Do you speak “Accountantese?”

Here’s a classic joke that has circulated throughout the accounting community for years:

Question: “What’s the definition of an Accountant?”

Answer: “Someone who solves a problem you didn’t know you had in a way you don’t understand.”

Sadly, all too often, the reputation Accountants have of being obtuse and/or unable or unwilling to clearly explain WHY they take the actions they do on behalf of their clients is well-deserved.  Ours is not exactly the most personable occupation, and as a result, clients frequently lack even the most basic understanding of their tax return.

Frankly, I believe that you deserve better.  Our finances are a vital component of our lives, and if you don’t understand how your tax bill is calculated, then you miss out on valuable information that could help you move yourself and your family forward further and faster.

Because of this, I don’t believe that my job is done until my clients understand how all the pieces of their tax return come together, impact upon one another, and lead us to our final result.  I take pride in making the U.S. Tax Code accessible, and feel that to let a client leave my office confused is to let them down.

I hope that whatever Tax Professional you are working with holds you in such regard.  If it is me, and I am delivering on the above promise, please let me know (we all like positive reinforcement!)  If it is me, and you feel that I have fallen short of my goal, please let me know that too.  And if you are working with someone else, and they fit the stereotype of the unengaging beancounter, then perhaps you should ask yourself if you don’t deserve better.

As we go into the weekend, I wish you much fun and frolic.  I’ll “see” you here on Monday!

Steven

Does anyone need $2500.00?

Folks, I think I’ve got some GOOD insurance-related news!

While the debate over Health Care Reform continues to rage, I’d like to share with you some good news about one of those many other insurances we all get to pay — namely, our Homeowner’s Insurance.

The State of South Carolina has a little-known credit called the “Excess Insurance Premium Credit.”  In a nutshell, it says that if the total property and casualty insurance (hazard, fire, flood, wind/hail, etc.) you pay on your Primary Residence is greater than 5% of your AGI (Adjusted Gross Income), you can take a credit for up to $1250.00 of the excess on your SC State Return.  And remember folks, credits are MUCH better than deductions, because they result in a dollar-for-dollar tax savings.

This is a retroactive credit, so both the 2007 and 2008 returns can be amended, and if you aren’t able to use the entire credit you qualify for, you can carry the unused portion forward for up to 5 years.

The bad news is that most South Carolina residents won’t qualify for the credit.  But most of the ones who do qualify live along the coast which, coincidentally, is where Charleston Tax Masters is located!  I have no illusions that the SC State General Assembly passed this credit just so I could look good in front of my clients, but I thank them for it just the same!

So, if you think that the property taxes you pay on your home are excessive in relation to your income, we should probably have a chat.  Just shoot me an email and we’ll figure out a game plan, and who knows — maybe we can find a way to put a few “found” dollars in your pocket! 

Until next time…….

Steven

Strange Bedfellows

Hello Everyone!  Here’s a trivia question for you: What do the IRS, a dancing baby, and Britney Spears all have in common?

Give up?

Ok, here’s the answer: they are all on YouTube!

That’s right — the Internal Revenue Service (an agency rarely thought of for cutting-edge initiatives) has finally decided to join the Video Generation, and has launched their very own YouTube Channel.

Ranging in topics from Tax Credits, to calculating Withholding, to how to avoid Tax-Related Scams, these videos provide valuable information in short, easily-digestible portions.  To check it out, visit www.youtube.com/irsvideos.

Staying current is an ongoing process, and finally the IRS is taking some much-needed steps in making the process easier for us all.

That’s all for now! 

Steven

P.S. For a video that has absolutely NOTHING to do with taxes or money, but is fun nonetheless, check out:  http://tinyurl.com/64skpp

Ten Tips for Making Charitable Donations

Every year, millions of taxpayers itemize their deductions on their federal tax return. One of the most common itemized deductions is a donation made to a charitable organization.

Here are the top ten things the IRS wants every taxpayer to know before deducting charitable donations.

1. Charitable contributions must be made to qualified organizations to be deductible. You can ask any organization whether it is a qualified organization and most will be able to tell you. You can also check IRS Publication 78, which lists most qualified organizations. IRS Publication 78 is available at IRS.gov.
2. Charitable contributions are deductible only if you itemize your deductions using Form 1040, Schedule A.
3. You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified organization. Special rules apply to several types of donated property, including clothing or household items, cars and boats.
4. If your contribution entitles you to receive merchandise, goods, or services in return – such as admission to a charity banquet or sporting event – you can deduct only the amount that exceeds the fair market value of the benefit received.
5. Be sure to keep good records of any contribution you make, regardless of the amount. For any contribution made in cash, you must maintain a record of the contribution such as a bank record – including a cancelled check or a bank or credit card statement – a written record from the charity containing the date and amount of the contribution and the donor’s name, or a payroll deduction record.
6. Only contributions actually made during the tax year are deductible. For example, if you pledged $500 in September but paid the charity only $200 by Dec. 31, your deduction would be $200.
7. Include credit card charges and payments by check in the year they are given to the charity, even though you may not pay the credit card bill or have your bank account debited until the next year.
8. For any contribution of $250 or more, you must have written acknowledgment from the organization to substantiate your donation. This written proof must include the amount of cash and a description of any property you contributed, and whether the organization provided any goods or services in exchange for the gift.
9. To deduct charitable contributions of items valued at $500 or more we must complete a Form 8283, Noncash Charitable Contributions, and attach the form to your return, so we will need additional information such as when the item(s) were purchased, and how much they cost.
10. An appraisal generally must be obtained if you claim a deduction for a contribution of noncash property worth more than $5,000.

I hope the above is of help.  Please let me know if you have any questions!

Back in the saddle again!

Hello folks! 

Please accept my apologies for that small, 6-month, unplanned hiatus from blogging!  The tax season was, as it always is, a bit ~hectic~ shall we say, and I’m afraid I allowed my blogging duties to very quickly fall by the wayside.

But now I’m back, and promise to do a better job this time around! 

Regards,

Steven