My CPA Tips


TIME FOR AN EXTENSION?

Extension TimeDid your refund or what you had to pay disappoint you last year? Did you file at the last minute and slave over getting everything ready? Even if you haven’t planned for your 2017 taxes it’s not too late. However, don’t be tempted to go to the tax buddy in the booth or do a quick job on software at the last minute. Better to see a professional who works on taxes full-time. Corporate returns are due on March 15 and personal returns on April 17. That is just weeks away and many CPA's and tax preparers are booked up already getting their current clients’ returns ready. As tax-days tick closer and closer, you can be proactive. Contact a CPA to help with your tax return and file an extension. In the end, paying for the extension and late fee may be much less than if you miss significant deductions. With the tax law becoming increasingly complex, wise folks rely on an accountant or a CPA. Les Merritt, CPA, is ready to help with your taxes. Let Les work with you to prepare your taxes and extensions if necessary.  If you need for an extension, you can trust Les Merritt to file it, then do a thorough job on your return, so you can file as early as possible after the deadline.  Call Les today (919) 269-8553 to make an appointment. You’ll be glad you did.

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RED FLAGS FOR AN AUDIT

Storm warning flags on beach. Baga, Goa, IndiaThere are a number of indicators on a tax return that can trigger an audit. One of the best reasons to use CPAs to do your taxes is that they are aware of most of these. No one wants to be audited. In 2016 only.7% of individual and .8% of small business returns were audited. These are small percentages so most of us do not get audited. The chances of being audited for those who make $1,000,000 or more a year range from 2.06% to 18.7%. A few things auditors look for in tax return are mathematical mistakes, charitable gift amounts that are based on purchase price rather than current value, non-qualifying home office deductions and driving-related costs. You might be surprised at some of the legitimate deductions you can take but knowing about them is necessary to take advantage. How can you determine what deductions are allowed? You can read the tax code for 2017 which is reported to be between 2,600 and 70,000 pages (depending on what is included in the count) OR you can use a CPA to prepare your taxes. Your preparer should make it his business to keep up with the current tax codes and changes. If you have not yet started preparing your return, give Les Merritt, CPA, a call at (919) 269-8553 to make an appointment. Since it is getting close to the deadline, you may have to file for an extension, but feeling secure that your taxes have been prepared correctly should make you more comfortable. Avoiding the red flags for an audit could make your life easy after you have filed. Be sure to contact Les Merritt and get your taxes done claiming all the legitimate deductions and no more. The audit you save may be your own.

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TIME FLIES, 9 WEEKS LEFT

Here we Time Fliesare in the third week of February and many corporate tax returns are due in five weeks; personal returns in nine weeks. How time flies in this new year! If you haven’t started working with an accountant, you may not be able to get these in on time and may need to file for an extension. This year April 15th falls on a Sunday so you have until the 17th to file your personal returns. Corporate returns are due March 15th.  Hopefully you are well on the way to organizing your paperwork for your accountant or CPA and have set a meeting to deliver it to him or her. Congratulations to the early birds, who have already filed and have taxes behind them. If you are not going to be able to meet these deadlines you will need to have your preparer file for an extension before the due dates. This will give you and your accountant time to get your returns ready, but you will pay a late penalty based on a calculation of when your return is received. If you have been procrastinating on your taxes, this is a good time to start acting. The time is growing short and you will need to contact someone to help you sooner rather than later. Les Merritt has been helping families and businesses prepare their returns for over 30 years and will work to save you money by taking all allowable deductions. Every year there are changes to the tax code and a number of them were enacted in 2017. As we know, there are significant changes that will take place this year and impact your 2018 returns. Getting ready for 2018 and those changes will take preparation and Les can help you plot the best course through those fluctuations. Pre-planning for the future can save stress and money. Contact Les Merritt at (919) 269-8553 to schedule an appointment and make sure you are ready with your returns for 2017 and know what actions to take to take advantage of changes in 2018.

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GROUNDHOG DAY AND TAXES

PhilLooks like another six weeks of winter. Punxsutawney Phil saw his shadow, so no early Spring. So what do groundhog day and taxes have to do with each other? Unlike the characters in the Groundhog movie, you can avoid waking up each morning dreading that your taxes have not been prepared if you take steps today. Many Americans peak out like Phil did this morning, then dive back into a hole and procrastinate about taxes. Then each morning, the tax task may loom large and spoil the sunrise. However, as soon as you have arranged to have your taxes done and begun collecting the necessary documents, you step lightly even if the temperatures have not yet thawed. You will need your personal data, income data, self-employment data, expenses, financial liabilities and homeowner or rental data. Your personal data includes last year’s returns and all relevant social security numbers as well as other information. For employment and income data gather together W2 forms, 1099’s, interest income, dividend incomes, and state refunds just to name a few of the necessary items. For those who are self-employed, business income, schedule K-1, business expenses, business mileage and health insurance expenses are a few of the necessary documents. Expenses might include college tuition, expenses related to volunteer work, job hunting costs and others. Among the documents related to financial liabilities you might need information about auto loans or leases for vehicles used for business and student loans. Homeowner and rental information includes but is not limited to mortgage interest information, real estate taxes and moving expenses. These examples are not inclusive, so you might want to contact your CPA for a complete list of what you need customized for your situation. By collecting all this paperwork, you will make your job easier as well as that of your preparation professional. Do something soon since it is already February and you don’t want tax preparation hanging over your head into April. Les Merritt, CPA, prepares tax returns for individuals and companies and had done so for decades in North Carolina. He can help you reduce your bill or increase your refund by finding all your legitimate deductions. Call his offices today at (919) 269-8553 to schedule an appointment and make sure you are ready even if we have an added six months of winter weather.

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