As I’m sure you’ve heard me say before, it’s a good idea to check the accuracy of those tax statements you receive in the mail.
Well, on Friday the 20th (Friday afternoon being the perfect time for dumping this junk into the media), those of us who were paying attention found out that almost 1 million taxpayers who purchased Obamacare health insurance (the Affordable Care Act) don’t have to bother — their forms are wrong anyway! http://1.usa.gov/1Dets8r
Details are on that link above, but about 800,000 households will be contacted by HealthCare.Gov to let them know their information is wrong. And then another 100,000 or so in California were sent the wrong info as well (which was announced the previous week): http://cbsloc.al/1DeuiSv
Which means, of course, they’d like you to hold off on filing your federal return until all the info is correct. We should be able to access it by the end of the month.
This does NOT mean you can’t have us prepare your taxes. We will simply get all the rest of your information handled and prepared … and just as soon as we are able to input the correct information from Form 1095-A, we’ll fire it off to the ol’ Treasury Department.
We do, of course, want to make sure that you receive every deduction to which you are entitled! So, in the interest of jogging your memory from the year … here are some “interesting” 2014 tax deductions that you may or may not be aware of…
Let us know if we can help you with any of these: (718) 858-9864 or http://www.accountantbrooklyn.net//contact
Pantzis’ Top 11 Overlooked Tax Deductions for 2014
“The important work of moving the world forward does not wait to be done by perfect men.” – George Eliot
Have you thought about these …?
1) Pet Food and Veterinary Bills: You can deduct veterinary bills and pet food, only if they are for your foster pet. As an example, Jan Van Dusen, a California family lawyer, devoted most of her time outside of work caring for feral cats, 70 to 80 at one time. A tax court found that she was entitled to much of her claimed $12,068 in cat care expenses as a charitable deduction on her income taxes. In another case, Seawright v. Commissioner (http://1.usa.gov/1DexKfV), a couple ran a junkyard. They put out food to attract wild cats to control snakes and rats, making the junkyard safer for customers. When they claimed the cat food as a business expense, the IRS said no way. However, the tax court disagreed.
2) Moving Fido: If you are changing jobs and meet a couple of tests, you can deduct your moving expenses–including the cost of moving your dog, cat, or other pet from your old residence to your new home.
3) Swimming Pools: If swimming pools are used for medical purposes, as prescribed by a doctor, they can be tax-deductible. In Cherry v. Commissioner (http://bit.ly/1Deyf9T), the taxpayer had emphysema and installed a swimming pool after his doctor ordered an exercise regimen. The primary purpose of the pool was medical care, so he was able to deduct the pool, part of the cost of heating the pool, pool chemicals and part of insuring the pool area.
4) Fitness: Fitness is tax-deductible, if your doctor signs off on it, and tells you that your life might be in danger if you don’t start exercising and lose weight. The cost for remedies that help you drop a few pounds, improve your heart rate, or reduce your cholesterol might all be deductible.
5) Significant others: Couples who can claim their significant other as a dependent can also use them as a tax break. In order to do so, couples must have lived together for an entire tax year and the significant other must have an annual salary of less than $3,900. Also, the individual claiming the tax break must show they have paid for more than half of their significant other’s expenses. A total of $3,900 can be claimed if all the qualifications are met.
6) Deadbeat Friends: Did you lend a friend cash in a pinch, never to see the money again? Don’t despair–all is not lost. You can write off the unpaid amount if there’s no hope to collect payment.
7) Organ Donation: Organ donors can deduct not only any medical costs associated with the donation, but also costs of transportation.
8) Hunting: As long as business discussions are conducted and you are attempting to do business on the hunting trip, it would be possible to deduct this type of expense. However, these types of deductions may be heavily scrutinized.
9) Bariatric Surgery: The IRS ruled that obesity is a medical disease, which means that specific treatments aimed at curbing obesity are allowable deductions, including bariatric surgery. As with all medical expenses, you can only deduct unreimbursed expenses that exceed 10% (7.5% if over 65) of your adjusted gross income (AGI).
10) Addiction Treatment: Drinking, smoking, and drug abuse are serious medical hazards, so the IRS has ruled that you can write off expenses related to quitting. Eligible deductions can include the cost of any products or programs designed to help you quit, including nicotine patches or other aids. In-patient treatment at a drug or alcohol facility including meals, lodging and some transportation expenses can also be deducted as medical expenses. Additionally, transportation to and from meetings like Alcoholics Anonymous or Narcotics Anonymous, if attended based on doctor’s orders, can also be written off.
11) Bingo: Bingo-playing taxpayers can deduct the amount lost in a given year, up to the amount that was won. The IRS allows taxpayers to deduct losses for other types of wagering, too. To do so, they must keep a detailed diary of the kind of wager, where they placed it, who they were with, and how much they won or lost.
These are just a start to the sort of things that we can help you find in your tax year. Oh — your friends’ current software or tax professional didn’t help them find these? Hmm … maybe it’s time you helped them find someone who could?
