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Rhode & Van Fleteren

Certified Public Accountants

10004 E. Lippincott Blvd., Suite A

Davison, MI 48423

(810) 653-1930 ♦ Fax: (810) 652-1933

 

Happy New Year!!   

 

We had a big change this year, Steve Van Fleteren retired on 6/30/22.  For those who would email documents to Steve please avoid using his email because it will delay the completion of your return. 

 

All of us are going through a transition and we are asking that you please be patient.  Many of the meetings and phone calls will now fall to me.  This will take up significant amounts of my time.  In an effort to help, I have added new staff and increased the hours of our seasonal help. We currently have four CPAs and four accountants, all who have experience working on tax returns.  For this reason, I have assigned responsibility for various clients to my staff to help provide you the excellent service you are used to receiving.          

 

It is still necessary to limit the amount of tax meetings since there are only so many hours in a day.  For returns that don’t have a meeting, our procedure will be to have a team member contact you directly, to obtain final pieces of information, provide tax results, and answer any other questions.  If you need a meeting, please contact the front desk.      

 

What can you do to help us with our process? Get your stuff in early!!  Often waiting to give us your documents because you are missing one piece or you get busy can delay the completion of the return.  The earlier we can review your documents the sooner we can determine what else we need.  Next gather all important tax documents mailed to your home and review tax documents that you receive online so you can login to get them printed.  It is usually a broker statement or a K-1 that comes later don’t wait on these things.  Any return we receive after April 1, 2023 will have to be put on extension. The 2022 tax season procedures and tax information form are attached. 

          

We strive to continue to provide excellent and efficient service.  This information will also be available on our website and our Facebook page. Please contact us if you have any questions regarding our procedures.  We are happy to help and look forward to serving you. 

 

Sincerely,

ANGELA RHODE, CPA          

         

                                      

2022 Tax Season Procedures

 

  1. Client organizers were printed the first week of January 2023 and we used the prior year list of taxpayers who requested them.  If you would like to be added to the list, please call us at 810-653-1930.

 

  1. Please fill out the enclosed form and return it with your tax documents. 

 

  1. Options to deliver your documents to us:
    1. Mail - It is best to make copies and send certified mail.

 

  1. Deliver to our office and deposit them in our secure drop box located to the right of the suite door.  Please enclose everything in a sealed envelope.

 

  1. Send them through our secure, electronic Portal. Please contact our office and we will assist you with setting up an account.

 

  1. Email your documents to cathy@davisoncpas.com .  Avoid this method with confidential information because this method is not secure.    

 

  1. When your return is complete, we will arrange to review it with you either by phone, zoom meeting or facetime appointment. 

 

  1. Options to receive your tax returns:  
    1. Pick up at our office. 
    2. Mail – Returns will be sent USPS certified mail for tracking purposes.  There is a $10 fee for this method.        
    3. Portal – 24-hour access to your returns once an account is created.

 

  1. IMPORTANT: Form 8879 will be included with your finalized tax return.  It must be signed and returned in order for us to file your tax returns with the IRS and state.  You can return this form to our office by dropping it off, mailing it, or fax to 810-652-1933.  If you decide to email to cathy@davisoncpas.com, please make sure to block out social security numbers.   

 

 

 

2022 Tax information and questions

 

Name__________________________   Contact Phone: ____________

Address___________________________________________________

Email_____________________________________________________

Preferred way to receive completed return:   Mail ____   Pickup _______ Portal____

Method for meeting or communication: Phone call____ Email____ Zoom____ Facetime____

Best time for meeting:  AM____ or PM____   Preference on Day __________

Do you want a Portal:  Yes_____    No _____ Have One _______

Confirm your bank account for refunds:  Same as LY     New (provide a copy of check)
 

Questions you have and want answered:

  1. ________________________________________________________________________________________________________________________________________________________________________________________________________________________
  2. ________________________________________________________________________________________________________________________________________________________________________________________________________________________
  3. ________________________________________________________________________________________________________________________________________________________________________________________________________________________
  4. ________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

 

Virtual Currency: At any time during 2022, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency? Yes ____ No ___

Signature__________________________________________________________

 

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Taxes

Taxes

Being self-employed, what sort of deductions can I take?

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

To be deductible, a business expense must be both ordinary and necessary...

If I have a large capital gain this year, what can I do?

If you have a large capital gain this year from an investment, it may be advisable to hold onto the investment until next year to put the gain into next year's taxes. You may also want to sell off any investments that you have that are losing value at the moment to claim your losses.

If you have a large capital gain this year from an investment, it may be advisable to hold onto the investment until next year...

What investments can I make to help defer taxes?

The interest gained from state and local bonds is usually exempt from federal income taxes. These investments generally pay back at a lower interest rate than commercial bonds of similar quality.

Since Treasury Bonds are similarly exempt from state and local income tax, they can be a particularly good investment for those who are in high tax brackets and live in high-income-tax states.

The interest gained from state and local bonds is usually exempt from federal income taxes...

What retirement plans are available to aid in the deferral of taxes?

You have the ability to invest some of the money that you would have paid in taxes to add to your retirement fund. Many employers will offer the opportunity to defer a portion of your earnings and contribute them directly to your retirement account. Some of them may even match a portion of your savings. If this is the case, it is always advisable to save at least the amount that your employer will match. This will give you an automatic 100% gain on your money.

If you are self-employed, look into getting a Keogh, SIMPLE or a SEP IRA.

You have the ability to invest some of the money that you would have paid in taxes to add to your retirement fund...

