A checklist to ensure you have a successful tax-day?

If you are confused on what documents are necessary to help you have  a successful tax-day, we have put together a short list of items that may make it a little easier on you and your accountant.

Income-related documents: Bring any & all W-2, 1098, 1099 & schedule K-1 forms. 

Expense-related documents: 

• Childcare expenses
• Moving expenses
• Work-related expenses such as uniforms, tools, or education
• Student loan interest
• IRA contributions
• Medical expenses
• Charity contributions 
• Real estate and property taxes paid
• Alimony paid or received

 The key to having a good tax season is by keeping good records. 
"To be prepared is half the victory." - Miguel de Cervantess

Last years tax return: Bring last year’s tax return for reference, as you may qualify for some of the same deductions and this will make it easier to calculate this years return.

Goals: You may not realize that your accountant is also available to discuss your financial goals and will assist you in reaching those goals by making short and long-term goals.

To meet our team and for guidance on how to navigate through this tax season - please contact Ken Anaya at: (844) KAA-4TAX or (844) 522-4829

Going Green Could Reduce Your Taxes

By definition, a “green home” is an environmentally sustainable building, designed, constructed and operated to minimize the total environmental impacts it also focuses on the efficient use of energy, water, and building materials. A green vehicle, or clean vehicle, or eco-friendly vehicle is a road motor vehicle that produces less harmful impacts to the environment than comparable conventional internal combustion engine vehicles running on gasoline or diesel, or one that uses certain alternative fuels. The following information was taken directly from the IRS website and provides helpful tips on how going green can help you become more financially responsible, create a smaller carbon footprint, and improve your home's resale value.

 

When you invest in energy-efficient products, you may be saving money on both your energy bills and your tax return. The Internal Revenue Service wants you to know about these six energy-related tax credits created or expanded by the American Recovery and Reinvestment Act of 2009 Residential Energy Property Credit. This tax credit is for homeowners who make qualified energy efficient improvements to their existing homes. 

This credit is 30 percent of the cost of all qualifying improvements. The maximum credit is $1,500 for improvements placed in service in 2009 and 2010 combined. The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems. Residential Energy Efficient Property Credit. This tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, solar electricity equipment, geothermal heat pumps and wind turbines installed on or in connection with their home located in the United States and qualified fuel cell property installed on or in connection with their main home located in the United States. The credit, which runs through 2016, is 30 percent of the cost of qualified property. ARRA removes some of the previously imposed annual maximum dollar limits.

 

• Plug-in Electric Drive Vehicle Credit ARRA modifies this credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009. The minimum amount of the credit for qualified plug-in electric drive vehicles, which runs through 2014, is $2,500 and the credit tops out at $7,500, depending on the battery capacity. ARRA phases out the credit for each manufacturer after they sell 200,000 vehicles.

• Plug-in Electric Vehicle Credit This is a special tax credit for two types of plug-in vehicles — certain low-speed electric vehicles and two- or three-wheeled vehicles. The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made after Feb. 17, 2009, and before Jan. 1, 2012.

• Credit for Conversion Kits This credit is equal to 10 percent of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle that is placed in service after Feb. 17, 2009. The maximum credit, which runs through 2011, is $4,000.

• Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed Against AMT Starting in 2009, ARRA allows the Alternative Motor Vehicle Credit, including the tax credit for purchasing hybrid vehicles, to be applied against the Alternative Minimum Tax. Prior to the new law, the Alternative Motor Vehicle Credit could not be used to offset the AMT. This means the credit could not be taken if a taxpayer owed AMT or was reduced for some taxpayers who did not owe AMT.

Do you get the full credit as Boss of the House?

A very common mistake is for an unmarried individual taxpayer filing status as a “Single” taxpayer when they qualify for the much-more tax favorable “Head-of-Household” (HOH) filing status.