I hope this helps.
James Pantzis, CPA, PC
Before I get to the love stuff, we’re continuing to (loosely) track the saga of fraud detected from within the user base of TurboTax. Again, charity (and/or my lawyer) requires that I emphasize that the makers of the tax software seem to have done everything they possibly could to ameliorate the problem and respond well.
But now it seems that federal returns (not just state taxes) may also be threatened: http://onforb.es/1L572Kw
Possible fraud is just one reason to be cautious when submitting your tax and financial information to the government through a consumer software.
Also on the list: in-person help, years of expertise, a support option that doesn’t include phone-tree Siberia (a better option: (718) 858-9864), and more.
But again, I don’t want to pile on too heavily. We’d love to serve you this year — and take all of the annoying paper/software work off your hands. It’s what we do best!
And speaking of not piling on … how’d you do on Valentine’s Day? Perhaps it didn’t really apply to you this year, or perhaps marriage isn’t on your immediate radar.
But for many of my clients, the real work of love is forged through the stuff of everyday life. Not just on one particular day. And, of course, money is a big part of that.
I’ve noticed that *finances* can be a major sticking point in a good marriage.
But there are some simple steps you can take (five, by my count), which will ensure that you don’t ever fall into the trap of letting a good marriage be spoiled by money miscommunication.
Read on, and send your feedback. And, of course, if you need help with any of this, or if you have any pressing tax issues or questions, email me (you can use the mail button in the upper right of this page), or call us at (718) 858-9864 . We *love* serving YOU!
James Pantzis’ 5 Keys to Great Financial Communication in a Marriage
“Lots of people want to ride with you in the limo, but what you want is someone who will take the bus when the limo breaks down.” – Oprah Winfrey
Money problems can ruin the love affair with your spouse. The work of blending two lives in harmony requires certain basic commitments. It’s a fact that many families today are financially troubled.
Most of these are in denial. The rest of them are looking for a quick fix. Even a financial planner can’t help unless the couple is willing to make five simple commitments. You can always choose to find something to fight about. But if you are serious about removing the financial obstacles in your love life, you should commit to the following money management rules.
1) First, take the time to provide open accounting to your spouse. Most financial arguments are not about how to spend your money–but about how the money was actually spent. Just like every publicly traded company is required to give a public accounting of its finances, couples should do the same. In the public sector, it’s considered a scandal when a corporation fails to provide its financial information in a timely fashion. The same rules should apply at home. Financial accountability, openness, and honesty are essential in marriage.
2) Next, make a saving investment in yourselves your first priority. Pay yourself first. Couples should agree on a savings and an investment rate and should prioritize their savings above all other budget categories. Savings should be automated and protected from impulse spending habits.
I’ve come to believe that, in certain cases, savings might even need to be prioritized above debt reduction. I’ve found that some couples that are in debt cannot seem to get out of debt because they are using what should be going into savings to service their debt — rather than adjusting their lifestyle so that they are spending less than they make. This can sometimes make that debt spiral worse … but again, should be considered in light of the bigger picture. Get your spending under control! Which leads to …
3) Set a limit on what you can spend without first getting the approval of your spouse. Each spouse must sign off on spending that might be a budget buster. If you are young or your finances are in trouble, the amount should be fairly low. As you get more experience and your finances are in harmony, you can raise the amount. Any purchases above that amount should require the agreement of both spouses.
In the same way, any purchases beyond what was budgeted should require the agreement of both spouses as to which budget category is going to be reduced in order to make up the difference. If your spouse asks you to wait before making the purchase, lean toward waiting graciously. Ask what you would do if you did not have the money at all. Then, do that instead. Delaying a large purchase even by a month can significantly increase your financial health.
4) Set rules for the acceptable use of credit. In my experience, the easy use of credit cards ruins much financial harmony. It is better when the use of credit cards is limited to only certain required budget items. Using a credit card for groceries or gasoline may be harmless. But when credit cards are used for clothes or eating out, optional spending is unnecessarily inflated.
There are several advantages to using credit cards. But each of these advantages become powerful disadvantages for a family struggling to make ends meet. Credit allows couples to avoid asking the tough question about what they would do if they did not have the money. Credit makes spending easy and simplifies check-writing. These advantages are about as helpful as giving an alcoholic a place to sleep in the back of the bar.
Either spouse should be able to veto the use of credit cards entirely. Only if both parties agree to the use of credit cards, should they be allowed – and then only within certain guidelines.
Credit should only be used for specific required monthly categories, and then only by the spouse who is less apt to make extra purchases on impulse. If you are struggling with your finances, stop using credit cards entirely.
5) Lastly, agree together that ignorance is no excuse! Both parties must be willing to learn. Just like a good love life, finances cannot be handled well by just one party. Many problems stem as much from ignorance and abdication by one party than spending by the other. If you don’t have the time or the interest to be involved in the family’s finances, then you may be the problem. Ask for help and start learning.
