Boehm & Boehm, CPA’s 2017 Tax Preparation Checklist

Boehm & Boehm, CPA’s 2017 Tax Preparation Checklist

Lots of things have been changing recently — from Academy Award ratings (they’re down), to mortgage rates (which have been rising), to the effective tax rates for most businesses and families in 2018 (which, you may have heard, have changed!).

But we here at Boehm & Boehm, CPA haven’t much changed: we’re still cranking along in preparing your 2017 taxes, meeting with San Antonio clients, new and old, and helping you keep the most amount legally and ethically possible from the grasping hands of the IRS.

Already, we have many, many clients who have filed, have received refunds and have written us notes telling us that they’ve never been more pleased with their filing experience. And of course, this makes me happy, as you might imagine.Now, we know that waaay back in January, taxes were perhaps not on the forefront of your brain.

But, well, here we are in March … and we have six weeks remaining to get them filed and/or file for an extension on your behalf.

So, I sent this out in early January, but things are now a bit more “real”. Let’s get this stuff done. Chase down these docs, and let’s save you some!

Boehm & Boehm, CPA’s 2017 Tax Preparation Checklist
“Arriving at one goal is the starting point to another.” -John Dewey

With all of the changes every year (and, of course, that’s especially true THIS year), filing your taxes on your own is not for the faint of heart. That’s even with nice-looking softwares on the market which purport to make it easy for you.

But that’s what we’re here for. Let us be your easy button in San Antonio.

Below is a list of what you will need during the tax preparation process. Not all of them will apply to you — probably MOST will not. Nonetheless, it’s a useful tax preparation checklist.

Before you get overwhelmed: yes, this is a long list — but it’s the unfortunate reality of our tax code that it’s not even comprehensive! But these items will cover 95% of our San Antonio clients.  Really, this is for ensuring that we’re able to help you keep every dollar you can keep under our tax code.

Even if for some strange reason you won’t be using our cost-effective services this year, feel free to use this list as a handy guide…

Personal Data
Social Security Numbers (including spouse and children)
Child care provider tax I.D. or Social Security Number

Employment & Income Data
W-2 forms for this year
Tax refunds and unemployment compensation: Form 1099-G
Miscellaneous income including rent: Form 1099-MISC
Partnership and trust income
Pensions and annuities
Alimony received
Jury duty pay
Gambling and lottery winnings
Prizes and awards
Scholarships and fellowships
State and local income tax refunds
Unemployment compensation

Health Insurance Information: NOTE — despite the passage of tax reform that changes this information for 2018 taxes, we still need it for 2017 taxes.
* All 1095-A Forms from marketplace providers (if you purchased insurance through a Marketplace)
* Existing plan information (policy numbers, etc.)
* If claiming an exemption, your unique Exemption Certificate Number
* Records of credits and/or advance payments received from the Premium Tax Credit (if claiming)

Homeowner/Renter Data
Residential address(es) for this year
Mortgage interest: Form 1098
Sale of your home or other real estate: Form 1099-S
Second mortgage interest paid
Real estate taxes paid
Rent paid during tax year
Moving expenses

Financial Assets
Interest income statements: Form 1099-INT & 1099-OID
Dividend income statements: Form 1099-DIV
Proceeds from broker transactions: Form 1099-B
Retirement plan distribution: Form 1099-R
Capital gains or losses

Financial Liabilities
Auto loans and leases (account numbers and car value) if vehicle used for business
Student loan interest paid
Early withdrawal penalties on CDs and other fixed time deposits

Automobiles
Personal property tax information
Department of Motor Vehicles fees

Expenses
Gifts to charity (receipts for any single donations of $250 or more)
Unreimbursed expenses related to volunteer work
Unreimbursed expenses related to your job (travel expenses, entertainment, uniforms, union dues, subscriptions)
Investment expenses
Job-hunting expenses
Education expenses (tuition and fees)
Child care expenses
Medical Savings Accounts
Adoption expenses
Alimony paid
Tax return preparation expenses and fees

Self-Employment Data
Estimated tax vouchers for the current year
Self-employment tax
Self-employment SEP plans
Self-employed health insurance
K-1s on all partnerships
Receipts or documentation for business-related expenses
Farm income

Deduction Documents
State and local income taxes
IRA, Keogh and other retirement plan contributions
Medical expenses
Casualty or theft losses
Other miscellaneous deductions

We’re here to help. Let me know if you have any questions.

