Tax Cut and Jobs Act of 2017

The President has signed the Tax Act and it is now law. It is the most sweeping change in tax law in 30 years. Below are some of the major provisions in the new law which are effective 1/1/2018 unless otherwise noted.

1. The top corporate rate on C corporations changes to 21% from 35%.
2. The top individual rate goes to 37% on taxable income over $500,000 for single returns and over $600,000 for joint returns.
3. Unearned income will no longer be taxed at the parents' rates for kids but under the rate schedule for trust and estates.
4. The additional deduction for joint returns goes to $24,000 and for single returns to $12,000. Those over age 65 also still get the additional standard deduction.
5. The deduction for personal exemptions is repealed.
6. The child tax credit is increased to $2,000 for qualifying children under 17. There is another $500 credit for dependents over 17.
7.  Section 529 plans can now cover up to $10,000 of Elementary and High School tuition per student.
8. The 3% of adjusted gross income phase out of itemized deductions has been repealed.
9. The deduction of miscellaneous itemized deductions has been repealed.
10. The limit for mortgage loans for deductible  interest for first and second homes has been reduced to $750,000 for loans incurred after 12/15/2017. Home equity loan interest is no longer deductible.
11. There is a new state and local tax cap of $10,000.
12. The deduction for personal and casualty losses has been repealed except for Presidentially declared disaster losses.
13. Any gambling deductions are limited to gambling winnings even for professional gamblers.
14. Charitable contributions are retained and the adjusted gross limitation increases to 60% from 50%. The 80% deduction for donations for getting the right to buy tickets to college athletic events has been repealed.
15. The medical expense deduction subtraction goes to 7.5% from 10% for 2017 and 2018.
16. Income inclusion and deduction for alimony has been repealed for divorces executed after 2018.
17. No deduction is allowed for moving expenses except for members of the armed forces.
18. The estate tax exemption amount goes to $11,200,000 and is indexed for inflation.
19. The alternative minimum tax exemption for joint returns has been increased to $109,400 from $86,200. For single returns the exemption is now $70,300. The threshold for the phase out of the exemption has also been increased significantly.
20. The Obamacare penalty has been reduced to 0 beginning in 2019 for having nonqualified health insurance coverage.
21. Individuals with pass through businesses such as proprietorships, Sub S corporations, and partnerships get a new 20% deduction from taxable income on their net business income if their taxable income is under $157,500 single or $315,000 joint. If taxable income is above those amounts, then the deduction is phased out completely for businesses in the fields of health, law, accounting, actuarial science, performing arts consulting, athletics, financial services, and brokerage services. Not included in the phase out are engineering and architecture firms.  Other businesses which are not subject to the phase out have a limitation on the deduction of the greater of 50% of wages paid or 25% of wages paid plus 2.5% of business tangible depreciable property. The 20% deduction is not allowed for self employment tax purposes.
22. The section 179 depreciation cap goes to $1,000,000.
23. The bonus depreciation rate is 100% beginning 9/28/17 and includes used property if it is the taxpayer's first use of the property.
24. The new tax act repeals the domestic production deduction.
25. No deduction is allowed for entertainment, amusement, or recreation activities. The 50% deduction for meals and beverage expenses associated with operating a business is still good.
26. The 3.8% Obamacare investment tax has been retained.

Reduce Your Taxes for 2017 Right Now

Very significant tax legislation will likely pass Congress tomorrow. I have prepared a list of key things to do before year-end to minimize your taxes. Please note that failure to take advantage of these opportunities may result in loss of significant tax dollars. For example if you do not qualify to itemize in 2018 (90% of taxpayers won't) then losing the benefit available in 2017 will waste your hard earned money.

1. Pay your 2017 estimated state income and property taxes in full. Make your estimate high to avoid losing benefits.
2. Consider making some or all of your estimated charitable contributions expected for 2018 in 2017.
3. Clean out your garage and your closets. Make donations of clothing and household goods to Goodwill. Keep the receipt and a record of items donated and use the valuation guide at salvationarmyusa.org to value the donation.
4. Organize your tax documents in one file folder for 2017.
5. If you have a business on the cash basis, delay mailing bills until late December so that the payments won't be received until 2018.
6. Buy office supplies and equipment for your business.
7. Increase your 401k contributions to the maximum.
8. Donate appreciated stock to a charity.
9. Do a qualified direct contribution of your required minimum distribution from your retirement account to a charity.
10. Sell securities with losses to offset your capital gains.