Look, I’m not a marriage counselor. But I DO know good communication when I see it.
I hope this helps.
James Pantzis, CPA, PC
The tax world was roiling late last week over some fraud detected from within TurboTax.
Here is the story: http://onforb.es/1DNkQot
Essentially, the makers of the software detected a level of fraud occurring in state tax return submissions that made them decide to completely shut down submission of those returns for a period of time. Eventually, they determined that the apparent source of the fraud was outside of their system, and have resumed filing state tax returns. It does seem that TurboTax did everything by the book, and should be (relatively) safe to use.
What is the takeaway for taxpayers? Perhaps trusting your most sensitive (and financially-important) interaction with the state and federal government to a software, rather than a real person (who will sign their name on your return and shoulder the burden with you) should give you … pause.
Again, TurboTax seems to have handled this fairly well, all things considered. But when there’s a problem or question — would you rather sit on hold with the IRS, deal with online chat help, navigate through instructional videos, etc. etc. — or deal with a human who knows you?
Now … all that said, we’re pretty darn good at navigating the labyrinth of our tax system around here. But we may not be the most authoritative source on All Things Valentine.
That doesn’t prevent me from chiming in on it this week though, with a little penny-pinching twist, if you will. That, after all, is what we tax pros are GREAT at (finding ways to save!).
And just because it’s tax season doesn’t mean I won’t offer dating advice.
A Tax Pro’s Valentine
“Whatever you are, be a good one.” – Abraham Lincoln
Look — whatever your particular financial situation, wouldn’t it be great to create romance “magic” without spending an arm and two legs? So, instead of the tired old “flowers, candy and chocolate” [boring!], here are a few of my favorite modest (and occasionally tongue-in-cheek) suggestions for a sizzling Valentine’s … one that won’t torch your wallet!
Make a Video: You can use the video setting on your phone or digital camera, and create a heartfelt message of love for your sweetie. Then, post it to YouTube, Vimeo or another online video-sharing site and send it on! Um, just be sure to make that video setting to “private” unless you want to share with the world your undying love for your honey (hopefully with clothes on!).
Learn a Romantic Song and Sing it to Your Sweetheart: Well, I’m no singer, so I can’t say I’ve tried this … but I hear it works well. Even better, if you can’t sing, your valentine will give you kudos for the effort! You could step it up by writing an original song and then sing it. Or, for the slightly-less courageous, you could pull a page out of John Cusack’s book in Say Anything and hold a boombox (or iPod) above your head and blare Peter Gabriel’s “In Your Eyes”. That seemed to work.
Not a singer? More of a writer? Or artist? For the otherwise artistically inclined:
– You could pen a poem on nice paper
– or even paint it
– You can paint a picture of your honey. Just be sure it looks good.
The “Mix Tape” (or Playlist): This is an old standby of high school kids everywhere. Except these days, the “tape” part is a bit less convenient. Instead, make a CD or mp3 playlist of Sweet Love Songs and make a cover list / liner notes on the memories of you and your honey from the songs. And you can make a Personalized Photo Album using Shutterfly or a service like it.
Romantic Picnic: Surprise your love with a ‘picnic’ in the park, at the beach, or any other outdoor nature spot. If the weather isn’t ideal for outdoors, you could bring the outdoors inside — find a fake palm tree, flowers, sand, beach umbrella, radio, towels (borrow them). Nothing says “I love you” like fake palm trees!
Write a Message To Be “Stumbled Upon”: Well, perhaps not *literally* stumbled upon (nor am I referring to the website), but try a nice outdoor surprise. With snow outside, you could stomp out the message and fill in the letters with spray paint or flower petals or rocks. Without snow, you can use sidewalk chalk to write a message to your sweetie.
Now — who said tax professionals weren’t good for anything other than your finances? Oh … hmm. That would be Abraham Lincoln (see my opening quote below the title).
Perhaps we should keep our advice restricted to things financial. Ah well.
Happy Valentine’s Day, regardless!
And please feel free to call [(718) 858-9864] or email me and my staff with any questions: http://www.accountantbrooklyn.net//contact (just no dating questions, please!).
To a loving — and financially sound — February …
James Pantzis, CPA, PC
We’re knee-deep in tax forms and legal documentation this week (with a nice little dash of healthcare forms thrown in, new for this year). Our families miss us (though apparently, according to the commercial last night, all will be forgiven if I purchase my child a Nissan Maxima), and we’re still in the first quarter of OUR yearly Super Bowl. Fortunately, before we left for the office this morning, we made sure to bubble wrap our children so that they wouldn’t perish before tax season’s completion (thank you, Nationwide Insurance).
And speaking of children … well, my riff on those Super Bowl commercials leads me to what I’m writing about today.
