Kathleen M
Zaffore PC 6094 N Eldorado Court
Certified Public Accountants Parker CO 80134
Tel 303-841-4920
Fax 303-841-9720
January 2006 -- TAX TIME (where did the last year
go??)
Can
you believe it? It’s time to gather
up those pesky tax papers as they
arrive in the mail. Back by popular
demand—the plastic envelope.
1.
Place
the enclosed envelope wherever you process your mail (I do that over the
shredder!).
2.
As
tax info arrives, put documents right
into the envelope. Immediately!
3.
Review
the checklist (below) as a reminder of what we are going to need to
do your return. Place additional documents in the envelope (ie HUD settlement
sheets for refinances and new home purchase, car registration for deductible
owner tax, etc.).
4.
If
we normally send you a printed
personalized, detailed tax organizer, you will find it in the envelope. If
you haven’t received an organizer in this package and want one, call the office
or drop us an e-mail. Remember – use the organizer as a
guide. It is not necessary to fill it
out in detail. Unless you want to. We still need your original documents
(photocopies are ok).
5.
If
we normally send you an interactive
organizer via e-mail, we will do that as soon as our software is installed
and working properly – usually toward
the end of January. If you
would like to try out the e-organizer, let us know. Those of you who have tried E-Organizer in the past, love it – so
any new takers this year?. One
caveat: if your tax return is very complex, E-Organizer is NOT the best
method.
6.
To
get your documents to us (choose one or more):
ü
Mail
us the envelope filled with the info you’ve gathered
ü
Make
an appointment and bring in your documents
ü
Drop
off at the office or in our brown client mailbox at the top of the stone steps
ü
Fax
ü
Scan
and e-mail .pdf files
We
look forward to seeing everyone soon
– the sooner the better. We expect to
start rolling on returns by late January.
Those of you who got in early last year know that our turn-around time was about a week in February, about 3 weeks in
March…and once April arrived, it was anyone’s guess when returns would get
finished.
For Individuals – we will need:
q
W-2’s
q
1099’s –
interest, dividends, retirement/pension, state tax refunds, unemployment, sale
of securities, oil and gas interests, etc.
q
K-1’s –
partnerships, S corporations, LLCs, LLPs, estates, trusts, etc. (for some of
you, we will generate the K-1 when we do your business tax returns)
q
Social
Security statement if you receive benefits (we don’t need the annual
update of wages earned—but you should look at it carefully!!)
q
Closing
statements for all real estate deals, including refinancing (points may be deductible and property taxes
are often paid at time of refinancing)
q
Amounts (and DATES) paid for quarterly estimated state and federal taxes
q
Social
Security Numbers for new dependents
q
Basis
of securities sold – with enough information, we can help with
this, like the date of purchase
q
Investment
account statements – with
enclosures (often there are little hidden deductions in those papers!)
q
Mortgage
interest statement (talk to us about second-home deductibility for
boats, RVs, etc!)
q
Real
estate taxes – all real estate tax is eligible for deduction
q
Personal
property tax – car tax (see ownership tax and prior ownership
tax on car registration) (Most of you forget to bring this one to us!)
q
Charitable
contributions – remember cash
(check or credit card, too) as well as noncash
items and volunteer work mileage!
q
Child
care costs – amount, name and Social Security# or tax i.d.
# of provider, address
q
Educational
loan interest
q
529
Plan contributions (eligible for state
deduction)
q
Tuition
payments – college, graduate school, post-high school education of any kind
q
Health
insurance paid AFTER tax or if self employed (or K-1
recipient—ask us!)
q
Contributions/withdrawals to/from Medical Savings Accounts, Health Savings
Accounts, IRAs, SEPs, SIMPLEs, KEOGHs
q
Installment
sales – payments received
q
Moving
expenses (if job related)
q
Medical
expenses – don’t overlook mileage, lodging, prescribed “stop smoking”
programs, glasses, braces, prescribed weight loss programs (!!) etc.
q
DID
YOU BUY A FUEL EFFICIENT CAR THIS YEAR??