Tax Blog

Current law for 2017 is that taxpayers can only deduct medical expenses over 10% of their adjusted gross income. In 2016 that threshold was 7.5% for seniors aged 65 and older. The Tax Act that is currently under consideration by Congress may affect  medical deductions in 2017 also. Stay tuned.

Stock Sales in Senate Tax Bill

The Senate proposal only allows investors to determine the basis of stock sold using the oldest shares first which will generally produce larger capital gains in a rising stock market. This method is termed the first in first out method or FIFO. The other method currently allowed is to direct the broker to sell shares purchased on a certain date or the specific identification method. The Joint Committee on Taxation believes the elimination of the specific identification method will generate an additional $2.7 billion more in taxes over a 10 year period. For taxable mutual funds, the use of the average cost method will still be allowed under the Senate proposal. The change would take effect January 1, 2018.

Senate Tax Bill

The Senate tax bill came out with some differences with the House bill which I discussed last week. Listed below are the significant differences:

1. The state and local tax deduction is completely repealed.
2. The corporate tax rate change to 20% is delayed to 1/1/2019.
3. The medical expense deduction is maintained.
4. The mortgage interest deduction loan cap is maintained at $1 million.
5. The estate tax is not repealed in 2024.
6. There are 7 income tax brackets.
7. The top income tax rate for individuals is 38.5%.
8. Pass through businesses would get a 17.4 percent deduction for non-wage income. Many types of service businesses would not qualify for this deduction.

If both the House and Senate pass their proposals, then these differences would have to be reconciled before the bill is presented to President Trump for signing into law.

Tax Cuts and Jobs Act (TCJA) Proposed House Bill

This proposed bill may be bigger in impact than any changes in the tax code since 1954. It may go for a vote in the House next week and then be sent to the Senate for their changes and approval. The President wants to sign the tax bill before Christmas. Most of the changes are effective January 1, 2018. Some of the more important changes are listed below:
1. Change in the corporate rate to 20% from 35%
2. Repeal of the alternative minimum tax
3. Increase of the estate exclusion to $10 million from $5.6 million
4. Repeal of the estate tax on 1/1/2024
5. Change in gift tax rate to 35% from 40% on transfers over $10 million
6. Increase in the child credit to $1,600 from $1,000 for each qualifying child
7. 100% bonus depreciation deduction for the cost of qualifying property placed in service after 9/27/2017
8. Used property will now qualify for 100% bonus depreciation.
9. Like kind exchanges will not include personal property.
10. Two year carryback period of net operating losses is eliminated. Carryforward period will be indefinite.
11. Repeal of the domestic production deduction
12. No deduction allowed for client entertainment expenses
13. 25 percent max rate for business income from passthrough entities from a passive business activity subject to further limitations
14. The 25 percent max rate does not apply to most service businesses such as health, law, engineering, architecture, accounting, financial services, consulting, etc.
15. Section 179 expensing limitation goes to $5 million from $500,000.
16. The top individual rate of 39.6% applies to joint tax returns at the $1 million level of taxable income up from $480,050.
17. The lowest tax bracket increases to 12% from 10%.
18. The personal exemption deduction is repealed.
19. All itemized deductions are repealed except for charitable contributions, property taxes up to $10,000, and mortgage interest. Mortgage interest deductions on new loans up to $500,000 would only be allowed.
20. No new home equity mortgage interest is deductible.
21. The standard deduction goes to $24,000 for joint returns and $12,000 for single returns.
22. Alimony is no longer deductible or taxable.
23. Repeal of the tax credit for adoption
24. Repeal of the additional standard deduction for the elderly
25. $300 child credit for any dependent who is not a qualifying child

2018 Inflation Adjustments

The IRS just announced over 50 annual inflation adjustments for 2018 tax provisions. Some of the more significant ones are listed below:

1. The standard deduction goes up $300 to $13,000 for married filing jointly and up $150 to $6,500 for single taxpayers.
2. The personal exemption rises $100 to $4,150.
3. The estate exclusion rises from $5,490,000 in 2017 to $5,600,000 for those who die in 2018.
4. The gift tax annual exclusion increases $1,000 to $15,000. It has been $14,000 for many years.
5. The 2018 foreign earned income exclusion is $104,100 which is up from the 2017 amount of $102,100.

