FAQ
Over the years we have
been asked many questions. Here are just a few that you might
have also.
Q. How long do I keep my
personal tax records?
A. The
Internal Revenue Service suggests 3 years from the due date of
the tax return or your actual filing date which ever is later.
However, we recommend that you retain your tax returns, W2s and
1099s for at least 7 years.
Q. How Long Should I Keep
My Business Tax Records?
A. Payroll
Tax returns should be kept indefinatley, Business Tax Returns
should keep at least for 10 years. Bank Statements and
cancelled checks, accounting journals and books keep for 7
years. Sales invoices, purchase expenses and routine office
correspondence keep for 5 years. Closing statements for the
purchase of warehouses, offices, equipment and vehicles, keep
for 4 years after the date of the sale of the asset.
Q. What is the standard
mileage rate?
A. The
standard mileage rate for business auto use is $.36/mile for
2003.
Q. Do I need to save all
my receipts if I Itemize my deductions?
A. YES! By
saving your receipts it helps us determine how much you spent
on certain items that are deductible. And should the IRS ever
question a deduction you will always have the proof.
Q. Should I refinance my
Mortgage if I have car loans, credit cards bills and other
payments.
A. YES!
Homeowners should refinance or take out a home equity loan. The
interest is deductible on Schedule 'A'. All other interest like
on car loans, credit cards or personal loans are not
deductible.
Q. Do I need receipts for
non cash charitable contributions?
A. YES! The
IRS allows a deduction of up to $500.00 without filing form
8283. However, most individuals lose out because the value of
these items usually are worth more than the $500.00.
Q. Can I get a deduction
for donating a car?
A. YES!
There are several agencies out there that will give you a
receipt for the book value for your car and you get that FULL
value as a deduction on Schedule 'A' if you can
itemize.
Q. Do I save taxes by
filing a separate return instead of jointly with my
spouse?
A. It
depends on your tax situation. Sometimes you may benefit from
filing separately instead of jointly but only if certain
criteria are met. One example would both spouse have similar
income and expenses but filing joint may cause certain of these
expenses to be limited, then filling separately maybe an
option. We always look at this filing separate issue for all
our clients.
Q. What do I do if I
receive a letter in the mail from the IRS or my
State?
A. First
don't panic, call our office and let us know you received a
letter. We will advise you what to do.