TELL US.
q
Family
Changes!! (new
spouse, new children, children who have flown the nest, etc)
q
New
Address, New Phone Number, New E-mail Address –
anything NEW
For
Businesses/Entities – [check
with us if we do your bookkeeping]
Þ
Financial
statements (or data backups – not copies – of Peachtree
or QuickBooks or Quicken files)(these can be e-mailed – give us a call and we
will explain how)
Þ
General
ledger and list of journal entries (if we
don’t get a data backup)
Þ
Bank
statements and reconciliations, especially year end December
2004 and January 2005
Þ
Check
registers (if we need to do bookkeeping)
Þ
Investment
account statements
Þ
Aging
reports for receivables and payables (if we
don’t get data backup)
Þ
List of
assets purchased/sold/disposed of during the year – include
bills of sale/purchase
Þ
Notes,
leases – amortization schedules, new note contracts
Þ
Payroll
reports for all 4 quarters, and year end
Þ
Any Changes
in Ownership or Capital Structure
IMPORTANT
TIDBITS FOR THE OLD AND NEW YEARS
STANDARD
MILEAGE RATES
Beginning Jan. 1, 2006, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
The
new rate for business miles compares to a rate of 40.5 cents per mile for the
first eight months of 2005. In September, the IRS made a special one-time
adjustment for the last four months of 2005, raising the rate for business
miles to 48.5 cents per mile in response to a sharp increase in gas prices,
which topped $3 a gallon.
TRADITIONAL
AND ROTH IRA CONTRIBUTION LIMITS—FUND BY APRIL 17!!
|
Tax year |
Under age 50 |
Age 50 or older |
|
2005 |
$4,000 |
$4,500 |
|
2006-2007 |
$4,000 |
$5,000 |
|
2008 |
$5,000 |
$6,000 |
|
2009-2010 |
$5,000 indexed |
$5,000 indexed plus
$1,000 |
THERE ARE SOME IMPORTANT
RESTRICTIONS – GIVE US A CALL BEFORE FUNDING
FROM SOCIAL
SECURITY ADMINISTRATION:
|
Retirement Earnings Test Exempt Amounts: |
2005 |
2006 |
|
Under full retirement
age |
$12,000/yr. |
$12,480/yr. |
|
Year individual reaches
full retirement
age |
$31,800/yr. |
$33,240/yr. |
|
There is no limit on
earnings beginning the month an individual attains full
retirement age (65 and 6 months for those born in
1940; 65 and 8 months for those born in 1941). |
||
|
Maximum Earnings Taxable: |
2005 |
2006 |
|
Social
Security (OASDI only) |
$90,000 |
$94,200 |
NEWS ON THE
ESTATE FRONT:
|
Estate Planning |
2005 |
2006 |
|
Estate
Tax Exclusion |
$1.5 million |
$2 million |
|
Gift
Tax Exclusion |
$1
million |
$1
million |
|
Annual
Gifting – to anyone |
$11,000 |
$12,000 |
IRS
Notices—Top 7 Reasons For Receiving One
(and nobody really likes hearing from the IRS,
including us)
1. Wife’s name does not match SS number – she
never officially changed it with Social Security Administration – go to www.ssa.gov.
2. Child’s name does not match SS number –
please check numbers of all new arrivals to a household (ie step children, new
births, adoptions)
3. Child was “taken” on another return –
please let us know if this is the year you are allowed the deduction for a
child who is “shared” for tax purposes.
Also – make sure your college student understands that he/she is probably
STILL your dependent!
4. Failure
to report all income from Forms 1099 – that includes interest income,
retirement distributions, dividends, rents, royalties, and miscellaneous
nonemployee compensation (ie contract work).
5. Failure to report all income from W-2s –
don’t forget even those tiny little part time jobs. All income is taxable.
6. Incorrect estimated tax payments – please
let us know the exact amounts you paid for your quarterlies (if you do
quarterlies) and the date you made the payments.
7. Penalties and interest statements – if you
do not pay your taxes by April 15 (even if your return is extended), the IRS
will charge you penalties and interest on outstanding tax balance when you do
file. That is why we work so hard to
get you an estimate of taxes due before April 15 if you are going to extend.
Help us minimize contact with
the IRS by providing complete information and then checking your return before
filing. We really hate to admit it…but
we do make mistakes once in awhile…drat!
****AND NOW AN INTERNET WARNING FROM THE
IRS****
There is an Internet scam going around in
which a bogus email informs the recipient that he/she is eligible to receive a
tax refund for a given amount. But to
access a form for the tax refund, the recipient is asked to use a link
contained in the email, which then requests personal and financial
information. THE IRS DOES NOT ASK FOR PERSONAL
IDENTIFYING OR FINANCIAL INFO VIA UNSOLICITED EMAILS AND TAXPAYERS DO NOT HAVE
TO COMPLETE A SPECIAL FORM TO OBTAIN A REFUND [OK, YOU DO HAVE TO COMPLETE A
TAX RETURN]. DO NOT OPEN ANY
ATTACHMENTS!! You can always
give us a call to check on your refund, or call the IRS at 800-829-1040 to
determine if it is trying to contact you.
