TAX SEASON IS HERE - THE FUN OF FILING OF INCOME TAXES THIS YEAR

 Got some tax returns out to clients.  It has not been easy this year.  In addition to the usual problems – missing papers that clients have to get to me after the sending the rest of the papers, etc.  I have been having unusual problems this year.

A business client was ill and needed surgery – so had to get an extension for her business as the returns for same were due March 15.  Then sales tax was due March 20 – luckily she was back at work part time by then and was able to mail me (she does not use a computer at all) a list of her sales so that was out on time.  

I keep a copy of last year's returns for clients on paper and scan all returns (and many other papers) into the computer to be able to store them in much less space and it is much easier to find and access what is needed.  I have been using 2 different software programs which make pdf files to do this.  We had to get a new “all in one” (printer, scanner, fax) during the past year – this is the second one we have bought – returned the first one due to scanner peculiarities and bought this one, a different unit from a different manufacture, which seemed to work fine.  But it has developed peculiarities also – I cannot add pages to a saved pdf file.  So I was making different files and copying the pages into the older one from the newer one.  Did that on a return recently and suddenly – all the pages are there, but I can only print the pages from the original file.  Husband found software to combine files – it took over my computer making itself the default not only for scanning, but also for printing (and we did not even know it printed.  Husband took it out today, but it still seems to be default for scanning and printing – I will have to have him reset the default programs for me.  (Yes, I could do it myself – in college he would copy my computer programs, but it gives him something to do and if anything goes awry, at least I will not get blamed while he repairs the problem.)
    

THOUGHT OF THE WEEK -

Tax time is here (in the USA) – don't forget to file on time or get an extension.  Don't give Uncle Sam (or his friends the states) a reason to charge you penalties and interest – you KNOW you pay them too much to begin with.  Only 19 days left to file (due April 18 this year Federally and in most states).

SORRY NOT TO HAVE POSTED - IT HAS BEEN ONE OF THOSE TIMES - TOO MUCH TO DO AND MORE COMING DAILY!!

 Yes, it's been a few weeks since I posted.  My apologies.  I am sure all of you have gotten into periods of time when too much has TO be done in too short a time – that's where I have been.

I have to do extensive paperwork for us to apply for senior reduction in our real estate taxes.  Last year our submission took 126 pages - and when I dropped this office they were NOT surprised at how big the submission was and had clips large enough for it all – I submit it in 2 sections as we don't.

While my part of doing this is bad enough, I had trouble getting the correct printout from our medical insurance company – it took a letter and 4 or 5 phone calls over the period of almost 2 months to finally get the paperwork we needed – and I had sent a copy of last year's printout to show them what we needed with the first request.  I have to enclose proof of all incomes (umm, do they think I would include an income we didn't have?).  Since I am self-employed I also have to include proof of all my business expenses and the same for husband's business.  This year for the first time we also had to get a print of what income IRS has for us.  Have I mentioned copies of our Federal AND State income tax returns have to be sent also?   One thing which has become easier is that since I am not going out to clients due to Covid I am not taking car expenses so I don't have to copy all of that and include it (submission with same used to be something like 170 pages).  I finally got a chance to work on all of this this week – due by January 2 – but who wants to be dealing it with it during the fun of December.  We will walk this into the county assessor's office as one year there was confusion and even with mailing it certified mail, we were not sure if they received it in the mail.  

I also have to take a series of courses to be able to be able to prepare income tax returns next year – 20 hours of classes plus exams.  Luckily I can do at this home online – but it does take a lot of time – actual time is lot more than 20 hours.  

