1. How long will my tax appointment last?
-For your first visit, we ask that you allow 1 to 1.5 hours. We will review your income and ask many questions about your personal situation, so we can claim all of the relevant deductions for you. We also encourage you to bring a list of any questions that you may have.
2. How much does it cost?
-The fees associated with preparing your tax return can vary widely based on the tax forms needed and the time required to review and decipher your records. Having your records neatly organized leads to a reduced cost for you.We are not able to give you an exact price for your tax return until we complete the return; however, we can typically provide a range based on your situation before we start.
3. What should I bring to the tax appointment?
-Bring this packet with you and all supporting documents, including W-2 and 1099 statements. Certain lines on the organizer we provide may not apply to you, so simply leave them blank.
4. How many exemptions should I claim on my W4?
-A good rule of thumb is to use the IRS website and subtract 2.
5. Who can I claim as a dependent?
-You may claim an exemption on your tax return for each one of your dependents. Qualifying dependents can include your child, stepchild, foster child, sibling or step-sibling, or any of their children, such as your grandchild for example. In order to qualify for an exemption, the dependent must be under 19 or be a full-time student under age 24. The dependent must live with you for at least six months a year and may not provide more than half of his or her own support.
You may also claim other relatives and full-time members of your household as dependents:
- if they are citizens or residents of the U.S. or residents of Canada or Mexico,
- if they did not file a joint income tax return with anyone else,
- if you provided over half of their support, and
- if they have less than $3,400 of income for the entire year.
Relatives who can qualify as dependents without having lived in your home for the entire year include children, grandchildren, stepchildren, siblings, half siblings, step-siblings, parents, grandparents, great-grandparents, stepparents, aunts, uncles, nieces, nephews, fathers-in-law, mothers-in-law, sons-in-law, daughters-in-law, brothers-in-law or sisters-in-law.
6.How long should I keep my old tax returns?
-You may want to keep your old returns forever, especially if they contain information such as the tax basis of your house. In many cases, keeping them for the previous three or four years is sufficient.
If you discard an old return that you find you need later, you can get a copy of your most recent returns (usually the last six years) from the IRS. You can Request a Transcript directly from the IRS website or complete Form 4506, Request for Copy or Transcript of Tax Form.
7. What other types of tax records should I keep?
-You need to keep some other types of tax records and receipts because they indicate how much you paid for something that you may later sell.
Keep the following types of records:
- Records of capital assets, such as coin and antique collections, jewelry, stocks, and bonds.
- Records regarding the purchase and improvements to your home.
- Records regarding the purchase, maintenance, and improvements to your rental or investment property.
8. How long should I keep these records?
-You must keep these records as long as you own the item, so you can prove the cost you use to figure your gain or loss when you sell the item. For example, if you purchase an antique for $1000.00 and later sell it for $2500.00, you are only liable to pay tax on the gain ($1500.00) provided you can prove the original purchase price.
9. Are there any non-tax records I should keep?
-There are other records you should keep, even though they don’t appear to have any use for your tax returns. Here are a few examples:
- Insurance policies: To show whether you were to be reimbursed in case you suffer a casualty or theft loss, have medical expenses, or have certain business losses.
- Records of major purchases: In case you suffer a casualty or theft loss, contribute something of value to a charity, or sell it.
- Family records: Such as marriage licenses, birth certificates, adoption papers, divorce agreements, in case you need to prove change in filing status or dependency exemption claims.
- Certain records that give a history of your health and any medical procedures, in case you need to prove that a certain medical expense was necessary.
- These categories are the most universal and should cover most of your recordkeeping needs. However, everyone’s needs are unique, and there may be other records that are important to you and your situation.
10. I contributed cash to someone; can I claim it as a charitable deduction?
11. What is an enrolled agent?
-From the IRS: “An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. They must adhere to ethical standards and complete 72 hours of continuing education courses every three years.
“Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.”
When you hire Waddy for tax preparation and consulting, you get the peace of mind that comes with working with an enrolled agent.