Frequently Asked Questions
Why should I have you prepare my tax return? Can't I save money doing it myself or buying a $60 software program?
You can try to prepare your return yourself and borrow uncle Bob's copy of his tax software program, but do you know all of the deductions you are entitled to? What if you deduct something you aren't supposed to, or forget to claim some interest income or report your stock sales correctly? It usually takes IRS up to one year to catch up with something that is incorrect on your return. This happens when IRS compares the W-2 and 1099 information sent by employers and financial institutions with what you report on your return.. You are then charged interest and possible penalties on what you owe for that extra year. Do you want to take the risk by saving a few dollars? In most cases, I can save you much more (as well as the time it would take you) than if you had tried to prepare your taxes yourself. I recently helped a couple get just under $3,000 back by amending their 2008 and 2009 returns. They had prepared their own returns and missed several credits they were entitled to. My fees are very comparable to the cost of tax software if you have a basic return.
How much do you charge?
I charge by the form and complexity of the return. The more forms you need to use, the more expensive your return. I prepare and e-file all state returns. There is no additional charge for electronic filing. My fees are about half the price of store front tax preparation firms.
Where is your office located?
The address is 2297 N Hill Field Rd #102, Layton, Utah 84041. It is across the street from Northridge High School. See the "Directions" link
What filing status am I?
Single: You are not married on the last day of the year and are not able to claim Head of Household or Qualified Widow(er) status (see tests below).
Married Filing Joint: You are married on the last day of the year and have not been separated from your spouse the last six months of the year. You will file one return with your spouse.
Married Filing Separate: You are married on the last day of the year but do not want to file a joint return with your spouse. This is usually a higher rate than filing jointly but you may be able to save taxes if you had a substantial amount of medical expenses or miscellaneous deductions that are subject to a percentage of your income.
Head of Household: This is a lower rate than filing single. You must pass the following tests to claim HoH. Test 1. You are single as of the end of the tax year. This can include being legally separated or divorced or married, but living apart from your spouse the last six months of the year. Test 2. You must maintain a home for a qualifying relative. This means you must pay more than half of the cost of maintaining a household for the dependent. This includes children, step-children, foster children, parents, grandparents, in-laws, or blood-related uncles, aunts, nieces, or nephews. Generally, this person must be your dependent.
Qualifying Widow(er) : If your spouse died in one of the two years preceding the current tax year, you can use the current tax year's joint return tax rates if you meet the following tests: 1.You must maintain a main home for your child for the entire year and pay over half the costs of maintaining the household. 2.You can claim the child as a dependent. 3.In the year your spouse died, you could have filed a joint return. 4.You did not remarry before January 1, during the year you file your return.
I got divorced in the past year. Which of my children can I claim as dependents?
Your divorce decree should tell you which children you and your ex-spouse can claim. If one spouse claims a child and the other spouse claims the same child, the IRS will send you both a letter letting you know one of you must file an amended return not claiming the child. There is also a form you or your ex-spouse can fill out, allowing the other taxpayer the right to claim a child. Please ask me at our appointment if this situation applies to you.
My child turned 19 last year. Can I still claim an exemption for him/her?
All of your children under the age of 19 can be claimed as a dependent if they lived with you during the year and you provided over half of their support. For those over 19 you can still claim them if they are a full-time student under the age of 24. They must be attending a college, university, or trade school and be registered for what is considered full-time class work. You can also claim your child as a dependent if he/she is over 19, not going to college, and earned less than the current exemption amount (there is no age limit), or if the child is totally disabled. If you agree with your child to let him or her claim himself or herself instead, you may do that.
My child got married last year. Can I still claim him/her as an exemption?
If your child doesn't file a joint return with his/her spouse and meets the other dependency tests, you may claim him/her on your tax return. There are other exceptions to the rule. Call or email me for further information.
What is a Roth IRA and should I have one?
With a Roth IRA, you can put up to $5,000 each ($6,000 if over 50 years of age) into a savings or brokerage account each year as long as you have earned income or alimony of at least $5,000. If your income is less than the maximum allowed, you can put in as much as you earned. You still pay taxes on the money you put into your Roth IRA but when it comes time to take the money out, you don't pay any tax on the interest it earns. It is also easier to take money out (your contributions) of your Roth IRA before you reach age 59 1/2 without a penalty. You have until April 15th of the year following the tax year you are filing for to make your contribution. You can learn more about Roths through your bank, credit union or stock broker.