So last week I started working on the real estate tax exemption paperwork.  I was doing well and then – I got a notice from IRS that we never filed a partnership return for a zero income (for decades) business we have.  It was due and filed last March!!  So I had to print it all out again.  I know that our state received their form as they cashed the check.  The IRS form has no check which is why we did not know it was not received.  Being in accounting since I was 12 years old and I know how to appeal an accidental problem such as this so that there is no penalty – but the notice came with different instructions and I was not sure what was made by what part of it said.  Tried calling the special number for IRS on the form on Monday morning.  Now, I know that Monday is the worst day of the week to try calling – well, any business – as they get more calls after the weekend.  I also know that later in the day is better than earlier, but husband insisted that I call right away.  (An any business with a phone number which is open across the country until later so those on west coast can call – is much better to call later than earlier as, again, fewer people are calling later after business hours on the east coast and same across the county end. )  While I was setting up that evening to go on a Zoom meeting with our reenactment unit I tried calling again – this time I actually got into the waiting que.  I texted my husband – he was going to attend the Zoom meeting on his computer upstairs – what was going on and to explain to the other members if I suddenly disappeared.  The call was finally taken by someone from IRS and the matter of what to do to resolve it was solved.  It was mailed out certified mail on Friday – why did I wait for Friday?  I figured (correctly) that the Post Office would be empty the day after Thanksgiving as most everyone would be shopping.  

As of last night I had done most of the photocopying/scanning of the paperwork for the real estate tax exemption.  BUT – I received in the mail from an accounting client on the other side of the country an IRS notice she received on her income taxes (due last April of course and sent then – they must be way behind in processing returns).  I determined that the problem was my fault, though only an omission of a form, and I went to print out the form to send it to IRS.  It was missing.  I had used husband's computer (with data on my stick data drive) as his computer is newer than mine and the program needs same.  So I went to print out the page to send it to IRS.  The software was missing from his computer and we had to reinstall it.  Got the page printed out, wrote a cover letter and got it ready to mail to IRS by – again, certified mail.  I had planned to mail it out today, but the rain was so heavy will mail it tomorrow.  

I then went back to working on our real estate (partial) exemption paperwork.  I am missing about 10 pages I know I printed out (I have the other 2 pages, so I must have printed all of them) and will have to reprint that tomorrow.  Hopefully this will be done by the end of the week and we can bring it to the county assessor's office next week.  (I will take it in while husband waits in car – too crowded to park there and they have metered parking.)

That will leave the classes I need to take.  I have already picked out which ones I plan to take.  Some of the courses are required – a basic income tax class, a special class to meet IRS requirements for being a tax preparer (the longest of the classes),  and a class on ethics.  The other classes it is up to me which ones to take.  This year they have several 1 hour classes and I will take 3 of them.  After reading the course text book for each course I have to take (and pass) an online exam.  

While I have until the end of the year for these classes I can't put it off.  Husband is planning on our going with our reenactment unit for the Candlelight nights at the local restoration village (as volunteers) and he really needs me to be there with him as we are light on member volunteers this year.  (Whether it is a good idea to do this or not with Covid about as it is tiny space, I will not discuss with him as he REALLY needs to do the event.)  

And, of course, we have not put up any Christmas decorations outside or inside the house – yet!  Plus who knows what else will pop up?

TAX TIME IS HERE

 Well here it is again – tax season!  I am sure I have must have mentioned this, but just in case I haven't – I am an accountant.  Not a big fancy one such as you see in movies or on TV, but a small practice practice one.  To give you an idea of what I mean – a friend of mine was marrying a CPA – he said he worked for a small firm – the sort of companies which only have a bookkeeper to deal with keeping track of expenses, deposits, etc (keeping the books as it is called).  He thought he was working with clients like mine as his clients did not have full bookkeeping department.  I laughed and explained that to me that was a large company – if my clients had a bookkeeper  a set of books beyond their checkbooks I considered them a big company!

Over the last couple of decades my practice has shrunk – I am down to one business client (plus my husband and my craft business – which I do the accounting as the owner) and 4 tax clients - one of whom is a dear friend and I have to annoy her again as she has not filed a return in 3 years and will be losing her refund on the oldest return if she does not file that return by April 15 this year.  It is enough work for me to still be able to say that I am accountant and these clients, with the exception of my friend, have been with my father or my prior boss for decades and decades.  In one case I do a tax return for the daughter of one of my dad's old business clients – first work I did in accounting when I was 12 was adding up the payroll of her father for my father.  So the annual contacts between the clients and myself is a good deal of catching up the year that passed on a personal level.  Oh, one client died last year.  His son/executor said that I would still be doing his return this year – but I have not heard from him and am guessing that his accountant will be doing his dad's final returns.  That cuts down the number of clients I have by one.