Your filing status is used to determine which standard deduction you are eligible for and what tax credits will be available. Discuss this topic with your tax preparer as they will need to evaluate the one that will result in the lowest amount of tax that is best for you. 

 

Talk with your Tax preparer Ken A Anaya about this deduction.

Did you purchase a New Home in 2016?

If you bought a home last year, you will find a tax write-off buried under all the paperwork accumulated from the slew of documents your escrow company provided. You are able to deduct mortgage points paid by the seller. It is best to bring your final escrow documents when having your taxes prepared. I know that being able to write off an expense someone else has paid for sounds too good to be true. But it is true, so bring this paperwork when having your taxes prepared. 

Talk with your Tax preparer Ken A Anaya about this deduction.

Did you make any Charitable Contributions in 2016?

It is best to have all charitable contributions in receipt form to back up the donation of $250 or more. The tax law says no write-off is allowed should you not have a receipt or letter from the organization. Cash donations of less than $250 made in 2016 are not allowed unless you retain either a bank record that proves the donation. Like for example, a canceled check, bank statement, or debit/credit card statement. Taking it one step-up is to have a written acknowledgment from the organization on their letterhead. Small undocumented cash contributions, such as money placed on church collection plates and cash dropped in red buckets (Salvation Army) at Christmas time won't qualify for write-offs. Get a receipt or have a canceled check from the charity to lock in your rightful tax break.

As for noncash charitable donations of used clothes and household items, you get no deduction unless the stuff is in “good” condition. “Household items” include furniture and furnishings, electronics, appliances, linens, and the like. In other words, you get no charitable write-off for donated junk. See IRS Form 8283 at www.irs.gov for more details on the rules for noncash donations. 

Talk with your Tax preparer: Ken A Anaya about this deduction.

2016 Standard Mileage Rates for Business, Medical and Moving

The 2016 standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes will be:

·         54 cents per mile for business miles driven

·         19 cents per mile driven for medical or moving purposes.

·         14 cents per mile driven in service of charitable organizations.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Consult with Ken A. Anaya for further detail call (844) KAA-4TAX or www.KAA4Tax.com

Plan now to Use your Health FSA in 2017

Eligible employees, now is the time to begin planning to take full advantage of their employer’s health flexible spending arrangement (FSA) during 2017.

(FSA's) provide employees a way to use tax-free dollars to pay medical expenses not covered by other health plans. Because eligible employees need to decide how much to contribute through payroll deductions before the plan year begins, many employers this fall are offering their employees the option to participate during the 2017 plan year.

Interested employees wishing to contribute during the new year must make this choice again for 2017, even if they contributed in 2016. Self-employed individuals are not eligible.

An employee who chooses to participate can contribute up to $2,600 during the 2017 plan year. Amounts contributed are not subject to federal income tax, Social Security tax or Medicare tax. If the plan allows, the employer may also contribute to an employee’s (FSA).

Throughout the year, employees can then use funds to pay qualified medical expenses not covered by their health plan, including co-pays, deductibles and a variety of medical products and services ranging from dental and vision care to eyeglasses and hearing aids. Interested employees should check with their employer for details on eligible expenses and claim procedures.

Under the use or lose provision, participating employees often must incur eligible expenses by the end of the plan year, or forfeit any unspent amounts. But under a special rule, employers may, if they choose, offer participating employees more time through either the carryover option or the grace period option.

Under the carryover option, an employee can carry over up to $500 of unused funds to the following plan year — for example, an employee with $500 of unspent funds at the end of 2017 would still have those funds available to use in 2018. Under the grace period option, an employee has until 2½ months after the end of the plan year to incur eligible expenses — for example, March 15, 2018, for a plan year ending on Dec. 31, 2017. Employers can offer either option, but not both, or none at all.

Have questions visit our website at: www.kaa4tax.com or call (844) KAA-4Tax.

