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A: No. Filing an extension only extends the time you have to file your tax return. It does not extend the time you have to pay your tax liability. There are various options available for paying your tax liability however. IRS now accepts credit cards (there is a fee) and Installment agreements (there is a fee). You should speak with a tax professional for further guidance.
A: You should file the returns you haven’t filed. You’ll pay interest and probably a penalty (unless you’ve got a really good reason). As long as you come clean voluntarily, you should avoid any truly serious trouble. By the way, there’s no statute of limitations on non-filed returns. Therefore, if you don’t file returns, interest and penalties continue to accrue.
A: Generally speaking, the following are recommended periods of retention for various documents:
Tax Returns (uncomplicated), W-2's, 1099's, Cancelled checks supporting tax deductions, Bank deposit slips, Bank statements, Charitable contribution documentation, Credit card statements, Receipts, diaries, or logs pertaining to tax returns.
Ownership Period + 7 Years
Investment purchase and sales slips, Dividend reinvestment records, Year-end brokerage statements, Mutual fund annual statements, Investment property purchase documents, Home purchase documents, Home improvement receipts and cancelled checks, Loan paperwork.
Tax Returns (complicated), Retirement plan annual reports, IRA annual reports, IRA nondeductible contributions (Form 8606), Divorce documents, Estate planning documents.
A: There are many advantages to having your tax return prepared professionally. Since your return will be filed electronically, you may receive any potentional refund much quicker. Also, professional tax preparers are use to working with tax returns and are familiar with many IRS procedures that you may not be. Professional tax preparers may be able to help reduce your tax liability.
A: You will need to bring all the relevant tax documents that will be needed to complete your tax return. These could include, but may not be limited to:
|* W-2's||* Childcare records|
|* 1099-B's||* Medical Expense records|
|* 1099-DIV's||* Mortgage/Closing documents|
|* 1099-G's||* Home Improvement documents|
|*1099-INT's||* Proof of Charitable Contributions|
|*1099-MISC's||* Receipts for Non-Reimbursed Business Expenses|
|*1099-R's||* Self-Employment Income/Expense records|
You should also bring your previous two years tax returns so that the preparer can see how you have filed your returns in the past.
A: Fees can vary depending on the complexity of the tax return. A tax return that involves nothing more than one W-2 will be less expensive than a return that involves income from a rental property. The more work and forms that are required to complete you tax return, the more the charge will be.
Understanding the rules
Many taxpayers are required to maintain a certain personal appearance or wear special clothing for work. However, not all your purchases for work-related attire or personal grooming reap a tax deduction. If you are required to wear a uniform or other special clothing that has the name of your employer or some other logo on it, that cost is deductible as a miscellaneous itemized deduction.
|If you are disposing of property used in your business, you may want to consider a like-kind exchange to defer the taxable gain on the sale.|
Nontaxable combat pay is considered compensation
Members of the military serving in Iraq, Afghanistan, and other combat zone localities can now put money into an IRA, even if they received tax-free combat pay. Under the Heroes Earned Retirement Opportunities (HERO) Act,
|Go to your tax appointment well organized. Have all your income statements such as W-2s and 1099s separate from your expenses. Make sure you have all the proper social security numbers for dependents, as well as their names as they appear on their social security card. Careful organization will save you time come tax season.|