When we sit down with a client during tax season, we are picking through history — we are helping you to sort through your 2014, and to make sure that the numbers match … AND, of course, that YOU are able to take advantage of every possible legal and ethical method to hold on to your hard-earned dollars (or sometimes receive a nice bump in your supply from a refundable tax credit).
But we also like to spend time future-casting with our clients, if they let us.
In conversations about the future, we can make the most careful plans when it comes to the disposition of our financial assets, but can we also think … bigger?
James Pantzis Suggests You Don’t Just Pass Along Money …
“In three words I can sum up everything I’ve learned about life: it goes on.” – Robert Frost
Too many tax and accounting firms focus only on the financials, and neglect to help families identify, articulate and pass along their dreams, passions and hopes for their children and loved ones.
Yes, some families take the bull by the horns, and do this themselves, but it makes really good sense to get outside help in making absolutely sure that every base has been touched.
Because really — what are you after with all of that money we help you save on your taxes?
It’s worth putting some thought into it.
Specifically, your children and your loved ones should be able to have resources and tangible memories which help them answer these kinds of questions:
* What dreams did they have for me?
* How have they seen the world change around them, and how do they feel about it?
* What kind of family were they hoping to create?
* Were there any mistakes made which they’d like to see me avoid?
* What activities were they most glad to have participated in?
* How did they make decisions about what to do as a family?
There are of course more questions like this that you could cover … but the main point I want to make with you is this:
You just never know when these questions will be asked.
And, I hope you put in place the right tools to make sure they’ve got the answers when they need them most. Whether that is after your “work is done” on this little planet — or, even better, while you still have the time to affect it all.
We are in your corner, and want to think bigger with you. Let us be your advisors in matters like these.
To your family’s financial and emotional peace…
James Pantzis, CPA, PC
For us here at James Pantzis, CPA, PC … well, things are heating up. Tax documents are trickling out (organizations have until Monday, Feb. 2 to send everything your way), electronic filing of returns became possible last week (we’ve already filed more than a few!) … and our phone has begun to ring with regularity [(718) 858-9864 in case you need it].
So friends, make sure you call us soon to set up a time where we can go through your situation with you. After all, would you rather spend 18 hours going it alone — or have your trusted advisor do it all for you?
But a quick tax item, regardless of how you prepare:
Here’s the list of forms you should be looking for in the mail, and online (from any employer, vendor, client or anyone else with whom you had a taxable transaction last year):
* Wage earners, watch for your W-2 forms, one from each employer.
* “Other income” (like a state tax refund, or government benefits) is shown to you on Form 1099-G
* Prize winnings — Form W-2G
* Most canceled debt (but not all) is reported as taxable. In which case, you’ll get Form 1099-C
* 1095 Forms if you purchased your health insurance through a Marketplace or exchange
… as I’m writing this, I realize the list is extremely long. Here’s a good place for the whole list: http://1.usa.gov/1zPwS2o [this is a list of all forms due out from organizations, and it’s worth looking over to see what you should be expecting, if the conditions apply.]
Now, for my primary message, on unintended consequences …
James Pantzis Discusses When Our Tax Policy Affects Families
“If a man has any greatness in him, it comes to light, not in one flamboyant hour, but in the ledger of his daily work.”
– Beryl Markham
Every year, I sit down with Brooklyn families who made a particular financial move, and as a result, some unforeseen — and unintended — consequence kicked in. This could be an unexpected tax event, it may have been a broken relationship, or a business failure. (All of which and more, by the way, is why you should be sure to ask us about tax PLANNING this year, rather than simply tax “reporting” — which is what the tax return preparation process really is.)
But sometimes these consequences are because of the tax code itself.
Take marriage, for example.
The foundations of most civilizations function on the principle that children are best raised in a home by two parents in a committed relationship. As such, couples have always been encouraged to marry.
(My point in this article, by the way, is about what’s in the tax code, and how it encourages social change. So this is NOT at all to speak of anything related to the special heroism which is single parenthood.)
But for many couples, our current tax code actually discourages marriage, and I think it’s a shame.
Here’s how it does so…
An individual who is working but makes a smaller income qualifies for the “Earned Income Tax Credit” (EITC). It’s refundable, which means that whether you owe that amount in tax or not, you may still receive it as a refund.
The amount is calculated based on your salary, filing status and number of children. There is a plateau at which point the amount of the credit goes down.
Without going into all the math, let me show you an example:
If you and your partner are not married but have two children, you have some flexibility. Each of you can earn $17,100 and still collect the maximum $3,305 for a total of $6,610.
A married couple, on the other hand, with two children earning the same $34,200 would only collect $3,156. The formula “penalizes” them $3,454, or 10.1% of their salaries, simply because they are legally married.
And the marriage penalty only increases as income and the number of children rise. The”penalty” can be as high as $8,400 when compared against unmarried couples in certain salary levels.
This should be sobering to us as a society. I have no problem whatsoever with each individual making their own choices in these matters. And the EITC receives support from all parties because it’s an incentive to work (it only is received when there is a job in place). But we shouldn’t disincentivize a civilizational building block through our tax code. (And I also hope that a few thousand dollars doesn’t keep people from embracing the richness available to them in marriage!)