I have finished one return so far this year and I am good way along with a second return.  Still waiting to get the info for the third return – and of course my friend needs a bit of pushing (why should she lose out on her refund).  Somehow with the pandemic – even with keeping me in the house most of the time – it is harder to do the returns these years.  I have also done the business client's return – it was due by March 15 not April 15 – and started on our business return.

What does this have to do with organizing?  I have to fit all of this into my schedule in addition to everything normal I do.  I have to get the returns done on time – which means early enough for me to mail the returns to clients and allow them time to review the returns and mail them out in a timely manner.  

THOUGHT OF THE WEEK -
DON'T wait until the last minute!  Get your taxes prepared early – you can always hold until the last minute to mail out.  (If you need to – find out which Post Offices near you will be open late on April 18 and will postmarking the late mail  - yes, this year one has until the 18th to file their taxes. When I had a lot of clients, inevitably, several would need to file extensions and my husband would drive me late on April 15 to that post office and sit outside in the car as there would not be any parking available due to people filing their taxes at the last minute – my dad always said that at the main Post Office in Brooklyn employees would be outside with sacks for people to drop their taxes into, so they did have keep the actual office open late.)

When going late on April 15 to mail out I have seen any number of people standing in the Post Office filling out their taxes forms leaning on the walls as they are that late – don't let that be you!

WHAT IS NORMALLY DONE OVER 5 MONTHS ALL HAS TO BE DONE AT ONCE INSTEAD THIS YEAR!

 I have been using up my time finishing up the renewals for two organizations I am in.  Normally our reenactment unit renewals are due at the beginning of the year – our national organization needs (wants?) their renewals to them by March 31st and my embroidery chapter renewals are due to our national organization and our local region by May 31st.  Throw in tax season which normally ends on April 15th and there is a lot – but the various parts of what I need to do is spread over 5 months.

This year the national of our reenactment unit decided it was a good time to update their membership system, so their renewals are due – of course – May 31st.  And as any of you in the USA know – tax season was extended to May 17th.  People being how people are – just about everyone puts off renewing and/or filing taxes until the last minute – so late April and May has been overwhelming.  

The taxes were finished and out on time to the clients – except one client asked for an extension – he always does.  But the dues collection and submission have been running behind.  As of today I have heard from 3 of the last 4 people I needed to speak with (combined from both organizations).   So tomorrow I will be able to do the paperwork for one group and hopefully will hear from the last person, so I can do the paperwork for the other group.  

I am treasurer of both groups, and membership chair of our reenactment unit.  I took on the membership chair position as it is easier for me to collect the dues and paperwork than have someone else do so and get it all to me – as the unit is relative quiet with no meetings or events when normally the renewals are taking place.  My embroidery chapter has a membership chair and normally she would be going after members for renewals and collecting the dues – but this year (and last year) due to the pandemic and no face to face meetings it has been easier for me to collect the dues and have them mailed to me – or she would first have to do that after all was mailed to her.  

When I get all the paperwork for both groups and mail it out – slightly late for both – I will be very happy that it is all finished and take a deep breathe.  The client with the tax extension will contact me about actually doing his taxes in late August to early September – as he does every year.  

Of course life does not stop for all of this – I am still doing the housework, checking and paying bills, cooking, laundry, and so on.  And, as I mentioned  last week – we have been getting our RV ready to go out after sitting for almost 2 years (problems with it stopped us mostly from traveling in 2019 also).  

This Friday we are taking the RV to an authorized shop for its generator.  In addition to needing its normal oil change – they have to figure out why it does not start.  They charge US$160 an hour.  We are hoping it is something simple – such as the fuse is out of place or the fuse needs to be replaced – when we go there the bill always seems to be huge.  (Normally we take our RV to our dealer in another state for the oil change as it is much cheaper and they don't add on other things we didn't need and don't put in too much oil so that it does work right.)