What other ways can I defer this year's income?

If you own your business you may want to postpone sending certain invoices to ensure that you will receive payment in the following tax year. This can help greatly if some of this income would push you into a higher tax bracket. You may want to accelerate paying for expenses to cover your taxes in the current year.

If you own your business you may want to postpone sending certain invoices to ensure that you will receive payment in the following tax year...

Record Keeping for Taxes

What do I need to keep for tax reasons?

It is a good idea to keep all of your receipts and any other records that you may have of your income and expenses. These will come in very handy if you are audited.

It is a good idea to keep all of your receipts and any other records that you may have of your income and expenses...

How should I separate and organize these?

It is advantageous to categorize your expenses:

  • Income
  • Exemptions
  • Medical Expenses
  • Taxes
  • Business Expenses
  • Education
  • Travel
  • Auto

It is advantageous to categorize your expenses...

How long should I hold onto these documents?

It is recommended that you keep these documents for three to seven years, depending on the document. Check the Retention Guide on this site for additional details.

It is recommended that you keep these documents for three to seven years...

How long should I keep old tax returns?

If you are audited, it is very likely that the auditor will ask to see the last few tax returns. It is recommended to keep these tax returns forever.

An added benefit of keeping your tax returns is that you can see what you claimed last year, allowing you to adjust for the current year.

If you are audited, it is very likely that the auditor will ask to see the last few tax returns...

What other records should I keep?

If you purchased goods that you plan to sell later, you should keep the receipts to calculate your gain or loss on it correctly.

  • Anything regarding the property you own and any fixes and repairs that you perform.
  • Receipts for any jewelry or other valuable collector's items
  • Records for capital assets, stocks, bonds and such

If you purchased goods that you plan to sell later, you should keep the receipts to calculate your gain or loss on it correctly...

What recordkeeping system should I have?

If you are an employee of a company, your system needn't be complex - you can keep your records separated in folders.

If you are a business owner, you may want to consider hiring a bookkeeper or accountant. Check the Financial Guide for Business on this website.

If you are an employee of a company, your system needn't be complex...

Education Expenses

Are there available tax breaks for my children's education?

There are many different ways to use tax breaks for the higher education of your children. Be aware that you can only receive one type of relief for one item. It is best to consult with a professional to determine which would be the most advantageous.

There are many different ways to use tax breaks for the higher education of your children...

What is the education tax credit?

You must make a choice between two types of tax education credit.

  • The American Opportunity Tax Credit will work for the first 4 years of college for at least full-time study.
  • The Lifetime Learning Credit applies for as long as the student studies, but the percentage of savings per year decreases drastically.

You must make a choice between two types of tax education credit...

What is a Coverdell (Section 530)?

An education IRA is different than a standard IRA in these ways:

  • Withdrawals aren't taxed if used for qualified education expenses.
  • Contributions can be made only up until the point that the client reaches 18, and all funds must be distributed by the time that they are 30.
  • Contributions are not tax deductible

An education IRA is different than a standard IRA in these ways...

How can I best use the Coverdell (section 530)?

It is possible to have various 530 accounts for the same student, each opened by different family members or friends. There is no limit to the number of people that can open an account like this for a child.

The account can be transferred to another family member at any time. If the original child decides against going to college or is granted a scholarship, another family member can still utilize the money that has been saved.

It is possible to have various 530 accounts for the same student, each opened by different family members or friends...

What is a qualified tuition program?

The Section 529 is a college savings program available in most states. Money is invested to cover the costs of future education. These investments grow tax free and the distributions may also be tax-free.

The Section 529 is a college savings program available in most states...

What differentiates the Coverdell Section 530 and the Section 529?
  • The Section 529 allows for much larger yearly investments, whereas the Section 530 currently only allows for $2000 annually.
  • The choice of investments in the Section 529 is extremely conservative and limited while the Section 530 allows for many different options.
  • The Section 530 is a nationwide program while the 529 varies from state to state.
  • The Section 530 will let you use its funds for primary and secondary education, while the Section 529 can only be used to pay up to a total of $10,000 of tuition per beneficiary (regardless of the number of contributing plans) each year at an elementary or secondary (k-12) public, private or religious school of the beneficiaries choosing.

The Section 529 allows for much larger yearly investments...

Can I take money from my traditional or Roth IRA to fund my child's education?

Yes, you can take distributions from your IRAs for qualifying education expenses without having to pay the 10% additional tax penalty. You may owe income tax on at least part of the amount distributed, but not the additional penalty. The amount of the distribution that is more than the education expense does not qualify for the 10% tax exception.

Yes, you can take distributions from your IRAs for qualifying education expenses without having to pay the 10% additional tax penalty...

What tax deductions can be used for college education?

There is a limited deduction allowed for higher education and related expenses. In addition, business expense deductions are allowed, without a dollar limit, for education related to the taxpayer's business, employment included.

There is a limited deduction allowed for higher education and related expenses...

Is student loan interest tax deductible?

In certain instances, yes, although deductions need to adhere to a few guidelines. The deduction is also subject to income phaseouts.

  • The deduction ceiling is $2,500.
  • If you are a dependent, you may not claim the interest deduction.
  • You need to be the person liable for the debt and the loan must be purely for education.

In certain instances, yes, although deductions need to adhere to a few guidelines...

Can I deduct for education that helps at the workplace?

If you are receiving this education to maintain or improve skills at your current job, yes, but not if it is to meet the minimum requirements.

If you are receiving this education to maintain or improve skills at your current job...