McDonald Carlson CPAs

02/12/2020

It’s a good idea to determine if you should file using the standard deduction or itemize your deductions. Deductions reduce the amount of taxable income when filing a federal income tax return.

You have a choice of either taking the standard deduction or itemized deductions and you can use the method that gives you the lower tax.

The standard deduction amount adjusts every year and can vary by filing status. The standard deduction amount depends on your filing status, whether you are 65 or older or blind, and whether another taxpayer can claim you as a dependent.

Standard Deductions:

Single or Married Filing Separately $12,200

Married Filing Jointly or Qualifying Widow(er) $24,400

Head of Household $18,350

Dependent filing own tax return $1,100

Additional deductions for non-itemizers

Over 65 or blind add $1,300

Over 65 and unmarried and not a surviving spouse or blind add $1,650

You may benefit by itemizing deductions for things that include:

• State and local income or sales taxes

• Real estate and personal property taxes

• Mortgage interest

• Mortgage insurance premiums

• Personal casualty and theft losses from a federally declared disaster

• Donations to a qualified charity

• Unreimbursed medical and dental expenses that exceed 7.5% of adjusted gross income

01/29/2020

If you are one of the many people who will be filing federal taxes for the first time this year, IRS Free File may be the perfect match, especially if you are looking to save money on tax preparation.
Most Free File users are under the age of 30 with modest incomes. The Free File adjusted gross income limit for 2020 is $69,000. If you want to do your own taxes, Free File means free tax preparation, free electronic filing and free direct deposit, which is the fastest way to get a refund.
Free File features 10 brand-name tax software providers who are in a partnership with the IRS to offer their online products for free. Each provider sets additional eligibility requirements, generally based on age, state residency and income.
Taxpayers using Free File software for the first time will need a few things before starting. You will need:

•Your Social Security number.

•Your wage and income information. This is usually found on forms from your employer such as Form W-2 and Form 1099.

•Make sure your parents are not claiming you as a dependent. If your parents are claiming you as a dependent you may still file a separate tax return, but make sure you indicate you are a dependent on another person’s return.

•Documentation for all tax credits and deductions. You should remember that the standard deduction has been greatly increased so that itemizing deductions may not be necessary

•Prior-year adjusted gross income. This is required for all electronic tax returns as part of the user’s electronic signature. First-time filers over the age of 16 can simply enter “0” as your prior-year income for signature purposes. If you have filed before, your prior-year tax return will show your adjusted gross income.

•Your bank account and routing number. Most people receive a tax refund. This is the fastest way to get your money; through direct deposit to a financial account.

01/20/2020

Looking for someone to help you file a tax return? Choose wisely. You are ultimately responsible for all the information on your return, no matter who prepares it.

Some Tips:

Use the "IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications." This tool helps find a preparer with specific qualifications.

Avoid preparers who base fees on a percentage of the refund or boast about bigger refunds than the competition.

The quickest way for you to get your refund is to e-File your return and choose direct deposit.

You may want to contact the preparer after April 15th so make sure they will be available.

Good preparers ask to see records and receipts and ask questions to figure your total income, deductions and credits.

Never sign a blank return.

Review, ask questions, and feel comfortable with the accuracy of your tax return. Once you sign the return you are accepting responsibility for it.

Make sure that your refund goes directly to you and not to the preparer’s bank account. Review the routing and bank account number on the completed return.

By law, all paid tax preparers must have a Preparer Tax Identification Number (PTIN) and sign tax returns.

Report Abusive Tax Preparers to the IRS on Form 14157

01/14/2020

We are very excited about our new address:
2020 Hogback Rd., Suite 18
Ann Arbor, MI 48105

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Thank you to friends and clients for your referrals. We appreciate your business and referrals.

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