One solution could be to extend it to all individuals equally, regardless of marital status. And, to be fair, there are instances where there is a marriage “bonus” (usually in the case when one spouse has a much higher income than the other).
But the main point I want to get across is this: our choices have consequences, many of which aren’t immediately apparent — both in the tax arena, and otherwise. So be wise, and have a caring and competent guide as you make tax and financial decisions moving forward.
It helps to have someone who’s seen the road ahead.
To your family’s financial and emotional peace…
James Pantzis, CPA, PC
Now is around the time when things begin to really crank for us around here. It’s the week which the IRS is opening up actual e-filing (as of Tuesday, the 20th), and many people have received all of their paperwork necessary for completing their returns.
But there’s also a temptation that I hope you’ll resist. Sadly, my writing this could easily be seen as self-serving, but that doesn’t keep it from being true. Here’s what I’m referring to:
Trying to prepare your taxes correctly on your own.
You see, I don’t like to crow about other people’s mistakes.
In fact, in our line of work, much of what we get to do is to *fix* or alleviate those mistakes, at least when it comes to their tax implications. This year (of ALL years, with the implementation of the ACA wreaking big havoc in the preparation process) carries so many changes that users who fall prey to screaming offers from the “cheap” options are more exposed to wallet-sucking mistakes, or even an audit.
Plus, when you see stories like this one: http://cbsloc.al/14EVFs4 … well, you can be grateful that you trusted a real person, not a blind corporate monolith.
Further, do you remember when the Treasury Secretary (at the time), Tim Geithner, testified about tax irregularities in his own personal returns? Do you remember where he placed the blame?
And he’s not alone. But there’s a good way to fix that problem…
James Pantzis Uncovers A Case of Misplaced Trust
“Things can fall apart, or threaten to, for many reasons, and then there’s got to be a leap of faith. Ultimately, when you’re at the edge, you have to go forward or backward; if you go forward, you have to jump together.”
– Yo-Yo Ma
You may have heard me say it before, but it’s true: Did you know that we accountants like to joke to one another about how good these online software programs (TaxSlayer, TurboTax, etc.) are for our business? Firstly, they are not as “easy to use” as claimed, and secondly … they cost you an arm and a leg.
You might think they’re cheap. And on the surface, you might be right (though, in the last few years, a $1 Billion class action lawsuit was filed in the federal court in Philadelphia alleging gross misstatement of fees and deceptive standards of the federal “FreeFile” program … so even on the surface, it wasn’t always cheap).
But I’m not even talking about the money for the service itself.
Using those programs can end up leaving hundreds, or even thousands of your dollars in the coffers of Uncle Sam … even if you follow all of their instructions to a tee. I see it all the time–frustrated clients bringing in their prior year’s tax return, astonished at all the “hidden money” my staff and I are able to find for them!
Choosing the wrong method, or forms, in filing your taxes can place you directly in the crosshairs for an audit.
Even if you don’t owe a ton of back taxes, you still don’t want your record to show some IRS agent that there has been a discrepancy of some kind in the past, so that red flags begin to fly, and then more bureaucratic people start looking through all of your past tax filings and current income holdings … basically taking your social security number, and poking around in your private life.
(And if you think they won’t do this, read a little online about the increased “enforcement” measures the IRS has been taking year after year.)
They can do a lot of things you won’t want them to do. However, if you keep a clean slate (no IRS correspondence with you, related to filing your taxes incorrectly), the opportunities for them to mess with your personal stuff will be limited.
Here’s another reason why this is so important … now more than ever. New government regulations in 2014, delays in Congressional action, and issues with refund “loans” from the big chains are creating a mess in the tax industry… and with this year’s implementation of the health insurance requirement on tax returns, you don’t want to be left at the mercy of a piece of software, or a poorly-trained temp in a corporate tax prep “store”.
Yes, it can be seductive to “go it alone” … to trust a piece of software to point out possible deductions. To trust your work to poorly-trained preparers in a big box office. To protect against your chances of audits through online chatroom support or hourly employees.
But it can be a big trap.
Just ask Tim Geithner.
So, let’s get your financial paperwork in the hands of someone who cares.
To your family’s financial and emotional peace…
James Pantzis, CPA, PC
What happened last week in Paris was a horror show for those of us living in an ostensibly free society. Outrage, shock, argument — all of these things have been roiling through the last week, as we’ve watched. I’m sure you felt similar.
And, well, life has a tendency to keep on pulling us along, even as we attempt to process such things.
Soon, we will begin filing client tax returns to the IRS (electronically), and our offices will be jumping. There is a lot of change this year, and probably more than a little confusion among some tax offices because of the ACA this year. But we’ve been preparing for this for over 7 months now … and we’re pretty excited to see the fruition of our labors!