Medical Home Improvements

Some medical home improvements can qualify as a fully deductible medical expense since they don't add to the value of the home. Such items for people with physical handicaps include, entrance and exit ramps, wider doorways and hallways, railings, and support bars. The main purpose of other types of medical capital costs should be to provide medical benefits, and the deduction is limited to the cost over the increase in fair market value of the home. For example, if a doctor recommended a home elevator for someone with a medical condition and the elevator cost $20,000 and an appraisal indicated that the elevator added $2,000 to the value of the home, then the medical deduction would be $18,000. Medical deductions have been allowed for a swimming pool for therapeutic purposes, air purifiers, and house air conditioners prescribed by an allergist. The key to getting medical home improvements is to get documentation from your doctor that the cost is necessary and helpful for your medical condition.

Georgia Disaster Relief

This is a correction to my last post regarding the extension of time to file the 2016 tax return to 1/31/2018 due to hurricane Irma. You will still be subject to the late payment penalty of .5% per month with a max of 25% on any unpaid tax plus interest which is currently 4% annually for Fed tax and 7.25 % for GA. You can avoid the late filing penalty which is the big one of 5% per month on unpaid tax.

Disaster Tax Relief for Georgia

Due to Hurricane Irma Georgia taxpayers now have until 1/31/2018 to file 2016 individual tax returns and make the 9/15/2017 and 01/16/2018 quarterly estimated tax payments. I believe this means that no late filing or late payment penalties will be imposed, but 4% interest from the original due date of 4/18/17 for 2016 federal returns on the unpaid tax will be due. Interest of 7.25% will also be charged on unpaid Georgia income tax.

Disadvantages of S Corporations

Many people set up S corporations to avoid the 15.3% self employment tax incurred by partners and sole proprietors on their net income. The IRS knows this and subjects W-2 wages of Sub S shareholders to greater scrutiny the lower they are so that strategy may not work.  The IRS says that W-2 wages must be reasonable. Another problem with lower Sub S shareholder W-2 wages is that it reduces your social security benefits when you retire since the calculation is based on your highest 35 years of self employment income and W-2 wages. Also distributions to shareholders have to be proportional to their stock ownership which may be difficult with unrelated shareholders.

Some Nondeductible Items

Old Scottish Parable-May all your income be tax exempt and all your expenses deductible.  Below is a list of nondeductible expenses: commuting, club dues, parking tickets, life insurance, political contributions, personal living expenses, funeral expenses, gambling losses, hobby losses, loss from sale of a personal residence, personal credit card interest, divorce legal fees not related to tax matters, and personal licenses and fees like a driver's license.

Penalties for Late Filing of Sub S Corporation and Partnership Tax Returns

The due date for the 2016 tax returns is 9/15/17. If you are late then the penalty is $195 per month per owner for up to 12 months. With only two shareholders or partners the maximum penalty would be $4,680 so it can really add up. The IRS added this stiff penalty several years ago to encourage speedy filing of pass through entity returns since they didn't want them to hold up the processing of regular 1040 tax returns. The penalty is assessed on the Sub S or partnership instead of the individual owner.

When Should You File an Amended Return

Say you inadvertently forgot to include income from a 1099 in your return. Should you wait for a notice from the IRS or should you just go ahead and file an amended return? What should you do about the state return? Know that eventually the IRS will see that the 1099 was not included and send you a notice probably two years down the road. They will also share this info with your state. If you are going to owe more than $5,000 or 10% of the correct tax with the addition of the income from the 1099, then you should file an amended federal and state return since the IRS could charge you an accuracy related penalty of 20% of any underpayment if you wait for them to find the error. Under those amounts you may want to wait for the notice and pay from that, but you will still owe interest (4%) and late payment penalties(.5% on unpaid balance per month up to 25% max).

Things the IRS Will Not Do

The IRS will not call and demand payment or threaten you with court action over the phone. They will also not email you. If you get approached in this way just know that it is a scam and ignore it. They use the US postal service. Now if you get a letter from the IRS please allow me to help you respond.

Nonspouse Beneficiaries of Inherited IRAs

The rules are a little complicated. A beneficiary of an inherited IRA must calculate a required minimum distribution (RMD). The RMD is the longer of the nonspouse beneficiary's life expectancy or the owner's life expectancy if the owner died after their RMD beginning date. If the owner died before their RMD beginning date, then you have the option of using the nonspouse beneficiary life expectancy or electing to distribute the IRA by December 31 of the fifth year following the owner's death. A spousal beneficiary can treat the inherited IRA as his or her own so they can wait until they turn age 70 1/2 to start the RMD.

