Christine Wright, a partner at Beasley, Mitchell & Co., answers all your pressing tax questions.
Written by Isabel A. Walters
The deadline to file federal taxes is just around the corner, and for many, that often results in feelings of dread and overall panic. But it doesn’t have to be that way. Having all your paperwork in order—along with some professional guidance—can go a long way in easing the burden when April 18 arrives.
What should I bring to my tax appointment?
Whether you’ve booked an appointment at Beasley, Mitchell & Co. or you’re using online software to file your taxes, it is imperative to get all your tax forms together. Have ready W-2s and other earning statements from all employers, proof of any quarterly tax payments, charitable donation documents, as well as verification of health insurance. (See Christine’s list for other forms you might need.)
“We like to see last year’s returns, in addition to all the tax forms for this year,” Christine says. “It’s usually a 30 to 60-minute appointment. We talk about what changed compared to the previous year, look at the documents they’ve brought, and go over questions they have.
“Once we have their tax returns ready, we can sit down and go through it with clients, especially if it’s their first time [using our services]. If they get a tax notice, we want them to be back in touch with us so we can help them respond.”
Do I really need an accountant?
Not everyone needs a CPA, but it’s important to know what services they provide, for when the time comes that you do need extra help. Christine recommends a CPA for business owners, as well as individuals with more complicated returns or with many investments or retirement accounts.
She adds that while many of us might not give it much thought outside of tax season, it’s beneficial to keep your CPA informed about major decisions as they occur throughout the year. That includes buying or selling property, withdrawing from an IRA, etc. “In my opinion, I want to have a CPA that already knows me and that I’m comfortable with, even before I need them,” Christine says. “Just like you build your relationship with your doctor or attorney, you want to have that long-term relationship with somebody that you can call and say ‘this has changed.’ I wouldn’t want to be looking at the last minute trying to find somebody.”
A CPA can also help keep you on track come tax season. In January, for example, Christine starts sending her clients a Tax Organizer booklet as a reminder of the things they should have ready. “I want to know what worries the clients, so we can plan accordingly. Everyone is different, and so are their goals,” Christine explains. “I’d say 99 percent of the time, once someone has worked with us, they don’t want to go back to doing their own return. They didn’t feel confident. Now, they feel like they have another pair of eyes looking and asking questions they wouldn’t have thought of before.”
FYI: Fees are based on hourly rates, and the staff includes Spanish-speaking CPAs.
What are some common mistakes you see during tax season?
Common mistakes include failure to include all eligible daycare expenses when claiming the dependent care credit, for kids under age 13. “And don’t forget – those costly sports camps, music camps and summer day camps may also qualify,” Christine adds.
Another common error is failure to report non-U.S. financial accounts. “There are strict rules regarding reporting certain non-U.S. accounts and the penalties can be extremely large. Be sure to discuss any non-US accounts that you own, or have signature authority over, with your CPA.”
Don’t forget these important documents!
(From Christine’s own Tax Organizer booklet)
- Mortgage interest
- Real estate taxes
- Cash charitable donations
- Non-cash donations (bring receipts to accurately report the date, organization and description of what was donated)
- Unreimbursed employee expenses
- Information on any real estate or business interests bought/sold
- W-2G for gambling or lottery winnings and proof of gambling losses
- 1099 forms for any retirement income (IRAs, 401ks, etc.)
- If you made quarterly tax payments, bring a list of payment dates and amounts paid
Beasley, Mitchell & Co. | 509 S. Main St. | 575-528-6700 | bmc-cpa.com