As well, we want to “seal the deal” on a variety of tax-saving maneuvers to which we’ve directed clients over the past year. In short, this is really fun for us here at James Pantzis, CPA, PC.
But with the ACA, and all of the changes every year, filing your taxes on your own is becoming much less fun for regular taxpayers — even with nice-looking softwares on the market which purport to make it “easy” for you.
I truly do pity those inexperienced ones who try to muddle through all of the different codes and forms on their own,without devoting even a week’s labor to the transaction. It really doesn’t pay to “go it alone” for certain tasks.
So, for those of you who want our help, I’ve put together a handy little list of what you’ll need to bring in. There may be certain situations where we’ll need other documentation to get you even more deductions. But, of course, we’ll let you know about that, should the situation arise.
Let me know your thoughts … and of course, if you’d like to talk this over with us, we’re here for you!
Pantzis’ 2015 Tax Time Document Chase List
“If you realize that all things change, there is nothing you will try to hold on to… there is nothing you cannot achieve.” -Lao Tzu
Yes, this is a long list — but it’s the unfortunate reality of our tax code that it’s not even comprehensive! But these items will cover 95% of our clients. Really, this is for ensuring that we’re able to help you keep every dollar you can keep under our tax code.
Even if for some strange reason you won’t be using our cost-effective services this year, feel free to use this list as a handy guide…
Social Security Numbers (including spouse and children)
Child care provider tax I.D. or Social Security Number
Employment & Income Data
W-2 forms for this year
Tax refunds and unemployment compensation: Form 1099-G
Miscellaneous income including rent: Form 1099-MISC
Partnership and trust income
Pensions and annuities
Jury duty pay
Gambling and lottery winnings
Prizes and awards
Scholarships and fellowships
State and local income tax refunds
Health Insurance Information (New for 2015)
* All 1095-A Forms from marketplace providers (if you purchased insurance through a Marketplace)
* Existing plan information (policy numbers, etc.)
* If claiming an exemption, your unique Exemption Certificate Number
* Records of credits and/or advance payments received from the Premium Tax Credit (if claiming)
Residential address(es) for this year
Mortgage interest: Form 1098
Sale of your home or other real estate: Form 1099-S
Second mortgage interest paid
Real estate taxes paid
Rent paid during tax year
Interest income statements: Form 1099-INT & 1099-OID
Dividend income statements: Form 1099-DIV
Proceeds from broker transactions: Form 1099-B
Retirement plan distribution: Form 1099-R
Capital gains or losses
Auto loans and leases (account numbers and car value) if vehicle used for business
Student loan interest paid
Early withdrawal penalties on CDs and other fixed time deposits
Personal property tax information
Department of Motor Vehicles fees
Gifts to charity (receipts for any single donations of $250 or more)
Unreimbursed expenses related to volunteer work
Unreimbursed expenses related to your job (travel expenses, entertainment, uniforms, union dues, subscriptions)
Education expenses (tuition and fees)
Child care expenses
Medical Savings Accounts
Tax return preparation expenses and fees
Estimated tax vouchers for the current year
Self-employment SEP plans
Self-employed health insurance
K-1s on all partnerships
Receipts or documentation for business-related expenses
State and local income taxes
IRA, Keogh and other retirement plan contributions
Casualty or theft losses
Other miscellaneous deductions
We hope this helps, and we really look forward to seeing you in here in 2015!
James Pantzis, CPA, PC
This first full week of the year is often cited as one of the most difficult and depressing weeks of the year. Far from shiny newness, experts say that with all of the let-down after the holidays, coming back to work, or leaving behind family, can bring a heightened sense of loss.
This, combined with the fact that we’re staring at 2-4 months still left of winter (depending what part of the country you call home, of course — we have clients and friends reading this from across the country) …
Well, it can be a tough week.
So I’d like to lighten your 2015 load by giving you some simple, actionable guidance on FINANCIAL resolutions which are easy (and profitable) for you to keep.
You see, I hope you don’t mind that I see it as my role in your life to not only provide authoritative and actionable tax advice for your specific situation, but also to play a role as a “coach” for your finances, and even your mindset.
This is why our clients and their friends seek us out for *more* than simple tax preparation, but a whole host of other services as well — from planning, to business services, to simple encouragement. I get to be someone in your life who says: “You can do this. You’re not alone.”
It’s my great hope that our relationship will continue to grow into 2015, and beyond. And not just for “business purposes”. We love our clients — you’re like family to us (the *good* kind of family, that is)!
So, with my coach hat firmly in place, here are some thoughts for effectively creating and pursuing your personal financial goals, as we move into 2015 …
James Pantzis’ Top 3 Financial Resolutions To Keep in 2015
“Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.” -Benjamin Franklin
Here’s the thing about most financial resolutions: They don’t usually last even until the end of January. That’s because making a permanent change in our behavior requires both time and a steely resolve. But I’ve found that we can develop financial character one action at a time.
