(For Businesses & Individuals)
1) First Login to your account found on the home page of our website using the login and password from the email sent to you from ShareFile. If you didn't receive the email first check your Junk/Spam folder. If you still didn't receive it contact our office and we will resend.
2) Download the file named "2011 Your Name Tax Packet". You can read this file using Adobe Reader which is free. You can not fill out the packet using Adobe Reader so you will need to print it out.
3) After printing, READ THE ENGAGEMENT LETTER thoroughly. You must then initial all spaces and sign the last page. If you are married BOTH SPOUSES MUST SIGN. Both of you should fully understand what is required and your responsibility for the information provided for the return.
4) Optional-Make an appointment. If you would like to make an in-person appointment with Gayle, refer to the Calendar of Office Hours for available dates found in your tax packet. Call our office at 602-795-0404 or email info@simmonstax.com to schedule an appointment. We ask that the email to gayle@simmonstax.com is used for tax questions and sending attachments only. You do NOT have to make an appointment if you don't want to and know that when your tax return is done, Gayle will call you with the results and you can discuss any questions you may have.
5) Fill out the organizer. You MUST complete the questionnaire and sign the organizer. If married BOTH SPOUSES MUST SIGN. We will send back the questionnaire if any questions are not answered. If the question isn't applicable to you then indicate with "n/a". If you don't understand the question answer it to the best of your ability and we can go over it together. If you have already included a tax document such as a W-2 then it's up to you if you want to enter the information in the organizer.
6) Gather your tax documents. Even though you have filled out the organizer we still require back up to your information. Include your W-2's, 1099's, 1098 Mortgage interest, receipt for car tags, charity receipts, school credit receipts, dependent care, etc.
7) Return all of the documents to Simmons Tax. Once you have completed the tax packet you may return the information by any of the following methods:
* Scan & upload the documents back to your account. We will be automatically notified.
* Fax to us at 602-795-0416.
* Email to us but a reminder that email is not secure.
* Drop off at our office located at 11811 N Tatum Blvd, Ste 3031. (Leave at front desk)
* Bring with you if you made an appointment with Gayle in person.
Does this feel like your tax return?
Let us help you take advantage of your legal tax deductions!
Tax Tips
What type of Entity Should You Be?
That is a question that shouldn't have a “blanket” answer. Many business owners may automatically go to an S Corporation without realizing the additional maintenance that goes along with it. The primary reason an S Corporation is set up is to save on payroll taxes but tax law specifically states that if you are an S Corporation you must pay a reasonable salary to all working shareholders. If your business is showing taxable income equal to what a reasonable salary in your industry is then you may be better off to stay as a sole proprietor with protection through an LLC (Limited Liability Company). With payroll comes a reporting obligation that can be very time consuming or additional costs if you hire a payroll service. On top of that you now will owe unemployment taxes for both Federal and State which you would not owe if you were a sole proprietor LLC.
What is this LLC I Keep Hearing About?
An LLC is a Limited Liability Company which is set up through a states Corporation Commission or Secretary of State depending on the state. In Arizona, all corporations and LLC's are set up through the Arizona Corporation Commission.
I hear many times from business owners that they think that an LLC has it's own tax rates and forms but an LLC is a legal shell with the flexibility to be taxed as a sole proprietor, partnership, S Corporation, or C Corporation. When the LLC is set up and a tax identification is acquired, that is when the tax status is set up. If no election is made then an LLC defaults to a partnership. The biggest mistake I see from the “do-it-yourselfer's” is they don't specifically identify the LLC as a single member which then defaults the LLC to be taxed like a partnership. If there is only one owner, by definition the LLC can not be a partnership. It is easy to correct with a letter to the IRS explaining the error but it costs less to do it correctly the first time.
Selling Your Home?
If you are selling your primary residence you have up to $250,000 of an exclusion on the net gain and a $500,000 exclusion if you are married. To qualify for the full exclusion amount you must have lived in your house 2 out of the previous 5 years from the date of sale. What if you had to move prior to two years? You may still be eligible for a portion of the exclusion. Call our office to see if you may still be eligible.
Business Deductions
Are you eligible for a home office deduction? It should be your primary place of doing business and there must be an exclusive location in your home where you conduct this business. Expenses that may be deducted are utilities, HOA fees, mortgage interest, real estate taxes, insurance, and depreciation. Give us a call if you are uncertain if you qualify.
Business Owners, this is for you
It is a filing requirement of all business owners (sole proprietors included) to provide their vendors with a Form 1099-MISC with total annual payments of $600 and greater. Vendors who are C Corporations, S Corporations, government entities, non-profits, and state schools do NOT receive Form 1099-MISC but you may not know what type of entity your vendors are. This is where it is important to have your vendors complete Form W-9 (link to form below) to protect you in case of an audit. This form asks for the vendor’s legal name, tax identification number, and their legal entity status. Don’t forget about your landlord. Most rental real estate is not owned by C and S Corporations and don’t think that just because an entity is an LLC it is exempt from receiving a Form 1099-MISC. In many cases an LLC is treated like a sole proprietor or a partnership which do receive Form 1099-MISC.
http://www.irs.gov/pub/irs-pdf/fw9.pdf
What if you don’t file your 1099-MISC’s? There is a $50 penalty for each missing or incorrect Form 1099-MISC. You may think that’s not so bad but you could also be liable for backup withholding of 28%. If your vendor refuses to provide you with the correct information to complete Form 1099-MISC it is your responsibility to withhold 28% of each payment and submit it to the IRS. One suggestion is to hold on to their first payment until you receive a completed Form W-9. Vendors will cooperate if they know their income depends on it.
For our bookkeeping clients, we are happy to prepare your 1099’s again this year. We ask that if you haven’t already given us verbal authorization to prepare your 1099’s to please respond to this newsletter stating you would like for us to prepare them again. If you have any new vendors, you will need to obtain their information for us.
Business owners don’t forget to update your company minutes. This could actually serve as substantiation for deductions if an auditor suspects that a transaction was done with the intention to avoid tax or a shareholder loan was just to take money from the company. You must still make decisions for the good of the company and not just for saving taxes.
Keep good books and don’t co-mingle your funds! This allows you to take advantage of all of your business deductions and have better substantiation that they are truly for business. Two court cases have emphasized the long standing rule that the burden of proof when challenged by the IRS is the taxpayer's. The IRS agent is entitled not to take the taxpayer's word for deductions. Supporting documents are required.
Keep your personal transactions away from business accounts as this could give an auditor a reason to disregard any expenses that he/she thinks is questionable in nature. Reconcile your bank accounts and credit card accounts. When you miss deductions it affects your bottom line. Understate income and you’re in trouble with the IRS. I don’t recommend either one.