Client letters:
Information for Preparation of 2011 Individual Income Tax Returns
Year 2011 will soon be drawing to a close. Here are some year-end tax-planning tips as we wrap up the year:
- If you have investments in which you have an unrealized loss, you should consider whether you should realize those losses by selling the investments before the end of the year.
- If 2011 will be a relatively low tax year for you, you may wish to consider selling investments in which you have an unrealized gain, in order to pay tax on those gains at relatively low rates.
- Under current law, 2011 is the last year for taxpayers age 70 1/2 or older to take advantage of an up-to-$100,000 annual exclusion from gross income for otherwise taxable individual retirement account (IRA) distributions that are qualified charitable distributions. Such distributions aren't subject to the charitable contribution percentage limits and aren't includible in gross income.
- Registered domestic partners in community property states such as Washington are required to report half of community income and expense as belonging to each spouse. You or your spouse may wish to recognize some income this year if there is a big income disparity between you and your partner.
- For 2011 and 2012 only, Congress has increased the life time gift amount to 5 million and made it the same for gift, estate and generation-skipping transfers, along with some other favorable estate tax provisions. Consider re-visiting your estate plans to take advantage of these short-lived benefits.
- If you have a household employee, remember the payroll tax filings are due by January 31, 2012.
For more tax planning tips and recent tax updates, please visit our website at www.bolsoncpa.com. And of course, you are always welcome to contact us. We Are Getting Ready to Prepare Your 2011 Income Tax Return
It is time to begin planning to prepare your 2011 income tax return. This year Congress has been busy passing laws that will impact your taxes in both the short and long term. We look forward to working with you to assure that you are in compliance with the ever changing tax law and that you take the most advantage of the tax savings allowed. Meet Your 2011 Tax and Financial Planning Team
Your CPA is not one person, but a team of professionals who work together to serve you. All of us are excited to work with you again this year.
We would like to introduce to you Dana Luhr, our new office administrator. Many of you probably have talked or exchanged emails with Dana already. Dana came to us in August with prior CPA firm experience and is excited to meet all of you.
Amanda Chang has been a shareholder since 2008. She enjoys managing our firm’s tax practice and her increased responsibilities in general client and firm management. We benefit from her considerable expertise with business clients, including corporate, partnership, and multi-state tax matters. She has worked with the majority of our individual tax clients as well. She is looking forward to working with all of you again this year. Amanda has a Master of Science in Taxation and is also an investment adviser representative.
Adele Bolson is devoting more time to personal financial planning and investment management, and consulting with clients. She very much looks forward to seeing our clients again this year. Although she will be delighted to meet with you to go over your tax data and discuss your other financial matters, tax return preparation will be done by Amanda, so if you prefer to meet with her directly, she understands.
It is a great joy for all of us to help our clients meet their financial and life goals. We Appreciate Referrals
The highest honor you can bestow on us is referring someone you care about. Your referrals have enabled our firm to grow. We appreciate your trust and confidence in us and will take good care of everyone you send us. As a token of our appreciation, we will send you a $25 gift card for each person that you refer to us that has become a client. Client Portal on Our Website
You have expressed concerns to us about the security of delivery method when sensitive information is involved; and we listened. We have recently added a new tool to our website that addresses your concerns! It now has a “client portal” where you have a designated and secure account. This will enable you to send us your documents securely and directly through our website, and we can make available documents, such as your completed tax return, the same way. No more risks from emailing documents, or the hassle of encrypting and un-encrypting! To access your account, simply go to www.bolsoncpa.com, click on the “client resources” tab and select “client login” from the drop down menu and you will be prompted to create your unique user id and password. Please safeguard your user id and password since we don’t have access to them. We encourage you to periodically visit our website at www.bolsoncpa.com, where you can find more information about our firm and services we offer, answers to frequently asked questions, and links to other valuable websites. We also periodically post articles about topical tax and financial subjects. You may request appointments directly on our website, including an appointment to prepare your income tax return. Services We Offer
Many people think primarily of taxes when considering the services of a certified public accountant, and indeed tax return preparation is a major core of our work. In addition to income tax preparation, we provide several other services.
For our business clients, we review or compile financial statements, consult on a wide variety of business issues, assist with recordkeeping, and assist new companies with a wide variety of start-up issues.
We provide investment management and financial planning, always with our clients’ best interests as our only concern. We have been especially gratified that since becoming a registered investment adviser in 2000, many of our clients have entrusted us with managing their money.