But after posting so late last week – I was bound and determined to post on time this week!

THOUGHT OF THE WEEK -
What needs to get done, somehow gets done.   One must figure out how to do so.  Figure out which needs to be done first and do it, even when everything needs to be first!  Then do everything else.

BOY MY MIND IS FRIED THIS TAX SEASON - WHAT WILL HIT NEXT?

 Okay, as I just added to last week's post which apparently – though I remember posting it – was never posted and has been sitting as draft.  

For some reason I seem to be getting hit a lot lately with crazy things.  As I have mentioned I am an accountant and it is, of course, “tax season”.  As the daughter of two accountants I grew up with tax season so I am accustomed to dealing with same.  I was helping my father making photocopies when same was relatively new in the 1960s – to give an idea of what I mean – First the original and the paper to be copied were run through a slot in the copier where the original was copied onto the paper.  Then the 2 papers came out of the machine.  The copy (and, yes, sometimes we ran the original through by mistake and that was a mess) was then inserted into a different slot in the copier where it was run through the chemicals to make the printing appear on it and fix same to it.  The copies came out wet and had to be hung up to dry – and it all smelled terrible.

I am down to a handful of clients who I prepare individual tax returns for and even less business clients (and two of those are my husband).  The clients I have are mostly my dad's clients, (dad having passed on some decades ago) some started with him in the 1960s or 1970s. The returns are fairly straight forward as they are all retired long ago – nothing to tease my brain.  So while preparing the tax returns takes time and I have to make sure that I have all the info from each client, it is not a brain busting matter to prepare the returns (add instructions, etc.)  

I belong to an embroidery chapter of a national embroidery club.  I serve as Treasurer of same.  The renewals for this organization are due by the end of May, so every year renewals overlap tax season – but I am used to this by now.

So far, so good.

I am also the Treasurer of our reenactment unit. This is not normally any sort of problem or situation during the main part of tax season as dues to our national organization from members,, as well as the dues to our unit, are collected in January and February and the dues to the national organization must be mailed by me to them by March 1.  This year, however, the national organization decided as long as things were quiet due to the pandemic – it was the time to redo their membership records and how they are managed on their end.  As a result they pushed back renewals into later in the year – yes, they are also due the end of May.  But to make things a bit easier, since our unit basically did nothing, the board voted to roll over paid dues from 2020 into 2021.  So only those members who did not renew with unit in 2020 have to renew now with the unit and only those members of the unit who belong to our national organization (and we do not require members to belong, so only about half of our members do) have to renew now.  

I have been working on tax returns – have all done except one friend who always files late (years late) and one client who always asks for an extension – and our return, of course, though our return is actually almost finished – I need the mileage on our car odometer to calculate business use of the car last year and we will get our car back on Friday.  

Forgot to throw that in – our car has been at our mechanic for over 2 months.  He actually gave up early week and husband went looking online and found the same odd problem we have and what people did – so the mechanic was finally able to fix it – but two months ago I did not think to take the mileage off the odometer and will not have it until we get the car back this Friday.  

I went to file extensions for the client who needs them while I was still waiting for information from the other clients last week.  I found out that the tax software I am using has a problem with our state and the forms are not fileable (my practice is too small for me to be able file for clients online).  So, I have had to take the copy of the return as I get it from the software and then fill in the state forms by hand to be able to use them.  This did not happen with a return I had to prepare for a different state so it is related to this state's returns not a general problem.  This was not a big deal, but it did take more time.  

I had to send a couple of weeks ago emails to both organizations for renewals and I am currently waiting for the renewals to trickle in from both groups.  

It doesn't matter how much I have systems for getting things done on time when things go awry elsewhere.  Plus of course – Easter and Passover dinners for husband and myself, as well as husband's birthday.  This is one heck of a spring for me, and I have to work hard to juggle it all this year.  

THOUGHT FOR THE WEEK -

Chances are that whatever one's plans are and how well they are organized something will go wrong.  Hopefully nothing goes wrong in a major way that cannot be adjusted for.  The comedienne Gilda Radner used to say on “Saturday Night Live” - “It's always something.”  

