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Seeing Beyond the Numbers
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-
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?
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
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.
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 -
AMT was permanently extended and linked to inflation increases for each year.
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
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