Warmly,

Jimmy Boehm
(210) 824-9691

Boehm & Boehm, CPA

3 More Reasons Why More San Antonio Families Don’t Have Estate Plans

3 More Reasons Why More San Antonio Families Don’t Have Estate Plans

The Winter Olympics are finished and we are fully immersed in our tax preparation process.

We’ve been enjoying the opportunity to reconnect with so many longtime friends from San Antonio who trust us with their most sensitive financial details — and we don’t take that privilege lightly.

And because I don’t take this lightly, I also want to take the opportunity to urge my San Antonio clients who have NOT prepared for every eventuality for their family to consider using this season as a time to take care of another significant financial “preparation” as well.

I wrote a little about this last week, and I’m wrapping up my thoughts on this particular topic here this week.

We’d be glad to help you and point you in the right direction for this process.

3 More Reasons Why More San Antonio Families Don’t Have Estate Plans
“You don’t choose your family. They are God’s gift to you, as you are to them.” -Desmond Tutu

Last week I wrote about a couple of the bad reasons some San Antonio families use to not do basic estate planning.

In fact, as of this writing, it’s a fact that almost 60% of Americans don’t have a basic will, and that’s a big problem.

Much of this is because of misconceptions about estate planning, and I dealt with two already:

1. “Only rich people prepare estate plans.”
2. “Everything goes to your spouse, if something happens.”

Well, I have three more for you to chew on, and dispense with.

Bad Reason 3. “After I create my will or living trust, there’s nothing else to think about.”
Well, if you follow this line of thinking, it could lead to a lot of problems. For instance, once you set up a trust, you need to re-title the assets you want to transfer to the trust. Otherwise, the trust doesn’t help a thing.

On top of that, families need to periodically update their will or trust to reflect major life events, such as a divorce or the birth of a child. You’ll also want to revisit your estate plan if you move to another state.

In fact, it’s a good idea to re-evaluate your plan every 3 or 4 years to make sure your plan is fully up-to-date.

Bad Reason 4. “If I have a will, my estate automatically won’t go through probate.”
Well, again — that’s not the case. In fact, ALL wills are subject to “probate”.  This is a process in which a court determines whether the document is actually valid and ensures that relatives and creditors are notified. This process can take several months and drain thousands of dollars from your estate.

So here’s one way to avoid that entirely–create that living trust. Essentially, a living trust is a legal document you create which holds property (such as brokerage accounts and real estate). When you die or are incapacitated, the property is smoothly transferred to your beneficiaries. This transfer occurs outside of the probate process, which saves a TON of hassle.

Not everyone needs one of these documents, but it’s something which you can’t paint over with a broad brush. Which is why it’s important to walk with a competent guide on these matters.

By the way, if you own property in more than one state, a living trust is a no-brainer. Going through probate in multiple states is a nightmare.

Another advantage to a living trust is privacy. A will is a public document, and anyone can come to the probate hearing to see if any fights break out. Living trusts aren’t published in any courthouse, so people can’t gain easy access to them. That’s quite nice.

Bad Reason 5. “I could be held responsible for a deceased parent’s debts.”
No, you’re not responsible for credit card debts from your parents.

In general, children aren’t responsible for a deceased parent’s debts, and in some cases spouses are often exempt as well. Again…you can’t paint it with a broad brush. But as a general rule, the estate is responsible for paying debts. If there isn’t enough in the estate to cover the amount owed, the debts usually go unpaid.

So really … there is no “great” reason to avoid this kind of planning. And it just so happens to be something that would make a great addition to your tax preparation process. So, let me know if you’re interested and we’ll help you get started on the right track.

Warmly,

Jimmy Boehm
(210) 824-9691

Boehm & Boehm, CPA

Estate Planning For Dummies: Two Estate Planning Myths Debunked For San Antonio Families

Estate Planning For Dummies: Two Estate Planning Myths Debunked For San Antonio Families

I’m not sure there is very much I could say that could add anything to the conversation about what happened last week in Parkland, FL. It seems that every time something like this happens, we grieve for shorter and shorter amounts of time and move on ever-more quickly to the shouting at each other over root causes.

