  It is important to respond as to why we disagree with their letter.

Most correspondence can be corrected without calling or visiting an IRS office.  However, if we have to call the IRS we need a copy of your tax return, the correspondence and a power of attorney to allow the IRS to talk to us about your tax return.  Even though we prepared the return the IRS still wants a power of attorney.  

Remember the IRS will not go away.  Ignoring letters from the IRS can result in IRS taking money from your wages or your bank account. 

If you receive a letter from the IRS do not delay call KatTax today.

Getting married? Some tax ideas that may help.

If you recently got married the last thing on your mind is taxes.  Here are some tips you need for tax time.

Notify the Social Security Administration of any name change.  Notify the IRS of your new address.  Notify the U.S. Postal Service of your new address.  Notify your employer of your name and address change.  Check your withholding since your combined income may put you in a higher tax bracket.     

Now that you are married you can file jointly or separately.  Usually joint filers receive bigger refunds.  Ask KatTax when we do your return and we can tell you what filing status works best for you.   

Back to School Tax Tips

Back-to-School Tax Tips 

If you are going to college payment deadlines for tuition and other fees are coming up fast. If you want to deduct the expenses or apply for credits keep your receipts.  The following four items may benefit you at tax time.

1. American Opportunity Credit       The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education. Forty percent of this credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes. Qualified expenses include tuition and fees, course related books, supplies and equipment.  Can include graduate school as well.
2. Lifetime Learning Credit       Lifetime Learning Credit of up to $2,000 for qualified education expenses paid for a student enrolled in eligible educational institutions. There is no limit on the number of years you can claim the Lifetime Learning Credit for an eligible student.
3. Tuition and Fees Deduction  This deduction can reduce the amount of your income subject to tax by up to $4,000 even if you do not itemize your deductions.
4. Student loan interest deduction       You may be able to deduct interest paid on a student loan used for higher education during the year. It can reduce the amount of your income subject to tax by up to $2,500, even if you don’t itemize deductions.

For each student, you can choose to claim only one of the credits in a single tax year. However, if you pay college expenses for two or more students in the same year, you can choose to take credits on a per-student, per-year basis. You can claim the American Opportunity Credit for your daughter and the Lifetime Learning Credit for your son.

You cannot claim the tuition and fees deduction for the same student in the same year that you claim the American Opportunity Credit or the Lifetime Learning Credit. You must choose to either take the credit or the deduction and should consider which is more beneficial for you.

Income limits also apply to these credits so please check with KatTax at 702-796-1040 to determine your eligibility.