Are you missing your refund?  Don’t miss out on your missing money….

The IRS is doing a little year-end cleaning and they want to get rid of your money. Almost 100,000 taxpayers didn’t receive their tax refunds last year due to simple mailing address errors. That means over $153.3 million, or about $1,547 per check, in refund checks had to be sent back to the IRS offices because of scribbled, incorrect, or just plain missing addresses – and are just waiting to be returned.

So if you’re one of those people still asking “Where’s my refund?”, you might find the “Where’s My Refund?” tool on IRS.gov very useful (or call 1-800-829-1954). You can check the status of that mysteriously absent check and find instructions on how to resolve any delivery problems. These are the only ways to find out about your pending refund, so don’t be fooled by e-mails that look like they are sent by the IRS. Those messages are phishing scams and your computer will be grateful if you don’t open the attachments or click on any suspicious links. 
 
A word of advice on future filings, you really should just choose direct deposit when you file your return and completely avoid the hassle of lost, stolen, and undelivered checks. You can receive the tax refund directly into your bank account, divvy it up between two or three financial accounts, or even buy a savings bond! You might as well go digital all the way and file your tax return electronically, so that you don’t have to go all the way to the post office. The IRS also recommends e-file because it eliminates the risk of lost paper returns, reduces errors on tax returns, and speeds up refunds. This is particularly useful for taxpayers who can’t even read their own handwriting; well, maybe they can, while the IRS Revenue Agent has to guess what those numbers really are on their returns.
 
The IRS knows best when it comes to tax returns, so listen to its recommendation and use e-file and direct deposit to avoid future delivery problems. You can also literally listen to the IRS’ Undeliverable Refund Podcast for more information or check out the agency’s Undeliverable Refund Video.

Review your retirement plan, i.e, 401k Plan, if you have one.  Make sure that all of the employees’ deferral have been deposited into their accounts; and any and all profit sharing or employer matching funds have been accurately distributed accordingly.The good news is that those profit sharing and/or employer matching distributions within a retirement plan are actually business write-offs and can help ease your year-end tax liability!

Moreover, any capital expenditures?  Section 179 will allow you to deduct a large amount of assets (expenditures) that you purchased throughout the year for business use.  Again, make sure you have the proper receipts and purpose of the equipment clearly stated for your tax preparer. 

Now where did you put those year-end W2’s? Your tax preparer will ask you for them, along with childcare-related expenses, and interest income received and mortgage payment 1098’s from your financial institutions. Keep an eye out because these documents must arrive on your doorstep by January 31.  Next is the numbered forms category, check for 1099’s received from your investment accounts, such as mutual funds dividends and/or interest received for the year, and any stocks sold with their proper gain or loss data. 
 
You can deduct any charitable donations you made during the year. Unfortunately, this does not include the time you spent doing laundry and taking the kids to school. Most charity organizations will issue a year-end summary of funds received from you by January 31. Any other small donations to Goodwill, Salvation Army, etc. must have a receipt with a description of the donated items and their estimated value.
 
To all the homeowners out there, do yourself a favor and confirm that you recorded your property tax payments. If you own rental properties, be sure that the collected rent has been properly documented as income, and related expenditures noted as rental expenses – this should include the property taxes you paid in the calendar year. While you’re searching through your “Property” file, if you refinanced, purchased, or sold any real estate this year, set aside your final closing document issued from the escrow company for your tax preparer. Please note that this must be the final closing statement and NOT the estimated statements.

Finally, gather up all of your medical expenses, doctors and medicine expenses alike.  They are tax deductible if you are filing itemized personal income tax returns.  Make sure you have the proper receipts to support your claims.  Dont’ forget those glasses and dental appointments you had throughout the year!

Now you’re ready to welcome in the new year with a (temporarily) clean filing cabinet!

 

On the Year End,

Sufen Wang

Wang Solutions

 

Why Everyone Needs a Little Accounting in Their Life

My students for Basic Accounting Principles 101 crept sluggishly into the classroom as if they were entering a death chamber. It was the first day of the Fall Quarter at Westwood College. One young man immediately heaved an enormous sigh and declared, “I hate accounting and I am terrible at math. Oh, I’m getting a headache just by being in this class.” I couldn’t suppress a smile as I said, “Let me set a few things straight. First of all, accounting has very little to do with math, but it has a lot to do with logic and common sense.”
 
“What?!” cried all of students in the classroom, their sleepy ears perking up.  Well, that definitely got their attention!  “Yup, accounting is about how an individual “accounts” for a transaction, how one “reports” the data, and how one “translates” the information. The math portion simply plays a supporting role in the big picture. Whether it’s for business purposes or personal reasons, one wants to know where his money is coming from, how much of it he can generate, and how much he has left over at the end of the day.
 
“So accounting is really a medium that helps you keep track of your business transactions, report these transactions correctly according to accounting guidelines and principles, and most importantly, make your next business move. In other words, an accounting background is like having a secret weapon in the business world!” I exclaimed to my students. I continued to stand on my soap box and preach that everyone should have some accounting knowledge as he or she travels through life. Regardless of your chosen profession, you must be able to understand what your CPA, your tax preparer, your bookkeeper and/or your financial advisor is telling you about your financial status.
 
“When you’re a successful professional and have a family of your own ten years down the road, you’re going to be making big decisions about your money. It’s imperative that you know how to read a Balance Sheet and an Income Statement. How often have you heard on the news that a celebrity or business owner was cheated out of his/her life savings? It’s bad when an accountant steals from his clients, but it’s almost worse when a business owner doesn’t know how to read his own financial statements or check his bank accounts. 
 
“I would go so far as to say that it’s fun to run a business once you know how to read and interpret its financial statements. Accounting functions as a safety net for your pocketbook – you can even think of it as the CSI of Numbers!  Armed with accounting know-how, you can keep your financial advisors honest and your bank account secure. Remember to always check the integrity of your data – numbers don’t lie, people do – without principles and integrity, your financial statements would read like a fiction novel on the New York Times Best Seller list.”
 
 
On the Money,
Sufen Wang
Wang Solutions