Q: WHAT DO I NEED TO FILE MY TAXES?
A: You need to bring in all W2s from every place you worked at during the year, statements from any source of income received, information for any dependents you are filing, statements from any mortgages, tuition statements, etc. See the checklist below for a more detailed list of documents.
Q: WHAT IF I AM SELF-EMPLOYED?
A: You will need to bring in records showing income received, receipts for your expenses as well as any of the above information that applies to you. Refer to the sheets below for assistance.
Q: HOW SOON CAN I RECEIVE MY REFUND?
A: Due to the FDIC eliminating RAL loans, all refunds will be available in 7 – 15 days. Taxes Etc. offers paper checks, direct deposit and debit cards for your convenience.
Q: CAN I FILE MY TAXES WITH MY LAST CHECK STUB?
A: No. Per IRS regulations, you may not file your taxes with the last check stub. Often, because of pre-tax benefits and other deductions, the wages on the last check stub can differ from wages reported on the W2.
Q: CAN I BRING ADDITIONAL PEOPLE WITH ME TO MY APPOINTMENT?
A: You cannot bring extra people with you to your appointment. An appointment needs to be made for every person wanting their taxes prepared. People without an appointment will not be serviced. And, please arrive to your appointments on time.
Q: HOW CAN I GET A COPY OF MY TAX RETURN?
A: APA Finacial Services is implementing a new program that will allow you to download a copy of your tax return from the website. Just click on Client Portal, enter your username and password. As this is a work in progress, if your information is not available, just email us at firstname.lastname@example.org and we will get that corrected.
Q: CAN I EVER SAVE TAX BY FILING A SEPARATE RETURN INSTEAD OF JOINTLY WITH MY SPOUSE?
A: You sometimes may benefit from filing separately instead of jointly. Consider filing separately if you meet the following criteria:
One spouse has large medical expenses, miscellaneous itemized deductions, or casualty losses.
The spouses’ incomes are about equal.
Separate filing may benefit such couples because the adjusted gross income “floors” for taking the listed deductions will be computed separately
Q: WHY SHOULD I PARTICIPATE IN MY EMPLOYER’S CAFETERIA PLAN OR FSA?
A: In 2013, medical and dental expenses are deductible to the extent they exceed 10% in 2013 of your Adjusted Gross Income (7.5% in 2012). As such, many people are not able to take advantage of them. There is however a way to get around this if your employer offers a Flexible Spending Account (FSA), Health Savings Account or cafeteria plan. These plans permit you to redirect a portion of your salary to pay these types of expenses with pre-tax dollars.
Q: WHAT’S THE BEST WAY TO GIVE TO CHARITY?
A:If you’re planning to make a charitable gift, it generally makes more sense to give appreciated long-term capital assets to the charity, instead of selling the assets and giving the charity the after-tax proceeds. Donating the assets instead of the cash avoids capital gains tax on the sale, and you can obtain a tax deduction for the full fair market value of the property.
Q: I HAVE A LARGE CAPITAL GAIN THIS YEAR. WHAT SHOULD I DO?
A: If you also have an investment on which you have an accumulated loss, it may be advantageous to sell it prior to year-end. Capital losses are deductible up to the amount of your capital gains plus $3,000. If you are planning on selling an investment on which you have an accumulated gain, it may be best to wait until after the end of the year to defer payment of the taxes for another year (subject to estimated tax requirements).
Q: WHAT OTHER TAX-FAVORED INVESTMENTS SHOULD I CONSIDER?
A: For growth stocks you hold for the long term, you pay no tax on the appreciation until you sell them. No capital gains tax is imposed on appreciation at your death. Interest on state or local bonds (“municipals”) is generally exempt from federal income tax and from tax by the issuing state or locality. For that reason, interest paid on such bonds is somewhat less than that paid on commercial bonds of comparable quality. However, for individuals in higher brackets, the interest from municipals will often be greater than from higher paying commercial bonds after reduction for taxes. For high-income taxpayers, who live in high-income-tax states, investing in Treasury bills, bonds, and notes can pay off in tax savings. The interest on Treasuries is exempt from state and local income tax.
Q: WHAT TAX-DEFERRED INVESTMENTS ARE POSSIBLE IF I’M SELF-EMPLOYED?
A: Consider setting up and contributing as much as possible to a retirement plan. These are allowed even for sideline or moonlighting businesses. Several types of plan are available: the Keogh plan, the SEP, and the SIMPLE.
Q: HOW CAN I MAKE TAX-DEFERRED INVESTMENTS?
A: Through the use of tax-deferred retirement accounts you can invest some of the money you would have otherwise paid in taxes to increase the amount of your retirement fund. Many employers offer plans where you can elect to defer a portion of your salary and contribute it to a tax-deferred retirement account. For most companies these are referred to as 401(k) plans. For many other employers, such as universities, a similar plan called a 403(b) is available.
Some employers match a portion of employee contributions to such plans. If this is available, you should structure your contributions to receive the maximum employer matching contribution.
Q: WHAT CAN I DO TO DEFER INCOME?
A: If you are due a bonus at year-end, you may be able to defer receipt of these funds until January. This can defer the payment of taxes (other than the portion withheld) for another year. If you’re self employed, defer sending invoices or bills to clients or customers until after the new year begins. Here, too, you can defer some of the tax, subject to estimated tax requirements.
You can achieve the same effect of short-term income deferral by accelerating deductions-for example, paying a state estimated tax installment in December instead of at the following January due date.
Q: WHY SHOULD I DEFER INCOME TO A LATER YEAR?
A: Most individuals are in a higher tax bracket in their working years than during retirement. Deferring income until retirement may result in paying taxes on that income at a lower rate. Deferral can also work in the short term if you expect to be in a lower bracket in the following year or if you can take advantage of lower long-term capital gains rates by holding an asset a little longer.