Investment Expenses

Brokerage commissions for the direct buying and selling of securities add to the basis of the stock and either reduce the capital gain or increase the capital loss when the security is sold. Trips to look after investment property like rental property are tax deductible. Trips to shareholder meetings are not deductible as well as trips for investment seminars. Trips to meet with your broker and lunches with your broker are tax deductible.

Georgia Transfers to Minors Act (GTMA)

The age of majority in Georgia is 18 for entering into contracts or consenting to medical treatment. However if you set up a custodial account for a minor for something like cash or securities, the gift doesn't become available to the minor until the age of 21. At that time they have free use of the account. Once a transfer is made into a custodial account, the gift cannot be taken back.

Microsoft may be Spying on You

To check if this happening to you, go to Windows 10 settings and select privacy and then select Speech, Inking, & Typing. If it says "Stop getting to know me," the software is recording your every keystroke and word spoken when you are at your computer. Click this option to disable the recording. The option should then say "Get to know me" and all the recorded data files will be cleared.

Home Office

If you are a partner or a sole proprietor, you can use the simplified method of taking up to 300 square feet of office space at $5 a square foot for a business deduction of $1,500 a year. The home office has to be used regularly and exclusively for business activities. Using the simplified method still allows you to deduct your mortgage interest and real estate taxes on your home if you itemize on schedule A. If you are an employee of a corporation, then there is a different road to go. The employer should reimburse the employee for a % of the indirect costs of the principal residence used for the business. For example if 15% of the home is used for the business, then 15% of the home utilities, repairs/maintenance, security, and insurance should be paid to the employee as a nontaxable working condition fringe at least once a year. The employer could deduct the business expense and the employee would not have to report the income. Note that depreciation cannot be part of the employee reimbursement. The IRS says that lawn care and landscaping are not qualified home office expenses but some court cases have held otherwise.

Estate Planning

The current amount an individual can leave to heirs without any estate or gift tax is $5,490,000. This amount is indexed for inflation and can change every year. As a couple you can leave twice as much if you file an estate tax return for the first spouse to die and elect to make any unused exemption portable to the surviving spouse. Also, the executor may want to file an estate return even for a gross estate under the exemption amount if the assets include appreciating real estate.

Georgia Refunds on 2016 Tax Returns

To check on the status of your GA refunds go to the Georgia Dept of Revenue web site and look for Where's my refund. You need to key in the primary social security # and the amount of the refund. The site will tell you if your return is being processed. It is now taking up to 90 business days from filing to get Georgia refunds.

RECEIPTS FOR BUSINESS EXPENSES

One of my clients just went through an audit of their unincorporated business expenses (schedule C). The IRS threw out all of the expenses since my client didn't keep receipts. We had check copies but that was not enough. To avoid this same dismal result, make sure you keep all receipts for business expenses for at least the last three years which are open under the statute of limitations. It is a good idea to staple the check voucher to the invoice or receipt and keep in a folder by year. If you don't use check vouchers write the date and number of the check on the paid invoice. Also when I do your tax return, I just want the summarized amounts for the year and not the receipts.

Estate Tax Exclusion Portability Between Spouses

A surviving spouse gets to add the unused amount of the estate and gift tax exclusion of the first spouse to die to their estate tax exclusion. The current amount of the estate tax exclusion is $5,490,000. The only kicker is that an estate tax return has to be filed for the spouse that died to add the unused amount of the exclusion to the surviving spouse. For example Tom dies in 2017 with a gross estate of $3 million which includes appreciating real estate. The executor files an estate tax return even though no estate tax is due to allow Tom's wife Emily to add the unused exclusion amount of $2,490,000 making her exclusion $7,980,000. This may protect Emily's estate from paying any estate taxes when she dies because of the appreciating real estate.

QCD

A QCD stands for a qualified charitable distribution out of an IRA plan for an owner that is at least 70 1/2. You are allowed to contribute up to $100,000 and it counts towards your required minimum distribution. To the extent of the QCD you have neither taxable income or a deductible charitable donation. To be qualified you have to give the donation to a qualified charitable organization organized in the U.S. A donor advised fund may not qualify for the QCD.

