Opinion Pieces

A common question tax professionals receive is "what tax documents do you need?"  We have compiled a short list of items that are needed.  As preparation moves along, however, additional documents may be needed.

1. Prior three years tax returns.  Our firm starts with the first year, and requests additional as needed.

2. Copy of the taxpayer's Driver License, or any other form of identification.

3. Did you buy, dispose, or hold any cryptocurrency?

4. Any and all tax forms received for the tax year that is being prepared (W-2, 1099-R, Schedule K(s), etc.)

5. Did you have or maintain a bank account in a foreign country?  If so, the date of the highest bank balance for the tax year.  Also, the financial instituion, bank address, account number.  This is required to properly fill out Form Fincen 114.

6. Did you sell or buy a house?  Closing settlement sheet is needed.

7. A smile and less stress.  We know taxes, let us take the burden of filing away from you.

This article only covers the small $300 above the line charitable deduction. I have been wanting to write on this item as early as the first return I filed this year. Why? Because what government would be unwise to remove a small $300 above the line deduction that:

1. Helps nonprofits receive more donations 

2. "May" help those who would need those donations

To be fair here, the above the line deduction was for tax years 2020 and 2021 and for taxpayers who only itemized. Prior, charitable contributions were deducted if the taxpayer itemized (and were subject to limitations).

*I use the word “May” because some nonprofits use donated funds to pay salaries, expenses, etc. Nothing is free in this country. 

Tax years 2020 and 2021:

Single filer taxpayers were able to claim a $300 above the line charitable contribution(s), thereby reducing the taxpayer’s taxable income (Line 12b of 2021 Form 1040). Married Filing Jointly taxpayers were able to claim a $600 above the line charitable contribution(s).

Tax year 2022:

For 2022, line 12b of 2022 Form 1040 was removed due to Congress not renewing the particular tax provision. So, we should ask ourselves, why? I don’t have that answer. But, fact is a fact and a truth is a truth. Fact and Truth – taxpayers are no longer able to reduce their taxable income by $300 (Single) or $600 (Married Filing Jointly). 

My opinion:

I don’t think they should have removed this key deduction. To play devil’s advocate, we could possibly argue to remove in order to increase tax revenue and pull our country out of debt (ie: remove tax savings - which increases taxes – use increase of taxes to reduce debt). 

However, I would argue, this would not be the case. When was the last time the IRS was audited? When was the last time our government reduced their spending and stuck with an actual budget? We all know the answers to these questions, because, yet again, they will most likely increase the debt ceiling. 

Approximate US National Debt – OVER 31 TRILLION DOLLARS

When I was a young lad I often heard the phrase “No taxation without representation.” 

There is some truth to that.

  Taxes, oh taxes! 

What we hate paying.

They say we need it,

They say we pay it.

But how much is too much?

Where is their budget,

Or audit controls?

When you come up short,

They love to tack on their penalties and interest.

Shouldn't they charge themselves,

When their spending is over their budget?

Guilty until proven innocent,

In the tax courts these days.

How do you fight a judge & jury,

Who’s the prosecution as well.

Seems a little one sided to me.

The only way, ethical way

Is through tax law they made

And use that code

To be a smart tax preparer, I say.

Only then, will you…

Pay less taxes,

Have more money,

And leave that tax man,

To knock on someone else’s door.

It is not against the law to use the tax code to build a solid foundation, so all required taxes and returns are filed timely in accordance with said tax law.  You should always be consistent and compliant in any tax filing. 

*Let’s see how the tax judgement plays regarding a particular circumstance. If no tax or jail time is owed, then that may give legal precedent to any clients who may owe back taxes. Why give an exception to one person, but change that rule when it comes to individuals who may not have influential people in your corner?

As you can tell, our firm loves preparing and filing taxes (we even made a poem about taxes).  Contact us today, we treat all our customers the same and will help to the best of our ability.

The year was 1862, a war was waging in the United States, and our country was severely divided. Picture this, soldiers marching miles upon miles across our great country. No cars or motorcycles, strictly marching or horse riding through blood torn battle fields. They had to weather storms, snow, frigid temperatures and hostile humidity. Not only that, States fought other States. You had countrymen from Pennsylvania, fighting countrymen from Arkansas. You had countrymen from Main, fighting countrymen from North Carolina. 

Now, take that picture and slam a tax in it. That is exactly what President Lincoln did. He was the first President to enact a tax. The tax was 3% on income between $600 and $10,000 and a 5% tax on more than $10,000.

*Ironic isn’t it – war is what started income taxes.  

This is where we stop for the current history lesson. Our firm will delve into more historical tax dates via a series of opinion pieces.  We want to examine history to see if citizens are allegedly taxed too much (which, if we remember, is why individuals allegedly left England in the first place).

Now, lets try to understand why the original tax was created in 1862. Our country was divided, North vs. South (I had ancestors fight on both sides – which many of your ancestors did as well), two sides trying to finance a war against each other. And how are wars financed? Taxes. So, if you want to give a big thank you to the first President who decided to tax your income, thank President Lincoln. Take a look at the United States now, we realize the same tax revenue services the Department of Defense (amongst other things). In my opinion, I am okay with that type of taxation if it’s used for that type of spending. Please keep in mind, that is my opinion and I realize our tax revenue is used for a lot of other spending (sometimes useless). 

Our firm would like to leave you with a question to ponder, would you love to see a similar tax structure? 

For instance:

3% tax on earned income up to $10,000

5% tax on earned income over $10,000

I bet the desire would be no income tax on earned income (even though that would abolish my company). No tax, no need for tax preparers. But, it would save citizens a lot of money and I would only need to get a new job (which I would be okay with if all of us didn’t have to pay tax). 

Can you imagine only being taxed at a rate of 5%? If our government allegedly knew what a budget was, it may occur.

4/15, oh what a date,

Some say, it isn’t a saint.

Stressful it is, 

Most even hate.

Then there’s us nerds

Who love, this unique date.

It tests our limits,

Builds our knowledge.

But, wait, oh wait, 

Didn’t you know.

Our job doesn’t end

After 4/15 dear friend.

There’s extensions,

The race continues on,
As leaves are changing,

Just know….

We will be sitting

Sometimes standing

To meet that 10/15 finish line.

Cause, we love the challenge

As you can see,

To help you win that race.

So contact us today,

Don’t be afraid.

We won’t bite

As most would say.

  Tax season ended

On October 16th this year,

Seems like it flew,

Oh man! What a toll.

We crunched numbers,

Day in and day out.

With very little relief,

It almost became to taxing!

The end did come,

Like every tax season before.

This was just another,

That hit us at the core.

We mustered, we fought,

We worked our brains off.

To help others file

And stick to the law.

All the days and nights,

Each year we ponder,

Did we do all-right?

Did we do good by our clients?

Tax preparers are a rare breed,

Just like all those who work.

Except we make sure,

Taxes are filed and right.

Now where do we go?

What do we do?

Let us show you,

That we don’t stop now.

For two months,

Starting October 17th,

We start a dance,

To muster up estimates.

Its crunching 2023 numbers,

Until December 31st.

Or making maneuvers,

Like a striker on a pitch.

To give a foothold,

So when April comes,

You won’t be stuck 

Holding the tax bags again.

So reach out and ask,

Reach out and talk,

We answer the call,

For any tax problem that falls.

Please listen to our first audio interview - Expected by the middle of November.  Bringing real life interviews about taxes and finance with ordinary people.