Tag: St. Louis

Posted on by Jan Roberg

5 Reasons to Bring Your Old Tax Return to Your St. Louis Tax Preparation Appointment

St. Louis Arch

Beautiful effect on the St. Louis Arch downtown. -Photo by Photo by Eyton Z at Flickr.com

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I hear this question a lot, “Why does my tax preparer want to look at my old tax return?”  The answer is:  Lots of reasons.  Let me give you a few examples.

 

1. Carry forwards:  A carry forward is something that was on your last year’s tax return that can affect your taxes this year.  A really important one is capital losses.  Let’s say you sold some stocks last year at a big loss and couldn’t use all your losses on last year’s return.  You get to carry those forward until they’re used up.  I once had to amend a bunch of tax returns for a woman with $100,000 of loss carry-forwards.  She had never brought her returns to her preparer before.  Because the returns went back for more than three years, some of her deductions were lost forever.

 

But it’s not just capital losses.  All sorts of things from last year can affect this year’s taxes like depreciation, estimated tax payments, what you paid to the state, did you itemize or not, and did you pay any alternative minimum tax (AMT), just to name a few.

 

2. Continuity:  the IRS looks at things funny when you’ve got changes.  Changing something simple like putting the wife’s name on top one year, and then putting the husband’s name on top the next can be seen as an attempt to hide something.  I always list taxpayers in the same order as the prior year return to avoid trouble.      I once helped taxpayers who had a simple notice about their taxes.  It was normally an easy thing to fix—make a quick phone call and mail a document and you’re done.  What I would call a no-brainer as far as audit letters go.  But for this couple, it took weeks to settle the issue; I couldn’t understand the problem.  Finally, the agent on the case explained that they were “digging into the taxpayers” because they had flip flopped the names on the return for different tax years, which is a common habit with fraudsters.

 

Fortunately for the couple had nothing to hide—but a teensy little question on their tax return (not even a mistake, just a question) led the IRS to look back through several years of tax returns because of the  flipped names.

 

3. Finding missed deductions:  If you have a professional do your taxes, we want to find a missed deduction.  It’s what we do.  For us it’s the chocolate sauce on the ice cream.  It’s well…., click on this video to see how finding extra money for you feels http://www.flickr.com/photos/83052216@N00/4354753195/in/photolist-7CPfpD-9LYL7p

 

4. Making sure your new preparer doesn’t miss something:  I have some clients with some pretty complicated paperwork.  They have tax forms that aren’t included in home tax preparation software and aren’t even found in some professional packages.  I have to get some of these forms from the IRS and prepare them by hand.  (I actually print out extra copies of those forms and tell my clients, “If you ever change preparers, your new preparer needs to see these.”)   But even if your tax return is fairly easy, letting your preparer see your last year’s return is  a good idea—you don’t want her to miss something.

 

5. Comparison:  Putting your tax returns together for comparison purposes is a valuable tool for you.  How did you do this year?  Did you make more than last year?  Did you make less?  What did you do differently?  What should you do differently?  You’ve probably heard the old saying, “Those who don’t study history are condemned to repeat the same mistakes.”  The same goes with your tax return.

 

So please, bring your old tax return with you when you make a tax appointment.  It will make your preparer happy and it could save you some money!

Posted on by Michael Siebert

Would You Like to Donate $3 to the Presidential Election Campaign Fund?

Busch Stadium St Louis

Photo by Robert Jackson at Flickr.com

 

***Roberg Tax Solutions congratulates the St. Louis Cardinals for making the 2013 World Series.  We have been having “Cardinal Apparel Day” every day this week.  As of now, the series is 1-1, game 2 was a Cardinals 4-2 win, and we are back on track after game 1’s ugly loss.

 

Let’s face it—this is the long lost question in the world of tax preparation.  You probably have a better chance of Miley Cyrus stealing your “Go Cardinals!” foam finger than you do of being asked about this inquiry.  This does not mean that people aren’t checking the box however.  In 2012, there has been about $37 million contributed up to July with a total fund balance of about $232 million.  Not a bad chunk of change.  During my time in the Volunteer Income Tax Assistance Program—commonly referred to as VITA—other volunteers and I routinely asked the question because it was part of our standard operating procedure.  I am not sure if the mainstream brick and mortar tax firms ask the question but I bet Jan knows.

 

Anyways, my point in this brief writing is to inform you about this tiny section of the 1040 series—the who, what, why, when, how, etc. of the presidential election fund or at least point you in the direction of knowing those questions.

 

2012 Form 1040 instructions page 12 states verbatim:

 

“This fund helps pay for Presidential election campaigns.  The fund reduces candidates’ dependence on large contributions from individuals and groups and places candidates on an equal financial footing in the general election.  If you want $3 to go to this fund, check the box.  If you are filing a joint return, your spouse can also have $3 go to the fund.  If you check a box, your tax or refund will not change.”


It is important to understand that that checking this box will not change your tax or refund.  So what is actually happening?  It means that you want $3 of tax dollars you already owe to the government to go towards the Presidential Election Campaign Fund (PECF).  When you check the box, the government has to allocate that $3 into the PECF.  So there is no tax incentive to check or not check this box.  This is a valid reason for self research about the fund to make a well informed decision and to support your reasons for doing so.

 

In 1975, the Federal Election Commission (FEC) was born to oversee the Federal Election Campaign Act (FECA).  This is the law that governs the financing of federal elections.  Obligations of this independent agency include the divulgence of campaign finance information, enforce limits and prohibitions on contributions, and become the all seeing eye of Presidential election public funding.

 

Furthermore, the agency is made up of six members that of which are appointed by the President of the United States and contingent upon Senate approval.  Each member serves a six year term.  Stated precisely from http://www.fec.gov/about.shtml, “By law, no more than three Commissioners can be members of the same political party, and at least four votes are required for any official Commission action. This structure was created to encourage nonpartisan decisions.”

 

It was that the check box used to be $1 dollar but increased to $3 in 1994 by Congress.  Extensive detail about the $3 check off can be found at http://www.fec.gov/pages/brochures/checkoff.shtml.  The information is well put, easy to read, and concise.

 

The Federal Election Commission has charted the Fund since its 1976 inception.  The most recent chart can be found here: http://www.fec.gov/press/bkgnd/pres_cf/PresidentialFundStatus_September2012.pdf.

 

If the candidates decide to use the fund money, they must agree to a spending limit.  In the 2012 election, neither Barack Obama nor Mitt Romney used the Presidential Election Fund resulting in a very expensive election.