Chavez and Associates, LLC
Accounting, Bookkeeping and Tax Services

Seeing Beyond the Numbers

What About Those FREE Tax Preparation Offers?

You may have seen or heard of some financial service firms and even retail businesses offering to do tax preparation for free or for a very nominal sum.  How can they do that, since they obviously lose money on the tax returns?


They have to make money somewhere.  Some retailers expect you to spend your tax refund with them.  Financial services firms may hope to make money on other products and services they plan to sell to you.  Read the privacy policies carefully, as they will indicate if the company doing your tax preparation plans to share your personal financial information with “affiliates” or “subsidiaries” or “non-affiliated third parties.”  Some firms use free or cheap tax return preparation as a “loss leader” to generate prospects for their other financial products.  Guard you financial privacy carefully.


If a firm is doing your taxes for nothing, how much time do you think will be spent carefully looking for deductions and analyzing your future tax planning.  Also, how motivated do you think the person preparing your free return will be?





Some Tax Filers Can’t File Under the End of February

Not everyone must wait beyond January 30th, but some people will.  Congress didn’t pass the new tax legislation until January 2nd.  Although the IRS expected some of the changes and will be able to have new forms in the computers by January 30th (opening day for filing tax returns this year), other forms will not be ready until later in February.  The ones that may affect you are the Residential Energy Credit and depreciation on businesses, rentals, cars, computers, etc.  There have been changes to depreciation this year, and returns with depreciation will not be able to file until the end of February.  That will affect you if you have a rental house, are self-employed, work from home, or use your own work tools, laptop, smartphone, automobile to do your job.



Owe Taxes, but Can’t Pay?

A common question that Chavez and Associates, LLC gets is, “What do we do if we can’t pay the taxes that we owe?”  Well you should never be afraid to file a tax return or extension of a tax return.  Remember, no matter how much you owe, not turning in a tax return can result in strict penalties.  Once you turn in your tax return, pay what you can.

When Will I Get My Refund?

The IRS is not printing a cycle chart this year and has told us that refunds will be delayed while the computers look closely at fraud and ID theft.  We expect most refunds will take 3 - 4 weeks.

AMT

AMT was permanently extended and linked to inflation increases for each year.

FYI for 2013

Business Mileage Rate is $0.56

Medical/Moving Mileage Rate is $0.24

Volunteer Mileage for Charity Rate Remains at $0.14

Contribution to an IRA Maximum $5,500; Increase to $6,500 if Over Age 50

Contribution to a 401k Maximum at $17,500; Increase to $23,000 if Over Age 50

Contribution to a SIMPLE Maximum is $12,000; Increase to $14,500 if Over Age 50

Social Security Max Wage is $113,700



FREQUENTLY ASKED QUESTIONS