2018 Tax Update and Itemizer

2018 Tax Update and Itemizer

My staff and I hope you had an enjoyable Holiday Season and a Happy New Year as we look forward to working with you again during this upcoming tax season.

This year you received a postcard that directed you to the tax section of our website to get the latest procedures, updates and tax itemizers for this tax year. We want to get you used to visiting our website as we plan on offering much more information during the year regarding your taxes due to the sweeping new tax law changes taking effect in 2018! The changes WILL affect YOU! If you do not plan accordingly it could easily cost you hundreds, evens thousands of dollars each year going forward. We encourage you to make a separate tax planning appointment as soon as you are able to do so. This tax planning is a separate fee and will be billed based on complexity of your situation. If you have a business, rental properties, REIT dividends, trusts, Partnerships, S Corporations or are receiving a K1 from a Publicly Traded Partnership you can maximize your benefit from the taxes changes by setting an appointment with us as early as possible to plan out the rest of this year.

The IRS has mandated some very stringent and essential changes for taxpayers going forward. The IRS has shifted much of their compliance burden to “me” as a tax preparer to assist the agency due to cutbacks with services and communication to ‘you’ the taxpayer, forcing us to assure you comply with these regulations. You as a taxpayer need to supply us with your personal tax information and verify with documentation, questionnaires or statements, all income and expenses to be declared for this tax season in order for your taxes to be accepted by the IRS.

FILING REQUIREMENTS

  1. The state of Ohio requires us to obtain your Driver’s License info and any household member of driving age for use in preparing and filing your Ohio tax return as it is now part of the taxpayer verification process.
  2. Form 8867 normally used for EIC or Earned Income Credit purposes has now been expanded to include Child Tax Credit ($1000) for resident children under 17 living at your address and the American Opportunity Tax Credit for education tuition (up to $2500). To be assured you receive proper credit one of the following documents must be provided to us:
  3. Residency of child needs verified - Living at address
    1. School records
    2. Health Care statement
    3. Medical records
    4. Child Care provider records
  4. Disability verification
    1. Physician statement
    2. Health Care provider statement
    3. Social Security or program statement
  5. Self-Employment verification
    1. Business license
    2. 1099s filed
    3. Income and Expense records
    4. Bank statements
  6. Refunds can normally take up to 21 days to receive as a direct deposit that is filed electronically. No refunds are issued prior to February 15th and physical checks take longer to receive. Missing data will result in delayed processing of tax returns and therefore, delayed receipt of refunds.
  7. 1099s for Brokerage accounts have until February 15 to be filed, corrected 1099s should be filed by February 28

Affordable Health Care Information

The ACA mandates that certain taxpayers, including their spouse and all dependents (if applicable), must have adequate health insurance coverage to avoid an “additional tax.” Taxpayers on Medicare, or having health insurance through their employers, or retirees receiving health insurance through their retirement systems, or those who purchase health insurance on their own are generally deemed to have met the Act’s mandate. We will need the following forms to complete your tax return for 2017 as it contains information vital to your situation and fulfills our compliance obligations to the IRS as your tax preparer.

  1. Form 1095-A from the health care marketplace.
  2. Form 1095-B from your health insurance company.
  3. Form 1095-C from your employer
  4. Copies of tax returns filed for all dependents (if applicable) claimed on your tax return. This information is needed to calculate the “Household Income” to figure if the “additional tax” applies to you: Note: if your child files his/her own return manually or on a software tax package (e.g., Turbo Tax), make sure a copy is retained and given to us.

Again, if you have college age children that work, and we do not prepare their returns, we will need a copy of each return as we need to coordinate their returns with yours in order to minimize taxes and to comply with the ACA regarding household income.

By dropping off, mailing or emailing your 2017 tax information to us it is inferred that you are engaging us to prepare your Federal, State and Local returns for 2017. You also agree to the following conditions:

  1. We will prepare your 2017 federal, state and local income tax returns. We will depend on you to provide the information we need to prepare complete and accurate returns. We may ask you to clarify some items but will not audit or otherwise verify the data you submit. An Organizer is attached - (scroll to bottom) to aid in your collection of the data required for your return. The Organizer will help you avoid overlooking important information. By using it, you will contribute to efficient preparation of your returns and help minimize the cost of our services.
  2. Our fee will be based on the time required at standard billing rates plus out-of-pocket expenses. Fees are due and payable upon completion. We will return your original records to you at the end of this engagement.
  3. Our engagement is limited to preparing your 2017 tax returns and will conclude with the delivery of the completed returns to you, your signature on the 8879 and our subsequent submittal of your tax return by e-filing. Remember, NO returns will be e-filed until we have a signed 8879 and payment has been received or arranged. (If you need to paper file, our engagement concludes upon the delivery of your paper returns to you).
  4. Any correspondence from the IRS pertaining to the 2017 taxes that you bring into us for a response on your behalf, clarification or resolution will be deemed a separate engagement requiring a retainer and will be billed at our normal billing rate for such services. Anything that is due to our error will be handled without cost to full resolution and we will pay any penalties and interest on cases deemed reasonable and customary.

The IRS lack of personnel resources over the past 5 several years has increasingly added a huge drain on our time. With that being said, in order to minimize costs for you we are offering an Audit Protection and Correspondence fee for $90 that will follow the 2017 tax return for any tax matters for 3 years. Consequently, this fee will include any IRS correspondence, ACA tax matters as well as being extended to state and local tax issues. If you do not opt for the Audit Protection normal billing rates of $250 per hour with a $500 retainer will apply as this will be deemed a separate engagement for us to assist you in responding to such an inquiry from any of the tax agencies. As always, if we erred in some manner we will bear that time and cost along with reasonable interest and penalties if so levied.

I encourage you to bring in your tax information as soon as you have it ready. As usual, if returns are received after March 31 we cannot guarantee filing by April 17, they may go on extension. If they do, we will get them completed as soon as possible. Please complete the itemizer as much as possible, especially if anything has changed for you during the past year.

Remember, we have a drop box at the front door for after-hours drop offs. Office hours for the tax season will be as follows:  Monday – Friday 9am-5pm, Saturday 9am-12pm or by appointment, closed Sunday. If you need to meet outside of those hours, please contact the office for an appointment.

John A. Cindia, CPA/PFS

Download 2017 Tax Itemizer

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