What do I do if I
receive a notice from the IRS about my taxes?
Don't panic! the first thing to do is carefully read the
notice - to determine why it was sent, what the IRS is
requesting, and what they want you to do. It may be nothing
of importance; it may even be a notice in your favor. After
reading it you should bring it to our attention.
How do I find out about my refund?
The best way is to use the Check Your Refund link from the
Resources pages of our website! To look up the status of your
federal or state refund, you will need your social security
number, filing status, and exact amount you're expecting
back.
How long do I keep my records and tax
returns?
You should keep your records and tax returns for at least 4
years from the date the return was filed or the date the
return was required to be filed, whichever is later. It is
recommended that you keep these records up to 7 years if
possible.
Can I deduct expenses for a business run out of my
home?
If you use a portion of your home for business purposes, you
may be able to take a home office deduction whether you are
self-employed or an employee. Expenses you may be able to
deduct for business use of your home may include the business
portion of real estate taxes, mortgage interest, rent,
utilities, insurance, depreciation, painting, and repairs.
You can claim this deduction only if you use a part of your home regularly and exclusively:
Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses.
What is the difference between a C and an S
corporation?
A C Corporation and an S Corporation are exactly the same in
respect to liability protection. The difference is in how you
are taxed. A C Corporation has what is referred to as a
double taxation. First the corporation is taxed, and secondly
the dividends are taxed on the shareholders' tax returns.
An S Corporation is not taxed at the corporate level, only at
the shareholder level. Most small businesses are eligible to
file as S corporations. But the appropriate election must be
made.
What are the consequences of early withdrawals from
my retirement plans?
If you withdraw money from a 401(k) or an IRA before age 59
1/2, the distribution is taxable and there is a 10% penalty
on the taxable amount. The main exceptions that let you
withdraw money early without penalty are as follows:
What do I need to keep for my charitable
contributions?
First, is your contribution cash or non-cash?
Remember all contributions must be made to qualified charitable organizations.
If I donate my vehicle to charity, how much can I
deduct on my tax return?
In the past there were a lot of charities asking you to
donate your car, and there were a lot overinflated appraisals
of the fair market value for these vehicles. But recently the
IRS has gotten stricter on the way you determine the value of
your car. Now you must claim the actual amount the charity
received at an auction to sell the car, and the charity
should give you timely acknowledgment to claim the deduction.
If the vehicle is actually used by the charity instead of
sold at auction, then you may claim the vehicle's fair
market value.
What are the differences between a Roth and a
conventional IRA?
A traditional IRA lets you deduct contributions in the year
you make them, and the distributions are included as income
on your return when you withdraw from the IRA after reaching
age 59 1/2. A Roth IRA does not let you deduct the
contributions, but you also do not report the distributions
as income, no matter how much the Roth account has
appreciated. With a Roth, you can exclude the income earned
in the account from being taxed.