But the fact remains that there are 17 families whose entire world has been decimated, and a community who is reeling. With the speed of social media these days, it’s easy to take this opportunity to make various points (many of them quite valid), but should we perhaps notice about ourselves and our culture that we seem to “move on” so very quickly?

I’d like to never become “numb” to such things. And so we pause to mourn with those families, even here in the midst of our San Antonio office’s busiest season.

In times like this, I’m grateful for the moments I’ve been given with my friends and my family … and I am reminded that everything can change in an instant.

It sure brings everything into its proper perspective, doesn’t it?

Events like this can never be planned for, but nor can many of the other kinds of disasters which tend to hit families at unexpected times. Whether financial, personal, occupational, or otherwise, disaster and tragedy *does* strike every family at some point.

But problems that can intensify the disaster are ones that *can* be planned around, and sometimes we just need a reminder and the right timing to get those plans handled…

Estate Planning For Dummies: Two Estate Planning Myths Debunked For San Antonio Families
In every conceivable manner, the family is the link to our past, the bridge to our future.” -Alex Haley

As we have seen this past week, life can turn on a dime … and we can’t plan for every one of the specific ways it may do so. But we CAN plan broadly.

For me and my family, we’ve put some simple plans in place for a VARIETY of circumstances, not just financial or legal. And it truly helps us sleep better at night, just knowing we have it all covered.

And the unfortunate reality is that the most recent numbers indicate that almost 60% of Americans don’t have a basic will — and that’s a big problem.

One of the big reasons that most San Antonio families don’t yet have this in place is because of some incorrect thinking about whether it’s right for them, or if it’s even necessary. And sure, some just haven’t gotten around to creating a will or trust. Others think they don’t need an estate plan because they’re not “rich”.

I’ve even heard from San Antonio people that they don’t want to put it in place because when they do, it’s sending some sort of death wish into the universe (or some such).

But here’s the big problem — if you continue without an estate plan, you could (instead) leave a legacy of bad feelings and attorneys’ fees.

Because it is currently “tax season”, this is something that might make sense to have done once your return is filed — simply because you would have already compiled your financial documents in such a way that creating an effective plan is a bit easier.

Or maybe you are still tripping up on these myths?

Myth 1. “Only rich people prepare estate plans.”
Do you own ANYTHING? Because if so, you need a will. You see, a will allows you to designate who will receive your San Antonio property should anything happen. Continuing without one ensures that your assets will be distributed under the terms of your state’s “intestate succession” laws. That means your money and property could end up with family members you haven’t spoken to in years, instead of who you’d really like to see control your assets.

I won’t go into all of the different components of a will, trust, health care directive, etc., as my purpose here is to emphasize that failing to plan is simply a decision to trust your assets to government bureaucrats.

Even if you think your situation is pretty straightforward, you may feel more comfortable hiring a San Antonio lawyer to guide you through the process.

Myth 2. Everything goes to your spouse, if something happens.
Unfortunately, that’s not always the case. We take care of San Antonio clients from different states around the country, and I can tell you that state laws vary; whether for taxes, estates, or anything else. And in most states, if you continue without a will (intestate), your inheritance will be divided among your spouse and your children. In New York, for example, when someone dies intestate, the spouse gets the first $50,000 of the estate and what’s left is divided 50-50 among the spouse and the children.

You can imagine how this could create all kinds of problems, particularly if your spouse was financially dependent on you or you have children from a previous marriage.

I’ll post a few more in the weeks ahead, but I hope you can already see that things are not always as we “think”.

I hope this helps. To your family’s financial and emotional peace…

Warmly,

Jimmy Boehm
(210) 824-9691

Boehm & Boehm, CPA  

2018 Tax Refunds Have You Confused? Jimmy Boehm Provides Clarity

2018 Tax Refunds Have You Confused? Jimmy Boehm Provides Clarity

We are cranking along with tax return preparation here at Boehm & Boehm, CPA, and there are some interesting things that you should know about from Tax Land (that wild, scintillating world that it is).

Look — it is our J-O-B to handle this junk so you don’t have to, which is why I make it a point to not be too tax-heavy in my notes to you. But this week, well, there’s just a few too many things to ignore.

Firstly, did you know the government “shut down” for a few hours Friday night? It was a function of the Congresspeople finally coming to a budget deal, and, well … it might mean some changes for YOU and many in San Antonio (and it might not).