Oh, did I mention that our shower drain is backed up and we cannot use it until we clear the pipes, we still have to figure out what to do about the poison ivy in the backyard that we ignored last year and it grew all the way from the back of the house to the front – including onto the house, and we could not mow the backyard due to same and still have weeds the size of trees back there...

COVID 19 #20 - DEALING WITH COMPANIES AND TRYING TO CHANGE ONE'S MAILING ADDRESS WITHOUT GOING OUT

 Do you find days and weeks are flying by since the start of the pandemic – or inching their way along?  I tend towards the former.  When I realized we would be stuck in for quite a while, I figured I would finally get a chance to catch up on organizing and cleaning.  Have I?  Well, it inches along.

When my family home was cleared out (I admit to doing much less than my sisters and their families in this process) I ended up with the assorted family papers – my parents' old income tax returns (back to the 1950s), the papers related to the original purchase and building of the house, my dad's military papers, plus papers of mine – what was left after what I had taken when we were married – from the 25 years plus that I lived in the house.  I have a cardboard file box of the papers in our office, next to my desk blocking easy access to our office supply closet.  On top of the box is 2 old photo/scrap books of mine and several old shoe boxes of childhood correspondence with friends and cousins who had gone to summer camp and others – and shortly after this all came here, the least of the papers were pulled out on a quick go through and shredded (lots of greeting cards – kept those from certain family members, close friends from back then and husband).  

I finally got started on dealing with the papers.  Combined with the fact that one of my fingers has started to hurt – I think from overuse of computer keyboards, husband thinks arthritis – I have been trying to use the computer less this past week than usual.  But scanning, I can do with little typing on the keyboard and using a different finger for the thumb pad I use (instead of a mouse) so I started going through my parents' income tax returns and scanning them.  Why am I scanning them instead of tossing them?  Well I was going to toss them out, but in the back of my head was my dad, the accountant who trained to me to be one - “Always keep copies of clients' income tax returns for the time they are clients plus 10 years.”  Mom is still alive and I guess sort of a client.  But that it a lot of paper to keep.  So, scanning was the way to go. I have scanned in all of clients (and our) old tax returns – keep them and they take up no physical space.  (I now scan the clients returns as soon as the return is done, but keep the most recent year on paper to make it easier to refer to them when doing the next year's return.  As soon as the next year's return is done, the older year is shredded.)  

I have basically always known (well back to at least my early teens) that one's tax returns is a record of one's life.  Marriage, children, divorce, death, buying a house, college for family members, losing a job, getting a new job, etc. all show up on one's income tax returns.  I am seeing it now as I go through and scan my parents return.  I was confused when I noticed that on one of the returns my 2 younger sisters were showing as dependents and I was not.  The middle sister of the 3 of us married before I did – shouldn't there be returns with me as dependent and her not there?  Oh, wait, I had started my full time job that year and was no longer a dependent even though all 3 of us were still living at home.  The returns in the years shortly before my dad died are filed on extended extension with the notation that “taxpayer has a major illness which is delaying him from filing the returns”.  (Extensions were granted of course.)  I know that as I go back further I will see each of the three of us daughters show up on the returns.  Going forward (unless my sister kept the more recent returns) I will see the return change from joint to just mom when I reach the year after he died.  

Also in the file box is various papers I wrote in high school and college.  For some of them I find multiple copies – not sure why.  I have learned that as bad as my hand is, it used to be a LOT better as was my typing  I also seemed to write doom and gloom a lot more.  I will scan in the best copy of each of these papers after I am done with my parents' income tax returns.  

I find that I can scan 2 -3 years of tax returns in an afternoon (while also checking email and other things which have to be done in the office in the closet).  I will keep doing so for now.  If nothing else, the shoe boxes will be fit into the file box at some point.  At least I feel like I am getting something done by doing this.