The Deduction for Real Estate taxes

In general real estate taxes can only be deducted by the owner of the property. Penalties and interest on late payments are not deductible. Taxes paid in escrow are not deductible until actually paid to the taxing authority. When you sell real estate the property tax is prorated for the time you owned the property on the closing statement and that is the portion you can deduct.

The Hidden Tax on Social Security Benefits

Until 1984, social security benefits were exempt from federal income tax. In my opinion this is the way it should have remained since the payment of social security tax was not ever deductible. However in 1984 and again in 1993 the democrats changed the rules to make a portion of the benefits up to 85% taxable.  In general if your income plus 1/2 of your social security benefits is less than $25,000 if you are single or $32,000 if your file jointly then there will be no taxable social security benefits. Between $25,000 and $34,000 if single and between $32,000 and $44,000 if joint, then up to 50% of the social security benefits are taxable. Over the $34,000 and $44,000 amounts then up to 85% is taxable. This effect causes marginal tax rates to go haywire when additional income pushes you above these thresholds. It is even worse if you file married filing separately because 85% of the social security benefits are taxable, and you skip the lower income thresholds.

Why You Shouldn't Wait To File Your Tax Return

The main reason you shouldn't wait is that after the original due date has passed, it becomes a guessing game on how much tax you owe. The game comes with a penalty if you haven't paid in all the tax you owe by April 15 of .5% of the unpaid amount per month up to 25%. There is also interest of 4% on an annual basis. These are only the federal penalties and interest. Georgia interest on unpaid tax is 7% on an annual basis. If you have been paying quarterly estimated taxes, then you should continue for 2017 without the benefit of knowing the safe estimate based on 2016 tax. The bad guys can have more time to get a fake refund using your social security number if you haven't filed your return. Finally don't you just feel better getting it done?

Failure to Take the Required Minimum Distribution (RMD) from Retirement Accounts

The penalty is 50% of the amount that should have been distributed. You should always try to get relief from this RMD penalty by filling out form 5329 with a reasonable cause for the failure such as illness, old age, memory problems or no reminder from the trustee. Also indicate that you have taken steps to remedy the situation by taking the distribution in question or setting up automatic withdrawals. This is one area where the IRS is usually pretty lenient.

Qualified Dividends

Qualified dividends are a subset of ordinary dividends that are reported to you on 1099s that are subject to the same preferential tax rate as long term capital gains. The tax rate on qualified dividends goes from 0% to 23.8 % while ordinary income rates go from 10% to 43.4%. The top 3.8% under both types of income is the Obamacare tax on net investment income.  Most taxpayers pay at the 15% rate on qualified dividends. What makes a dividend qualified? There is a 61 day holding period. The dividend is paid by domestic corporations or certain qualified foreign corporations. Dividends from credit unions, mutual insurance companies, farmer's coops, exempt organizations, and certain employee stock ownership plans are not qualified dividends. Qualified dividends are treated the same under the alternative minimum tax as they are under regular taxes.

Hierarchy of Taxpayer Sins to the IRS

The IRS wants taxpayers to do the right thing on their tax returns and has an arsenal of penalties to enforce correct behavior. I thought it would be useful to list what I thought the IRS cares most about by a hierarchy of sins based on the level of penalties imposed starting with number 5 and going to the biggest sin.

5. Making a mistake. In this case usually no penalty is imposed at all.
4. Paying your taxes late is a .5% penalty per month on the unpaid balance.
3. Overstating expenses will get you a 20% underpayment penalty (accuracy related penalty).
2. If you don't report income reported to you on a 1099 or W-2, you are subject to a 30% penalty on the understatement amount. The IRS calls this a reportable transaction.
1. The biggest sin of all is not filing a tax return. The late filing penalty is 5% of the unpaid balance for each month the return is late up to 25%. The willful failure to pay tax or file a return is subject to a maximum fine of $25,000.

Obamacare Penalty

There is a box on the tax return asking if you had qualified health insurance coverage during 2016. If you indicate that you didn't have coverage every month you will be subject to significant penalties up to as much as 2.5% of your adjusted gross income less an amount based on your filing status. President Trump signed an executive order on his first day directing federal agencies to exercise all authority and discretion to reduce the burdens of the Affordable Care Act (ACA). Now because of the executive order the IRS is allowing tax returns to be processed without a response to the health care coverage question. If you don't want to answer the question you now have that option. You may receive follow up questions from the IRS as taxpayers are still required to follow the ACA law.