Buried in the deal were a variety of tax credits that HAD been expired for 2017 taxes, but which were suddenly reinstated. If you want to get very, very wonky, you can see the full list right here (beginning at Section 40101) — but here are some high points:

  • above-the-line deduction for qualified tuition and related expenses
  • mortgage insurance premiums treated as qualified residence interest
  • exclusion from gross income of discharge of qualified principal residence indebtedness
  • credit for nonbusiness energy property
  • credit for residential energy property
  • credit for new qualified fuel cell motor vehicles
  • credit for alternative fuel vehicle refueling property
  • credit for 2-wheeled plug-in electric vehicles

Basically, San Antonio students, homeowners, and energy-savers got their breaks restored. If this affects you, we can amend your return if you would like to account for these breaks.

However, my suggestion is that we wait a bit to see how the IRS responds, because they don’t actually have full clarity about what they will be doing about them just yet. Shocking, I know.

But I don’t blame them, because this is pretty last-minute, even by Congressional standards.

Finally, I’m going to use my Note this week to clear up some confusion about tax refunds that have been the subject of a bunch of questions from San Antonio clients this year. Here’s what’s really happening…

2018 Tax Refunds Have You Confused? Jimmy Boehm Provides Clarity
“The truth can be funny but it’s not funny to cover up the truth.” -Ryan Cooper

Fake news is something we’re used to handling around here at Boehm & Boehm, CPA — you know the drill: “My neighbor’s uncle has a friend who is an accountant and HE said that my support parakeet is 100% deductible — and can even be counted twice!”

Yes, well … isn’t that precious.

Aside from those kinds of silly examples, there is some definite confusion about certain tax refunds this tax filing season, and we’re here to clear it up for you. Enough confusion, that the IRS issued a release about it (which you can read right here). I’ll deal with a few of those points, as well as a few other questions that we’ve received right here:

Confusion #1: Refund Delays
No, not every refund is delayed. Yes, EITC and ACTC related returns (both are child tax credits) WILL have delayed refunds. For every other kind of return in which a refund is expected, the IRS says that refunds should go out within 21 business days of filing. More about that below.

But about those EITC and ACTC refunds — unless you got some sort of advance on your refund, those might even take a little longer than was promised. The IRS said they will begin processing those on February 15th, but those refunds won’t begin to hit bank accounts until 2/27 — and that’s for those who chose direct deposit, and for whom there are no other issues.

So, hang tight.

Confusion #2: Checking On Refund Status
Have you heard that if you order a tax transcript it will tell you when to expect your refund?

Or if you call the IRS help hotline or ask US to call on your behalf that you’ll get a definite refund delivery date?

Whoops, more fake news. These social-media touted refund inquiry workarounds won’t work.

The information on a tax transcript does not necessarily reflect the amount or timing of a refund.

And as for calling us about it, we have no additional ways to check your refund status, unfortunately.

And sure, you can call the IRS directly … but be prepared to wait on hold for a looong time, and to receive no further information.

The BEST place to check, always is “Where’s My Refund” on the IRS website, which is right here: https://www.irs.gov/refunds

Confusion #3: “Is The IRS Calling Me???”
Short answer: No.

Longer answer: Nope.

Full answer: The IRS does NOT initiate contact with taxpayers by phone, email, text messages or social media to request your personal, tax or financial information.

If you are contacted in one of these ways regarding your refund — either a caller saying you owe more or an email promising a bigger refund — the communication isn’t from the IRS, even if the caller or emailer says they are agents. They are crooks looking to assume your tax identity and take your money.

Alright then. Glad we’ve cleared all of that up.

And in all seriousness: remember that we are in your corner. We’re here to help, and love to serve our San Antonio clients, so whatever advice you need, we’re just an email or phone call away.

To your family’s financial and emotional peace …

Warmly,

Jimmy Boehm
(210) 824-9691

Boehm & Boehm, CPA

5 Tips To Think More Clearly About Financial Decisions For San Antonio Taxpayers

5 Tips To Think More Clearly About Financial Decisions For San Antonio Taxpayers

Despite that title, it has, in fact, been a relatively smooth first week of tax filing here at Boehm & Boehm, CPA. San Antonio clients have been streaming through our doors, and we’ve been enjoying our little mini-reunion with so many longtime friends.