How to Become the Most Interesting Accountant

Valuable Information from a blog I stumbled upon this afternoon: How to Become the Most Interesting Accountant in Just 6 Steps. By Bryce Sanders (President of Perceptive Business Solutions, Inc.) 

The 6 steps:

1. Interested in Others. In dating, people are obsessed with talking about themselves. If people love to talk about themselves, use this to your advantage. Example: “Thanks for sponsoring this exhibition of Rodin sculptures. How did you get interested in Rodin?” or “Congratulations on the acquisition of that software company. How do you see it fitting into your overall firm strategy?” Outcome: They enjoyed meeting you because they told their favorite stories.

2. Depth. Successful people know lots of airheads. They are also surrounded by people telling them what they want to hear. You need a diversity of knowledge. Are you reasonably smart or not? Example: “You brought up the economic slowdown. The U.S. and U.K. economies are doing well. but now Europe’s having problems. Even Germany is having a rough time, according to The Economist.” Outcome: You took a position and referenced your sources. You are direct and well-read.

3. Experiences. Be able to tell a good story. Senior executives need to engage audiences. They appreciate the skill. Often when cultivating well-off individuals we want to be seen as fitting into their world and we exaggerate our accomplishments. They can tell. Charitable giving is a good area of common ground. It’s likely you are both givers (vs. takers) if you are meeting at a charity function. Example:“We support the arts in our community. Not on your scale, of course. We do what we can for the historical society and the symphony?”Outcome: By using their support for the event you are attending as your guide you have demonstrated you share the same values.

4. Tact. You can have a point of view, but don't push it! You've just met this person. You don't know if they smoke, own a gun, or vote conservative. Endorsing an extreme position can make you come across radical. Example: "With all we know about smoking, I think anyone who still smokes is an idiot. They are a menace to society." Outcome: They may have been thinking about ducking outside for a cigarette. Now its an ideal opportunity to get away from you.

5. Sense of Humor. See the fun in everyday situations. Some people have naturally upbeat attitudes. People like them. They want to be around people who can roll with the punches. Example: “The cab driver who picked me up at the airport told me he had a second job as a bounty hunter! Imagine that!” Outcome: You made them laugh. People like other people who have that skill.

Local Knowledge :

Example: " I'm glad the new bypass was approved. It will cut down on commuting time. More important, it will absorb the truck traffic and make several of those undeveloped properties that are zoned commercial a lot more attractive for manufacturing." Outcome: You understand the impact of local votes and legislative decisions on the local economy. You get it! Meeting movers and shakers in a social setting is very similar to dating. It’s not that hard to make yourself interesting to another person. Done well, it’s extremely unlikely they will find you boring.

The Benefits of hiring an Accountant

Every business is unique. Because of this, accounting needs vary. To meet your company’s needs, KAA Data and Accounting provides a suite of services certain to fulfill the requirements of virtually any small business.

KAA Data and Accounting can help out at any stage of growth with your business. We offer services beyond payroll and tax returns. We are here to rid you of time-consuming tasks and give your the opportunity to focus on the more important things, like generating revenue. We also give you the peace of mind that you are working with trusted individuals who know the importance of taking care of even the smallest detail.

Small business accounting can become complicated and confusing if you are handling it on your own. If you feel that you are at the point where you are losing control of who owes you or how much you owe, then it is probably time to hire a professional who can help you get back on track!

The Benefits of hiring an accountant:

1- We know what we are doing: We can help save you money in missed deductions. You are also paying for peace of mind because you now have a mentor to help you make better financial decisions. A good accountant will know how to save you money and give you advice on the most tax efficient way to run your business.  

2- It allows you to focus on running your business: Having to handle the paperwork and keep up to date on expenses verses revenue can be extremely time consuming and actually take you away from what you do best, running your business!

3- Help you fill out forms correctly and in a timely manner: We ensure that your tax return and any other documentation is filled out correctly and more importantly, we ensure it is completed on time. If you miss a deadline for important documents like tax returns, you could face a fine.