My son filed a short form and claimed himself as an exemption. Since he's technically my dependant, aren't I supposed to claim him?
If your child is under 19 years old and you provide over half of his support, you should claim him. Usually the exemption benefits you much more than it does him. If he's over 19 and not a student at a college or trade school, he claims himself. If he claimed himself and you want to claim him, he will need to file an amended return.
How long have you been preparing taxes?
I have been involved in tax preparation (I worked at the Ogden IRS center as a tax examiner) since 1980 but started my tax preparation business in 1984.
Do you have a business license to prepare taxes?
I am licensed to conduct my business out of Layton City. (License #731). My business is registered with the state of Utah Department of Commerce. IRS will soon require tax professionals to pass a test and obtain continuing education each year to prepare taxes. I will be taking the test in 2012. I plan to stay in business for many years to come.
What are your qualifications?
I worked as a tax examiner at the Internal Revenue Service and have prepared thousands of tax returns over the past 28 years. I have a Masters Degree in Organizational Management and have hundreds of satisfied customers. I attend IRS seminars each year, and read several tax books during the off-season. Many of my original clients from the 1983 tax year are still with me.
How do you keep current on the new tax laws?
I study all of the new laws when they are published by the IRS. I attend IRS sponsored tax seminars every year. I also do research on the Internet and read all tax-related newspaper articles.
Are you a Certified Public Accountant (CPA)?
No. Are you? I am a tax professional. Tax preparation is a sideline business for CPA's. They do accounting work for a living. The CPA title means that you will pay $250 or more for a tax return that I charge $75 for. Most CPA firms hire clerks to prepare returns, then the CPA reviews the work, signs the return, and charges much more than I do.
How many tax clients do you have?
I prepared over 525 returns last tax season. My business continues to grow thanks to my great clients and their referrals.
What types of tax returns do you prepare and what types don't you do?
I specialize in individual 1040 returns. I can take care of any type of situation you might have with your 1040 return. I do home businesses such as day care, Avon, Amway, and other types of services or merchandise sales businesses. If you have rental property, I can take care of you. If you have investments in the stock market, that's no problem. Whatever your situation, as long as it's an individual 1040 type tax return, you can rest assured that I have the knowledge and experience to prepare it right. I now offer Partnership, Estate, and Trust return preparation if you need this service. I currently do not prepare C Corporation or S Corporation returns as I do not have enough demand for these types of returns with my current customers.
What happens if I get a letter from the IRS saying there was a mistake made on my return?
Call me immediately! These are known as CP2000 letters. It takes IRS about a year to compare your return to what employers and other firms have reported about you. I guarantee your return to be accurate according to the information you provide me. If I make an error on your return and it's my fault, I will prepare an amended return for you at no charge and will give you a credit for any penalties and interest the following year. Your satisfaction is guaranteed! If an error was caused by you not giving me all of your documents, then I will need to charge an additional fee to file the proper corrections. It is extremely important that you give me all of your important tax documents at our appointment in order to avoid getting the dreaded CP2000 letter.
What if I get audited? Do you represent me in front of the IRS?
I have a pretty good track record with very few clients getting audited. There are four I know of since 1983. If by chance you get audited, I will be happy to go with you to explain to the IRS agent how I prepared your return, but I cannot represent you before the IRS.
Can I deduct my mortgage insurance (PMI)?
If you purchased a new principle residence or refinanced your current residence and paid PMI after 2006, you may deduct the amount as interest on Schedule A. Your PMI insurance you can claim will be on the 1098 form your receive from the mortgage company.
Can I get an energy credit for storm windows, doors and insulation for 2011?
Yes, but the 2011 credit is only $500 and will be reduced if you took energy credits in a previous year.
Why can't I deduct the taxes I pay on my vehicles?
Should I pay off my mortgage or continue to pay mortgage interest?
What do I need to look for when refinancing my home?
What do I do if I get a letter from the IRS saying there was an error on my return?
Do I qualify for Earned Income Tax Credit (EITC)?
What does my income have to be to have to file a tax return?
If you have any questions you didn't see answered here, feel free to send me an email at dave@sandbergtax.com.