The other project I have been working on is changing the mailing address for us, our business, our reenactment unit, and my embroidery chapter.  I am guessing I have mentioned that we have a Post Office Box that we use as a mailing address due to problems with mail delivery at our house that developed 10 or so years ago.  This PO Box is at a different Post Office than the one which serves our house – as this Post Office is much closer to our house (as is a third one) than the one which serves our house.  There have been problems with mail forwarded to the house – not sure if problem is the Box Post Office, the house Post Office or something in between.  (These problems predate what is currently going on with cutbacks etc at the Post Office and are not related to same.)

Most of the problem at this time involves statements from the two credit unions we and/or the two clubs I am treasurer of have their bank accounts at.  Last week I telephoned the two credit unions and changed the mailing addresses to our house.  Well, almost all.  For some reason one of the credit unions could change the mailing address on our personal accounts – but I was told not the mailing address for the embroidery chapter – it is a “business”.  I have to go there in person to do so – ummm, there is the Corona virus pandemic going on and we are still are suppose to stay home?  I am missing 3 months 3 months of statements for each account – the other credit union is mailing me copies – free.  This credit unions wants $5 a statements – though there would be no charge if I – yes – came in and asked for them.  The alternative I was told was to open an online account for the chapter – so easy and convenient to do.  I discussed with husband and president of the chapter and went to set up the online account.  First problem I had was that the online form rejected the chapter's Federal ID number (same as a Social Security number for people, this is for businesses).  I tried putting it in the format IRS uses. I tried putting in the numbers with no format.  I even tried putting in the numbers in the format used for Social Security numbers – each several times – and it did not work.  The next day I telephoned the credit union and was told to put the number in with no format – somehow this time (as opposed to the 5 times before) it worked.  I finished the form and “signed” it and sent it off.  Hmmm, now what do I do? No way to sign into the account.  I sent an email – answer was that it would take several days for it to be “approved”.  Okay, why didn't it just say that on the form and I would have known!  Last Saturday when I checked email I had two emails that the online account was approved – yippee.  I copied the username from the first email and then went to copy the password from the second…. Ummm. They sent an email at 8:15 pm on a Friday night which was only good for 30 minutes!!!  Okay, it said I could get a replacement email.  I fill in the form – needs the telephone number associated with the account – I put in my telephone number.  Rejected – not the right phone number.  Try again several times.  I opened this account before cell phones were common and I did not have mine then, also there were no google phone numbers (have one now for the chapter), so what the heck other number could it be?  I tried all of these numbers anyway – also a google phone number we have for ourselves and a VoIP number has for his counseling practice – none of them worked.  I called and left a phone message at the credit union asking for help.  I also sent an email.  Monday – no one called – I called again and sent an email again. The idea started to mill around in my head that I used to have another landline phone number that I used for my accounting practice, but got rid of about 10 years ago – I looked back in my computer files to find something with the number – old letters with number in the letterhead. I tried same – no good.  I understand that businesses are shorthanded – but it has been 3 business days.  Late yesterday I called the credit union for a regular person not someone related to online help.  The man who answered was able to change the mailing account for the credit union when the other employee could not.  He had to verify me and told me that the other employee probably did not want to bother (took all of 5 minutes maximum).  He verified that the phone number on file is our home number – which was rejected.  Today I had an email from the bank finally – giving me the phone number for the account – again, our home number which was the first tried and rejected multiple times.  I do have to wonder if they wanted the phone number to prove who I am – why they would email it me.  This credit union used to be great.  They have been changing since the end of last year and not sure that any of the accounts will be staying there after Covid-19 is dealt with and we can safely and easily go out.  They changed their bank statements.  As an accountant I have dealt with thousands of bank statements from banks in about dozen US states plus from 3 other countries – and have never had a problem figuring out something as simple as their bank statements.  

So little by little I am trying to get things done which have been sitting or have arisen from the current situation – I did manage to rearrange my empty plastic containers which are out to use right now and stored some in my kitchen closet on a shelf in case they are needed.  (So much work to pull out the plastic boxes the spares are kept in, in the bottom of the same closet.)

