Income Tax Preparation, Accounting and Payroll service by Don Brooks & Associates - Don Brooks Associates, Inc.

Q: I quickly penciled in my tax return and I think I will owe lots of money. Can I file an extension so I have more time to pay?

A: No. Filing an extension only extends the time you have to file your tax return. It does not extend the time you have to pay your tax liability. There are various options available for paying your tax liability however. IRS now accepts credit cards (there is a fee) and Installment agreements (there is a fee). You should speak with a tax professional for further guidance.

Q: I just realized that I have not filed my tax return in a few years. What should I do?

A: You should file the returns you haven’t filed. You’ll pay interest and probably a penalty (unless you’ve got a really good reason). As long as you come clean voluntarily, you should avoid any truly serious trouble. By the way, there’s no statute of limitations on non-filed returns. Therefore, if you don’t file returns, interest and penalties continue to accrue.

Q: I was cleaning out my house and came across all of these old records. How long should I save these records for?

A: Generally speaking, the following are recommended periods of retention for various documents:

7 Years

Tax Returns (uncomplicated), W-2's, 1099's, Cancelled checks supporting tax deductions, Bank deposit slips, Bank statements, Charitable contribution documentation, Credit card statements, Receipts, diaries, or logs pertaining to tax returns.

Ownership Period + 7 Years

Investment purchase and sales slips, Dividend reinvestment records, Year-end brokerage statements, Mutual fund annual statements, Investment property purchase documents, Home purchase documents, Home improvement receipts and cancelled checks, Loan paperwork.

Permanent

Tax Returns (complicated), Retirement plan annual reports, IRA annual reports, IRA nondeductible contributions (Form 8606), Divorce documents, Estate planning documents.

Q: I have a basic tax return, why should I come see a professional tax preparer?

A: There are many advantages to having your tax return prepared professionally. Since your return will be filed electronically, you may receive any potentional refund much quicker. Also, professional tax preparers are use to working with tax returns and are familiar with many IRS procedures that you may not be. Professional tax preparers may be able to help reduce your tax liability.

Q: I have always done my own tax return, but this year I want to have my return done professionally. What should I bring with me?

A: You will need to bring all the relevant tax documents that will be needed to complete your tax return. These could include, but may not be limited to:

You should also bring your previous two years tax returns so that the preparer can see how you have filed your returns in the past.

Q: I have heard that it can be quite expensive to have my taxes done professionally. How much will this cost?

A: Fees can vary depending on the complexity of the tax return. A tax return that involves nothing more than one W-2 will be less expensive than a return that involves income from a rental property. The more work and forms that are required to complete you tax return, the more the charge will be.