Frequently Asked Questions

A. Uncle Sam requires you to maintain records that support the amounts you claim on your tax return. Generally, you should keep your records for the 3 most recent years of Tax filings. 

 A.  You can sell your personal residence and make a tax-freee profit of up to $250,000 if single or up to $500,000 for couples. To qualify, you must have lived in the property for at least two of the last five years. . 

  A. In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.  If you filed your 2019 or 2018 tax return but did not receive your refund by direct deposit, your Payment will be mailed to the address we have on file even if you. This is generally the address on your most recent tax return or as updated through the United States Postal Service (USPS). To update your address with USPS click here. 

 A.   Self-employed individuals must pay their Estimated Quarterly Payments to the I.R.S. and State on time to avoid penalties. go to www.eftps.gov for IRS payments and www.ftb.ca.gov for state payments.  

A.  In our experience there are four types of taxpayers

1. The Owing Taxpayer – This taxpayer wants to owe at least $1,000 on their tax return because they can’t stand the thought of the federal government keeping one extra dollar of theirs during the year.
2. The Break-even Taxpayer – This taxpayer would love if their refund and amount owed were both $0. The financial experts recommend you strive for this. However, tax laws and deductions are always changing and it’s easy to find yourself either owing $500 or getting a refund of $500. This taxpayer is comfortable with either outcome.
3. The Buffer Taxpayer – This taxpayer says they “want to break even” but what they really mean is they want their bank account to at least break even, which means they really just don’t want to have to pay. They’re aware that their refund could be $0, or it could be $2,000. As long as the outcome is- they don’t have to write a check, they’re happy.
4. The Big Refund Taxpayer – This taxpayer uses their tax refund as a quasi-savings account. They know they pay too much federal income tax withholding from their paychecks, but they use that large refund amount to take trips, buy necessary household appliances, vehicles, etc.

Which of these taxpayers is right? The answer is any of them. They each make decisions for themselves and accept the outcome. Which taxpayer are you? Is that where you want to be or if you could choose would you be in a different group? You can choose, and our tax professionals can help you!

A.  Filing statuses are actually quite rigid, there is not nearly as much flexibility in which status to choose as many people would have you believe. If you are married by Dec 31st of the previous year, then you only have two options. Married Filing Joint or Married Filing Separate. I cannot begin to tell you the amount of times friends, families, attorneys or even divorce decrees give incorrect information in regard to filing statuses. If you are married, you absolutely cannot file two separate returns as Head of Household and Single respectively. You may file Married Filing Separate, but that comes with some potential downsides. Before making a decision on how to file, you should consult with a competent tax professional. 

A. Before reaching out to the IRS, please be aware that call volumes are currently high, and you may experience long wait times to speak with a representative. To get started, call 800-829-1040 to contact the tax agency regarding any tax-related issues you're facing. Have the following information ready to verify your identification:

• Your Social Security number or Individual Taxpayer Identification Number
• Your birthdate
• Filing status: single, head of household, married filing joint, or married filing separate

 A.  This one depends on many factors, but generally the answer is $0. The maintenance, repairs, renovations and improvements on your primary residence are almost never deductible. That doesn’t mean they won’t help you in the long run, but you cannot write them off as an itemized deduction on your tax return. Instead, the amounts are used to increase your basis in your home. Basis is a running calculation to determine what you’ve paid for your home. In some cases, how much you’ve paid for your home, both the original purchase price and the improvements you’ve made to the home since you bought it, can be used to reduce capital gains tax on the sale of the home. Basis also matters for many other cases, such as the 2017 Hurricane Harvey Safe Harbor calculations.