So in that vein, here are some financial practices to take you from pauper to prince or princess if you add one each year. If you’ve already got one down, move to the next on the list.
By the way — no matter where you are on this list, we are here to help you. Whether it’s through financial advice, tax preparation or planning … well, we have all kinds of ways to help you stay on the path on which you want to be. You simply have to ask.
But here we go…
#1 MOST CRITICAL: Resolve to become (and stay) debt free. Now, I’m not Dave Ramsey, but there’s a reason why he’s become so popular: his approach works. I’d say that you can have a fixed-rate fixed-year traditional mortgage on your house — but nothing else, please. No equity line of credit on your house. No car payments. Certainly no credit card debt. Because you simply have to learn to live within your income — which, unfortunately, sometimes means going without. The millionaires among us really are frugal. So, learn to enjoy that process, and it’s a fantastic start.
#2: Automate your savings (AKA Pay Yourself First). You can start by getting the entire match if your company offers a 401(k) plan. Often this translates to saving something like 5% of your salary while the company contributes something like a 4% match — which is the fastest way to get an 80% return on your money. Most Americans forgo this match, believing they need to spend 100% of their salary. But you can learn to think like a millionaire and live well on 95% of what you make. If you don’t have a 401(k) plan, act like you do, and sock away 5% automatically.
Remember — these steps build off one another, so if you already have done the first 2, here’s your next step:
#3: Save another 5% in a taxable investment account. Automating savings is great, automating investment is even greater. Key word here: automate. At this point, you’re hitting a mark of saving 10-15% of your income. That’s a fast-track to long-term prosperity.
But I’m not quite done, grasshopper. However, I’m going to leave you with these for now, and come back to this again in the weeks ahead.
Best to you. May your 2015 be full of joy.
James Pantzis, CPA, PC
Happy New Year, folks! Now that we’re in 2015, the tax planning door has been closed and it’s time to start gathering your documents (well, you can still reduce your tax bill by opening an IRA or contribute to an existing one by April 15th). However, the best thing you can do now to help your 2014 tax bill is to make sure that you have a competent, caring professional by your side as you prepare your 2014 taxes. With all of the changes brought about with the ACA … this year, of all years, should not be one in which you go it alone.
And since we’re now in 2015, let’s also talk about how we handle our finances. What I’ve put together here isn’t your normal “how to save money better” information. Let me know your thoughts …
James Pantzis On Assessing Money Well Spent in 2015
“One resolution I have made, and try always to keep, is this: To rise above the little things.” -John Burroughs
“Life planning” is where financial decisions ought to start.
Life planning conversations with our clients, while not as frequent as the day-to-day tax planning and related financial ones, are nevertheless the most meaningful and potentially life-changing discussions.
When trying to raise financially savvy children, there are three things they need to learn: how to earn money, how to save and invest money, and how to spend money.
You might think that people don’t need to learn how to spend money. They do it naturally. Unfortunately, the way they “naturally” spend money is mindless spending.
The problem with most spending is that our actions are not consistent with our values.
The poor buy things; their homes are cluttered with them. The middle class buy liabilities like second homes and boats, and then they are obliged to make payments on and maintain them for years.
In contrast, the rich buy investments that appreciate and pay them dividends and interest for decades.
The problem is not just that the poor and middle class are not wealthy. The problem is that the poor and middle class are often not using their money to satisfy their values.
There is a book by Elizabeth Dunn and Michael Norton (called The Science of Happier Spending ) which chronicles the “research distinguishing spending that satisfies from that which disappoints.” The authors lay out five principles of spending that produce lasting dividends:
1. Experiences are more satisfying than stuff.?
2. Abundance ultimately backfires. Making indulgences rarer rather than frequent makes them more satisfying.?
3. Buying time is the best investment.?
4. Using “reverse credit” (pay now––use later) imbues us with the pleasure of anticipation rather than the buzzkill of paying later for something already consumed.?
5. Spending on others trumps spending on oneself.
This seems like a good starting place for judging money well spent.
If you were in charge of a group of people shipwrecked on an island, and you only had one doctor, you would “buy” his time in ways like having other people cook for him and keep his house in order, so as to free him from any duties other than doctoring, where he is the most valuable.
Many wealthy people are wealthy because their time is extremely valuable. If they are smart, they do not cook for themselves, or mow their own lawns or perhaps even drive themselves to work. They buy time by paying others to do those things for them, and as a consequence use their time in a more valuable way.
The same principle applies for anything that only you can do. You are the only person who can be a mom or dad to your children. Buying time to make those relationships happen is a great life-planning investment.
If you have children, print a copy of these five principles and discuss them at the dinner table. Such conversations are one of the ways we impart values to our children, and financial planning begins with moral or spiritual values.
Life goals may fall into one of several types, but since the course of your life is unique, the way you handle your money to help you in your calling will be tailored to you as well.