Now, there’s plenty to say about that Super Bowl, the advertisements (apparently, they’re all Tide ads), the halftime show, etc. But I’ll let others weigh in there. I’m a San Antonio tax professional after all.

But, given what happened with the stock market on Monday, I feel that I should make these quick financial points (which is closer to my area of expertise):

1) The Dow is not the economy. Good or bad.
2) Saving is almost always better than spending.
3) Fretting about the ups and downs of one market indicator will make you very tired. Don’t play that game.

Moving on, and somewhat relatedly, I posted a recent Note about retirement mistakes, and it stirred up some email responses, as well as conversation with clients in-person.

But it made me realize that in order to think clearly about retirement, taxes, or any kind of financial decision we need to be blunt with … ourselves.

That’s a difficult task, even for the best of us. But I have thoughts for you.

5 Tips To Think More Clearly About Financial Decisions For San Antonio Taxpayers
“Where you grew up has no bearing on where you decide you are going to be today.” – Dan Kennedy

Working with my San Antonio clients’ finances over the years has given me a bit of a crash course in human behavior. Often, I’m floored by the generosity I see displayed by many San Antonio clients — even those without significant means.

Other times … well, I think that we all could use the reminder that our human flaws show up very clearly in our family’s finances. The fact is that we ALL deceive ourselves, from time to time, about what’s really happening within our wallets.

This habit of self-deception threatens our financial stability. Instead of spending $10, we spend $30. Instead of recognizing that we *want* that new shirt, car, or fine dinner at a restaurant, we lie to ourselves until we are convinced that, for one reason or another, we *need* that new shirt, car, or fine dinner. The massive credit crunch a decade ago can partly be blamed on a nation full of people who convinced themselves that a $800,000 home was necessary — even though a $350,000 home was more than sufficient. We must learn to live within our income … and this sometimes means that we must stop lying.

So, I’ve compiled a short list of ideas on how to stop lying to ourselves, and to instead face the truth when making purchase decisions.

1. Have (and stick to) a budget. Is this purchase in my budget? For example, your family budgets a certain amount each month to spend on clothing. You’ve agreed that this amount is sufficient to meet your needs. So you set this amount before facing a purchase decision. If during the month you want to exceed the budget because Kohl’s is having a fantastic sale, then you are now lying to yourselves. You aren’t saving money by exceeding your budget during a sale. In fact, now you have to dip into savings to pay for your overspending.

2. Set a per-purchase spending limit. A wise man said, “The four most caring words for those we love are, ‘We can’t afford it.'” Take some time with your spouse to set what I call a “What I can spend without having to ask my spouse if it’s okay” spending limit. Some spouses have decided that neither one of them is allowed to spend more than $100 at any given time without calling and asking the other one if it’s okay (this does not apply to groceries). Let me tell you right now, these limits have stopped many from making a lot of unnecessary purchases.

3. Replace bad habits with enjoyable, inexpensive activities. Shopping or overspending is a habit that we have likely formed over years. Since our brains are programmed to react in a certain way in specific situations, any change is met by resistance. The existing habit is simply more comfortable and natural. To help change your behavior, replace the bad habit with another activity.

For example, instead of going to a San Antonio mall to pass time, go to a local park with a soccer ball and spend some time with family or friends. Start or re-start a hobby. Your new hobby might even be a low-cost home business in which you make money!

4. Make sure that the reason you tell yourself you are making the purchase and the *actual* reason you are making the purchase are the same. Ask yourself, “Why am I really making this purchase?” Am I buying this dress for my wife because I love her and want to show my appreciation, or am I trying to prove to her and the world that I am a good provider? We lie to ourselves to cover our true motives. If the real reason you are making a purchase isn’t in line with your principles and budget, then don’t buy it.

5. Take stock of, and enjoy, everything that you already have! Develop gratitude for what you already have in your life. Purchasing new things is often a sign of ingratitude for what life has already afforded us … or a sign that we feel deficient in some area.

Overcoming bad habits and addictions is a process that requires concerted effort. Face each day one at a time, and stop lying to yourself! Don’t believe the story you’ve created in your mind that justifies unnecessary and financially harmful purchases.

To your family’s financial and emotional peace …

Warmly,

Jimmy Boehm
(210) 824-9691

Boehm & Boehm, CPA

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