
2/8Tax Partners Budgetax 2013 Client Newsletter 2



If you owe taxes the IRS will collect. An extension

is not an extension to pay your taxes, just an extension to pay. Not filing and not paying can

compound the liability, not reduce it. You will penalized by IRS for both not filing and not paying.

The combined penalties can be as much as 25% of the tax liability. There is a solution if you

cannot pay your tax liability. IRS allows us to set up a payment plan at the time we file your

income tax return. Most liabilities can be paid over time. They do charge interest. We have the

forms and file the payment plan request right with your return. Although the payment plan

request is subject to approval, we have found that most reasonable proposals are accepted as

filed.

If youre expecting a refund, orlooking for ways to reduce yourliability, here are the quicksimple steps you need to follow.

1. Personalized organizer

2. W2 and other income form

3. Investment income

4. Credits

5. Deductions



Whether you areborrowing money, cantfind the paper copy of

your return, applying forfinancial aid or anyother reason you willsometimes need a copyof your tax return.

This year we areoffering a solution togetting you a copy ofyour tax return, securely,easily, and efficiently.Please take advantageof our free PortalSafe

online file sharingsystem.

PortalSafe is a securealternative to high-riskdelivery methods suchas e-mail, fax and snailmail.

It is available 24 hoursa day. It is compliantwith all the new privacyrules. And it is includedwith our tax preparationservice.

Simply call our officeanytime and we willupload your taxinformation to your ownsecure private filecabinet. Even we cantopen it. We will emailyou when everything isavailable. You can

forward that informationto your banker ordownload you copy athome.



In an effort to stem what is called earned income credit fraud the IRS has imposed new rules for all tax preparersconcerning the way we gather information and calculate the credit.

Granted the fraud figures are rather staggering. An estimated 27 to 32 percent of all earned-income-credit dollarsclaimed are fraudulent according to GAO figures. That translates into $11.6 billion, by far the highest amount offraud in any government entitlement program. IRS has placed additional burden and record keeping requirementsfor your tax preparer, and it changes things dramatically. We are required to take extra steps to make sure that wedocument that you are entitled to claim the earned income credit. Please be prepared to provide us with additionalpaperwork.

In addition, we must maintain a copy of records that indicate that any child claimed for earned income credit lived inyour household. Such records that IRS suggest we keep a copy of include:

School records or statements;

Landlord or property management statement; Health care provider statement; Medical records; Child care provider records; Placement agency statement; Social services records or statements; Place of worship statement; Indian tribal official statement; Employer statement;

You dont need to have all of these things, but youll need at least one thing to prove that your child lives in yourhouse. The school records are probably the easiest if your child is of school age.

If you are claiming a disabled child, youll need to prove the disability. Here are the documents for that:

Doctor statement Other health care provider statement Social services agency or program statement

If you are self-employed, additional records are required. Youre going to need to prove that you really have somesort of business with the following records:

Business license 1099 MISC forms Records of gross receiptsI Income summary Expense summary Bank statements

These records are pretty standard for anyone who is self-employed so this shouldnt be a burden. Bottom line hereisif you have a business, you need to run it like a business and keep proper business records.



Here is some tips to help you prepare for your taxes.

Being in business means you must follow special tax laws and special requirements concerning record keepingin order to prepare your tax return. The IRS does not specify a specific way to keep your business records.According to the IRS, you may choose any record keeping system suited to your business that clearly shows

your income and expenses. Except in a few cases, the law does not require any special kind of records.Whatever system you choose, in all cases, you are required to accurately report your taxable income.

In every case, whether you are reporting rental or self-employment income, each IRS form requires you tosummarize your income, detail your expenses, and calculate your net profit or loss. The amount of incomeand expenses should reflect the entire year. There are certain rules for certain deductions. Some entertainmentdeductions are not fully deductible and others are. Auto expenses can be deducted in a variety of ways. Someexpenses, such as penalties and fines are not deductible. And finally some capital purchases such as buildings,improvements, computers and vehicles may be fully deductible or may require a depreciation calculation. Inevery case you can rely upon our experience and education to make sure that we accurately report yourbusiness deductions while still achieving a mutual goal of calculating the lowest tax liability allowed by law.

Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense forsomething that is used partly for business and partly for personal purposes, divide the total cost between thebusiness and personal parts. You can deduct the business part. For example, if you borrow money and use 70%of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a businessexpense. The remaining 30% is personal interest and is not deductible.

Do you operate your business out of your home office? Although the home office deduction has a stigmaattached to it....I wish I had a dollar for every time a client told me that they didnt want to take the deductionbecause it was a red flag In 2013 the IRS has issued a simplifiedmethod for small business owners, such as you, how to take the home office deduction using a standard rate.So much for the red flag. Home office deductions are extremely valuable deductions and should not beoverlooked. Again we are here to help. We can help you calculate your home office deduction.

Clear as mud?

Taxes are one of the most important issues facing small and growing businesses. And like a company's profits,its annual tax bill will in part reflect the owner's skills and knowledge. Business owners need to be sure that theyare meeting all of their responsibilities to the tax man and also seizing every opportunity to reduce their taxes.

For more than 32 years we have been the small business accountants. We encourage you to call our officeand meet with one of our tax professionals. During this no-cost, no-obligation meeting we can show you howwe can put our experience to work for you.



Tax Partner Holdings2060 W Monroe

Springfield IL 62704,

Phone: 217-241-4597Fax: 217-789-9827

[email protected]

We are more than a tax preparation service. Even moreservices from your trusted tax guys.

If you need live local resources, answers to thenew healthcare law, we are here to help at no charge.

Our staffcan help you reduce your property tax bill on a contingent basis. Good stuff.

3 Each year we help clientsjust like you reduce tax liability by helping them act on common sense, legal taxreduction plans.

4 Whether you are refinancing your home, or applying fora new mortgage, or any other reason, as long as you are an active client we willprovide you a copy of any tax return at no charge. See page four.

5 Dealing with the largest most feared collectionagency in the world, the IRS, daily. We literally have change peoples lives bysolving the unsolvable. We have the skill sets government tax agencies require.

6 If you own a business you need toaccept credit and debit cards. Our trusted advisor programs saves you money.

CONTACT US ANYTIMEWE ARE OPEN YEAR ROUND

Phone: 217-241-4597

Fax: 217-789-9827

www.1taxes.com

B e t t e r V a l u e i n c o m e t a x s e r v i c e s

IMPORTANT TAX INFORMATION ENCLOSED

2013 tax partners tax guide

Documents