FOR THE 2006 SEASON
¨
Web Site.
We are updating
our web site for 2006: www.zaffore.com. Please take a minute to check it out (after
mid-January!). Good stuff: annotated links to a variety of sites
including the IRS, Social Security Administration, the Secretary of State, and
a host of business and personal finance sites; articles for small businesses,
investments, personal finance.
¨
E-Mail.
We check our e-mail often during tax season, so feel free to communicate
with us that way (sometimes easier than calling). Our staff e-mail addresses: (the old one on AOL works,
too).
Kathy
Zaffore, CPA kathyz@zaffore.com
Kim Ruane,
CPA kimr@zaffore.com
Kathleen
Bell, CPA kathleenb@zaffore.com
Vicki Stevens, Computer Wizard vickis@zaffore.com
Michele Adrian, CMA michelea@zaffore.com
Lorie
DeBerard, Bookkeeper, Admin lorie@zaffore.com
Linda
Gross, Accountant, Tax Preparer linda@zaffore.com
¨
PDF FILES. Your copy of your federal and state tax
returns will be returned to you on a CD in a pdf format, just like last year. We will include instructions to open the file
on your PC—it is easy—just double click on the pdf icon—that is all you have to
do. To our knowledge, the pdf will
still not open on a Mac computer, but we can e-mail you the file, with your
permission, and you can open that file.
If you don’t have a computer, let
us know. We will run a paper copy
for you. If you don’t have Adobe reader
software on your computer, let us know and we can help you get it installed. It is free.
¨
Payments.
When we call to let you know that your tax returns are ready, you can
either pick them up or we can mail them to you. Your invoice is included
in the package. Prompt payment is
appreciated!! We accept cash, checks,
credit cards, and compliments (along with payment). We do not accept livestock. If your account is more than 30 days overdue, we will rebill you
with a finance charge of 1.5% per month and a rebilling fee of $5 per month. Sorry L.
¨
The Official Client Mail Box. It
is a real mailbox, painted brown, complete with a red flag. It is located at the top of the stone stairs
coming down to the office. Feel free to
use the client mailbox to drop off and pick up documents. Please do not leave stuff in the real
mailbox on the street – the post lady gets, well, postal.
¨
Directions. Remember -- Pinery Parkway is now a circle
drive, making a complete loop from Parker Road at south and north ends of The
Pinery. The “dead end” is gone and
there is a LOT of CONSTRUCTION. You
have to look for Ponderosa Way.
MapQuest is NOT a good source to find your way through our woods—it has
streets that do not yet exist. Call for
a map. Tax season is bad enough. Don’t wander in the dark and the cold. AND
PLEASE WATCH FOR DEER ON THE ROAD – WE ARE TALKING *HERDS OF DEER*
Team
Gossip:
Kathy Zaffore, CPA, principal, continues to be enthralled by
Grandbaby Ian, who is now 18 months old, has learned the power word “no” (have
you ever wondered how many languages use the actual word “no”?) and understands
that driving a car is nearly as powerful as “no”—just try to take his keys away. Look out world! We stayed pretty close to
home all year with a couple of long weekends in Santa Fe NM for a change of
scenery. I keep taking those Italian
lessons though, dreaming of Tuscany.
Kim Ruane, CPA, practice manager, packed 3 kids off to
college last fall—2 to University of Illinois –Champagne-Urbana (Kim’s alma
mater) and 1 to CU Boulder. I cannot
even comprehend having 3 kids in college.
Fortunately, the oldest is graduating from U of I in May with a degree
in Chemical Engineering—and offers galore! Woo hoo! Kim has taken to the Empty Nest without shedding too many tears, having
discovered the joy of popcorn for dinner.
Meanwhile, back at the ranch, she continues in her indispensable role as my right (organized) hand. Almost all of you have contact with Kim during
the year and she puts a lot of effort into making sure that your needs are
met. Hint: she has some control over my schedule…so be nice to her.
Kathleen Bell, CPA , accountant extraordinaire, continues to work
her magic with her blessed and happy group
of clients. Unfortunately for us all,
Kathleen limits her work time so that she can do what she loves best – caring
for her two kids and husband who oversees the data management in Jeffco
Schools. The family is getting into
summer Road Trips – this year to Washington state and environs for a family
reunion and then down to Ouray to hike the hills. Major accomplishment for the year for this 4th
generation Coloradan—she learned to ski!!