Aligning your money and your values isn’t an easy process. It is as difficult as aligning your eating and your health. And, of course, during this holiday season, we’re ALL feeling the disconnect there.
But this is what my team and I are here for. When you come to us for your planning this year, if you’re willing, let’s set a time to have a longer conversation about what you would like to do with your life. Because that’s really where everything comes together.
To your family’s financial peace in the new year …
James Pantzis, CPA, PC
As much of the nation and world has been enjoying this holiday season, my team and I have been preparing for a season of a different kind — TAX season.
And sure, we’ve certainly been pausing to meditate on the beauty of THIS season, but it just so happens to always coincide at the dawn of our busiest time of the year. And this year (2015) is shaping up to be a very “interesting” year.
The Affordable Care Act (“Obamacare” or the “ACA”) has a bunch of health care tax provisions that are kicking in this year, that will definitely affect your tax return.
Enough so that I am today devoting my post to you about its ramifications.
Honestly, I prefer giving quick tax alerts (when they’re necessary) in my introduction space, and then write something bigger picture and more analytical than the “just the facts, ma’am” approach I’m providing you today … but sometimes, well, the facts need to be shared.
So in that vein, PLEASE share this information with your friends and colleagues. There very well may be some ugly surprises for people who are not aware of some of these challenges.
(I will continue to be sharing more about the ACA and its impacts for regular taxpaying families and businesses, so if you are receiving this and are NOT a subscriber to my weekly notes, you can fix that here: )
What Brooklyn Taxpayers Need To Know About The ACA
“Expect trouble as an inevitable part of life, and when it comes, hold your head high, look it squarely in the eye and say, ‘I will be bigger than you. You cannot defeat me.'” -Ann Landers
First of all, this legislation has continued to be a political firecracker. I am NOT making certifications or predictions about the political, judicial or legislative future of this bill.
My job, as your local Brooklyn tax professional, is not to rail against the establishment nor to prop it up — instead, I am YOUR advocate as you walk through the byzantine process of fulfilling its requirements.
From what I am hearing inside the tax professional world, it seems unlikely that this legislation could ever become “unwound”, and it’s high time that all families and small businesses adjust to the world in which we find ourselves, and prepare for its effects.
Frankly, this upcoming year (2015) will be the first year that ALL taxpayers will feel the effects of the Affordable Care Act. That’s because starting with returns that are due on April 15, 2015 (which cover the year 2014 — the IRS and many others refer to this as “Tax Year 2014″ or TY2014) … tax returns are now required to report on health insurance coverage status.
This is whether you enrolled in health insurance (or not), and whether you used an ACA plan through the various state and federal marketplaces — or not. It’s for ALL taxpayers.
(There are some exemptions to this requirement, and those can be found here: http://1.usa.gov/1yUTga0 ).
You are required to show that you have had insurance starting on January 1, 2014 in order to avoid the penalty — and that you were without insurance for less than 3 months during 2014, if you are to avoid penalties.
Future penalties are scheduled to increase, so although for some taxpayers it may seem like a decent tradeoff to just pay the penalty for this year, it becomes increasingly costly to do so in the future.
Second, premium tax credits will be evaluated and adjusted according to information submitted on your tax returns.
This means that if you are 1) currently receiving a tax credit (provided directly to your health insurance provider as payments towards your premium — and offered only to eligible individuals and families without access to employer-sponsored coverage, and who purchase insurance through a marketplace) and 2) your income or household size has changed since you were granted the credit, then your tax refund or obligation may be affected.
So, an important note: if your income or the size of your household HAS changed, it is imperative that my staff and I help you to report this properly on your return. In fact, it may be worth contacting us (http://www.accountantbrooklyn.net//contact ) while you still can (whether you are an existing client or not), and letting us know how your income has changed. We may be able to help you prepare, or adjust your income appropriately through our return preparation process, etc. You can also call us: (718) 858-9864 if you think you will need our help.
If you received this premium tax credit, you will be receiving forms 1095 in the mail. KEEP THESE FORMS. You will need them for the tax return process.
Sadly, the issuance of these forms is optional for some entities, so it can be a complicated issue to make sure you have all of them. Which leads me to my last point…
Please, for the love of all that is good and holy, do NOT go it alone this year when preparing your tax returns. I understand that this exhortation may fall on deaf ears to you, as there is clearly a measure of “self-interest” in my saying this to you. But please understand, whether you use MY services or someone else’s — I will be much happier to hear that you had an experienced professional by your side than that you relied upon the notoriously unreliable algorithms of tax softwares. All of the different factors that are coming into play on this year’s tax return are creating a perfect storm for the software companies, and, well … let’s just say that this is probably not the year to “give them a shot.”
Again, self-serving nature of this statement acknowledged and understood.
But I do hope you can tell that most of all, I want your family to thrive and not to have to worry about all of this junk.
That’s what we’re here for. Let us worry about this now, so you don’t have to do so later on.
To your family’s financial peace over these holidays…
James Pantzis, CPA, PC