Donating Time Shares

This does not work as a charitable donation if you just donate a week of your time share to a charity auction. To make it work you have to give up your entire ownership interest in the time share. The rental value of the right to use property is not a gift of a complete interest in the property which is the problem.

Personal Energy Property Tax Credit

If you make certain improvements like energy saving insulation, windows, doors and roof to your principal residence then you can take a tax credit for up to $500 on your tax return. The credit is based on 10% of such eligible costs. The $500 is a lifetime cap on the credit which has been available since the 2006 tax year. This credit expires after 2016.

Business Travel Meals

The IRS only allows a 50% deduction for meals associated with business travel. This includes food, beverage, tax, and tip. However if you get reimbursed for the meals by a client or your employer through an invoice where you specifically bill for the meals or an expense report where you  account for the meals, then the meals are not subject to the 50% deduction. The 50% limit will only apply to the final payer of the expenses. If your expenses were reimbursed then they cannot also be deducted.

Head of Household Filing Status

The head of household filing status puts you in a lower tax bracket than filing single so it is a desirable way to file your tax return. What qualifies you for this status? There are 4 conditions: 1. unmarried at year end, 2. U.S. citizen or resident, 3. you paid more than one half of the cost of the home, and 4. your child or dependent lived in your home for more than one half of the year. In a divorce situation, the custodial parent can still file as head of household even if they have given up the right to claim the exemption for the dependent to the noncustodial parent.

Travel Costs

If you have rental property in another state and you take a trip to check up on it, is the trip tax deductible? Yes it is. The cost of travel for the management or conservation of investments is deductible per the IRS. If you drive to your broker's office to go over your portfolio, that trip is also deductible. Make sure you keep up with the mileage. However going to a shareholder's meeting (except for a proxy fight) or an investment seminar is not deductible.

Using Credit Cards for Tax Deductions

If you use your credit card to buy something for your business or to make a charitable contribution, when can you deduct the cost on your tax return? Say you buy a business computer on December 15, 2016 with your american express card but don't pay the amex bill until January. You can deduct the cost of the computer on your 2016 tax return. It is the date charged that governs not the date paid when you use a credit card.

Form 1099 Penalties

Businesses are required to send 1099 forms to independent contractors who perform services for them where the payments are at least $600 during a calendar year. Payments to corporations are generally exempt from 1099 reporting except for payments to attorneys. There are also questions now on business tax returns asking if all required 1099 forms will be filed. The IRS encourages businesses to file 1099 forms by big penalties of $250 per failure and double that for intentional disregard. Filing the 1099 forms late within 30 days will just get you a reduced penalty of $50 per failure. The due date for 2016 1099 forms to be sent to the IRS is 1/31/2017 which is a month earlier than 2015 1099 forms. Before you do business with an independent contractor, you should have them fill out a form W-9 to get their federal ID #.

2017 Tax Changes

A few of the more significant changes are listed below:

1. The government filing dates of  W-2's and 1099's have been moved up a month to January 31.
2. Partnership returns are now due a month earlier on March 15.
3. Tax refunds for those claiming the earned income tax credit and the child tax credit will be delayed until February 15 as an anti fraud move.
4. The due date for foreign account reporting has been moved up to April 15 from June 30.
5. Estate tax returns must report the fair market value at death of assets passing to beneficiaries to both the IRS and beneficiaries. This is to make sure that beneficiaries use the correct basis when reporting sales of inherited assets.

How Long Should You Keep Tax Records?

My advice is to keep tax returns forever but only keep the underlying supporting records such as 1099's, bank statements, and other documents for the current year and the three prior years because of the three year statute of limitations. In case of suspected fraud the IRS can go back as far as they want however. Keep closing statements for real estate transactions until the property is sold and then follow the above tax return supporting documents rule. Only the most recent monthly, quarterly and annual brokerage statements need to be kept in your files. This policy should help you keep your storage requirements to a minimum but yet support your tax return in case of audit or tax notice.

Tax Organizers for 2016

Soon you will be receiving a tax organizer from me for 2016. It is very helpful to me if you fill out the organizer and provide your 2016 tax information. Prior year amounts are on the organizer to help guide you. The questions bring up special circumstances that may affect your return. I also ask for any documents that are sent to the IRS such as 1099's so that I have a record of what was reported in case of tax notices or audits. If you provide me with the tax documents, you do not need to also list the amounts in the organizer which may save you time. I hope you will see the tax organizer as an efficient means of communication with me.