Michele Adrian, CMA, Enrolled Agent, continues
to manage the lives of four children under the age of twelve, as well as a
husband, dog, cats, a horse, and various furry/edible 4-H projects (and she
home schools, does some independent bookkeeping, and makes candles for
sale—busy lady!). Michele will continue to limit her time with
us in 2006, primarily working on special projects during our quarterly crunch
times. We appreciate her joy and
positive outlook year round.
Vicki Stevens, IT Specialist and Overall
Computer Wizard and Bookkeeper and Software Designer and …, not only keeps our systems up and running,
but has stepped back into the role of QuickBooks trainer. She continues to sell
her own software product, AllReports, a nifty add-on for doing state
unemployment reports, W-2s and 1099s with QuickBooks and Peachtree. If you do your own reports, you NEED this
software. E-mail her for details. Or look up www.granitesoftware.com. This year, Vicki escaped for a road trip,
leaving her teenage daughters at home, and headed for week of fun in the Las
Vegas sun. Back at the ranch, she took
up racket ball as a leisure activity….this girl does not slow down.
Lorie DeBerard, Bookkeeper and
Administrative Assistant,
is our resident cheerleader—enthusiastic and fun, greeting every caller like a
long lost friend, a real joy—dare I say, even a treasure in the midst of tax
mayhem. Away from the office, she holds
down the fort for 3 kids (oldest is in high school! Where does the time go?), a
globe trotting husband, a cat and a puppy that stowed away in Santa’s bag this
year. [I have a great way to housebreak
dogs that is goofy but nonviolent…I’ll tell Lorie and she can tell you if it
works. Give her a call – AFTER April 15].
Linda Gross, Tax Preparer and Accountant, joins the crew this year. Schooled
at Northern Arizona University, Linda has been working in and around public
accounting for nearly twenty years and we are delighted to have her join us for
tax season. She has a ready smile, a
can-do attitude, and an ability to keep a lot of plates spinning simultaneously
and neatly – all important characteristics for good accountants. Outside of the office, she is a wife and
busy mom of a teenage son. When asked
what she does for fun, she was quick to answer that she is a huge fan of high
school league basketball, traveling regularly to root for her favorite player
(her son).
Back Page
FOR
BUSINESS CLIENTS:
Software
Updates: We are currently using Peachtree Complete Accounting 2006 and
QuickBooks Pro 2006.
Year End Payroll Info: We will
electronically file all W-3 transmittals
to Social Security on your behalf.
Throughout 2006, we will also electronically file as many 941s, and UITRs
as we possibly can. The transmittals
that come with your payroll packages will provide instructions, but you can
always call us with your questions.
We
will electronically file partnership tax returns again this year. And if we can electronically file
corporations, we will do that, too.
FOR
EVERYONE:
We
will file most 1040 individual tax returns (both state and federal) electronically
this year in our continuing effort to save America’s forests.
EMAIL DISCLAIMER. New laws
have passed that are forcing us to write a disclaimer at the end of every email
that includes tax information. We
apologize for the verbiage, but it is necessary. If you want to know how Kathy *really* feels about it, give her a
call.
Getting
Organized? We know it is an illusive
quest. But if this is the year, we can
give you a very nice tool called LifeRecords to help you pull together an
“index” to your financial life—wills, insurance polices, brokerage accounts,
etc. Just ask us.
Emergency
Lists!! Please consider keeping an
emergency workers’ list in plain sight.
Put on that list:
ü Emergency phone numbers to reach not only you, but
friends, neighbors, relatives.
ü Names of children and who should be contacted in case
you are incapcitated (to avoid Social Services showing up)
ü Names of pets (and where to find them) and who should
be contacted in case you are incapcitated (to avoid the Dog Catcher)
ü Don’t forget to tell your friends, neighbors,
relatives that you have used their name as an emergency contact!! (this is
pretty important)
Net
Worth. Do you know your personal financial
net worth? Do you want to? Give us a call. We can help you figure it out, set up tools to track it, and think
through how to improve it.
WE APPRECIATE YOU ALL
AND
WISH YOU THE VERY BEST OF EVERYTHING FOR 2006.
SEE YOU SOON!!!!!!
[and, as always, stay in touch with us
during the year – as accountants, we are basically nosey and want to know what
is going on in your lives—even if there is no tax impact…which is rare these
days]