As the years pass, more of our clients have needs for estate planning, trust administration, and estate administration. We have experience and knowledge in the complete estate administration process, including preparation of federal estate tax returns (the 706), state inheritance tax returns, and estate income tax returns. Tax organizers
Use of tax organizers helps to minimize errors caused by omitted data. Starting with this year, we will stop mailing organizers but instead place a pdf copy of your organizer in your portal by January 16th, 2012. This will avoid the security risk of lost or stolen mail or email. However, if you prefer to have a hard copy mailed to you, we will be happy to do that. Just send an email to dana@bolsoncpa.com or call her, requesting that we mail you a printed copy of your organizer. The organizer does contain personal information. It is possible for this information to be stolen and misused, whether it is sent by U.S. Mail or email. Tax Interviews
Our experience is that you will receive more value from our services, and the tax return preparation process is more efficient and accurate, if we meet to go over your tax data. Please don’t feel you must have every document before we meet. We understand that K-1s from other parties may arrive later, and you may receive corrected 1099s. As long as we receive those final items by April 2, we will do our very best to complete your tax return, or draft it for your extension payment, by April 17. But let’s not wait for them to get started on your tax return; please schedule the appointment for the earliest date by which you can summarize the data over which you have some control.
We schedule these appointments from February 1 through March 16. Investment brokers have until February 15 to send 1099s. In order to complete your tax return by April 17, or to draft it so that an accurate estimate can be made of taxes to be paid with your request for extension, it is important that we receive the bulk of your data no later than March 16. We need the time between March 16 and April 17 to complete tax returns and extension estimates with the information you have brought to us.
We will start scheduling appointments January 10, so if you get your appointment request in by January 6, you will be given first priority in your choice of appointment times. If you wait until later to schedule your appointment, it may be difficult to schedule you at your preferred time. Please complete your appointment request on our website at www.bolsoncpa.com under “contact us”, or email your appointment request to dana@bolsoncpa.com, or mail or fax back the appointment request form at the end of this letter.
Extensions
April 17, 2012 is the deadline for paying your 2011 income taxes, and either filing your return or requesting an extension until October 15, 2012. If your taxes are not paid in full by April 17 interest will be charged, and often penalties too. And of course you will still need to make your April, June, and September estimated tax payments for 2012 even though your 2011 tax return has been extended. By March 16 we need all of your data that we are to use in drafting your income tax return so that we can advise you of how much should be paid.
We will be filing extensions electronically this year. We recommend that you sign up for EFTPS (www.eftps.com) with the IRS to make tax payments. This service is free and easy to use. Your check will never be “lost in the mail”. We have prepared step-by-step EFTPS sign-up instructions that are easy to use. Please email dana@bolsoncpa.com if you would like the instructions sent to you. Schedule Recap
March 16: We must have the bulk of your tax data in order to prepare your tax return for filing by April 17.
March 16: If we are going to draft your tax return to estimate taxes due by April 17, we need all the data you wish us to consider in that draft today.
April 2: We need your final open items such as missing K-1s to complete your return by April 17.
April 17: Taxes must be paid, and returns or extensions filed.
April 17: Your first 2012 estimated tax payment is due.
June 15: Your second 2012 estimated tax payment is due.
September 17: Your third 2012 estimated tax payment is due.
September 24: We need every last bit of your tax data! This time we really mean it!
October 15: Extended tax returns are due.
Of course we do our best to work on tax returns whenever we receive your data, but we may not be able to complete returns by IRS deadlines when data is received late. Auto Logs
Any deduction claimed for business use of an automobile is likely to be disallowed in an IRS audit unless you have kept records of the number of miles driven for business, the date, where you went and for what purpose. We would be happy to mail you auto logs for that purpose, or send you by email an Excel template that you can use to record business miles. To request either the auto log or Excel template, please call Dana, send her an email, or write your request on your appointment request. Billing Policy
We strive to be fair in our billing: fair to you, the client; fair to other clients that we are providing similar services to; fair to us, the professionals that are providing you with quality service. How much we bill for
each tax return depends on the complexity of the tax situation and time spent on the return. Your prior year fee can be a good indication of your 2011 fee. We will be happy to provide you with a fee quotation any time. Our minimum fee for a personal income tax return (1040) for 2011 is $500. Privacy
We respect your privacy. The personal, non-public information we collect about you has been derived from information that you have provided to us directly or indirectly and from transactions with us. We do not disclose personal information about you to anyone, except at your specific request, or as required by law.
Email Fraud Alert
We have noticed an increase in email fraud such as phishing scams. There are the emails that look like and purport to be from a government agency, for example, the IRS, but actually are people trying to commit fraud. Please be aware that the IRS does not initiate contact with taxpayers via email. For more information on phishing scams, go to http://www.irs.gov/privacy/article/0,,id=179820,00.html.
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