THOUGHT OF THE WEEK -

One has to deal with emergencies first.  Then one can slowly work at other problems.  Scanning and shredding 2 or 3 years' worth of maybe 50 years worth of income tax returns is not much – but that is 2 or 3 less to deal with.  One step at a time – same applies to calling up and changing the mailing address on everything that has our Post Office box address on it to our home address.

COVID 19 #5 - ANOTHER WEEK IN THE HOUSE - TAXES, MAIL AND RAIN

Normally the last few days would have been busy ones for me as I am an accountant.  I would be finishing up the tax returns for my husband and myself and our business – they are always done after I finish the returns for clients.  I would be preparing and mailing out extensions for those clients who did not manage to get their information together in time.  And I would be looking forward to some quiet time to catch up on what has been thrown aside due to lack of time.

This year is so different.  I am down in general to less than 10 clients, but even so this year, well, I have barely done any returns.  Clients have contacted me that they can not wrap their minds about putting the information together, not going out so they cannot mail me the info, etc.  I tell them that it is not a problem – quite frankly we are not going out either and their completed returns would be a problem to mail to them -we can only put letter sized envelopes in our house mail box for pickup by the same postal employee who delivers to us, as when I tried to put larger envelopes in the clip – they fell inside the mailbox when I closed the front door of it (which they were clipped to).  So I have two 6inch by 9 inch envelopes sitting in the house until we feel safe enough to go to a mail collection box and send them out.  

I have a dear friend who is also a client and had not filed her 2016 return (her husband was ill and they had also moved) and that was a priority for me to get finished and out.  I knew she would be getting a refund and if returns are not filed within 3 years of their due date one loses their refund and I did not want that to happen to her.  I kept reminding her by email and telephone – but suddenly it was this past Saturday and I still not have her information – too late to mail the return to her even in the best of the times as she lives out of state (which is where she moved).  My husband caught her on Facebook Saturday night and reminded her.  I received her information on Sunday and did her return and emailed it back to her with specific instructions – in my panic and excitement to get the returns to her – I sent the wrong version of her Federal return – it was blank!  She telephoned me and the correct one was emailed to her on Monday.  Another client had her info to me earlier in March and her state was not extending the time for her to pay her taxes, so I finished it and mailed it to her back then. 

I managed to fix some errors in our corporation's  last year return, when I was going through the “do everything wrong and redo it no matter how I tried” period.  It is ready to go out when we go out to mail larger items again.  I am now doing this year's return for same.  Next I will start ours.  All will sit and wait for us to go out again.

We actually had a problem with the mail which goes to our PO Box – most of our mail does as we have problems with mail delivery at our house.  We had put in to have it forwarded to us as March 31.  Nothing has arrived which has been forwarded.  I called the Post Office on Monday and was told that since our box is in our business's name only mail from same has been forwarded as there is no way to say to forward all from a business box.  Husband started crying – the employee heard him and said she would put what she has in an envelope and mail it to us – it came the next day.  She said we could call again in a couple of weeks and make arrangements to pay the postage and have same done again.  What does confuse me is two things.  If a company moves should not all the mail addressed to the employees of the company, even if the company is not listed in the address be forwarded also?  And on the USPS website it says that if a business puts in a forward all will be forwarded to the business and the business is responsible for getting it to those who receive mail through them – doesn't that mean it should all be forwarded to us?  Well, we got the large, full envelope and I will get to take them out of the sealed plastic bag that I put them in, this Friday as we cannot wait a full week for 2 week old mail to be opened.  The community where our mail goes (just north of where we live) had over 4 times the number of virus cases as does our community so it really scares husband to go to the Post Office, even late night on Sunday nights as we had been going.  When life is normal again we will find out how to change the box from our business name to our names so next time we can specify “all for address” if God forbid we ever have to do this again.

We also had to deal with a bad storm this week – heavy rain and huge winds.  Not as bad as those of you who got hit tornadoes, and we were lucky and only lost our electricity for a few seconds.  Husband was terrified, as he always is, of losing our electricity, as to do so would result in the loss of much of our food.  I moved everything from the kitchen refrigerator's freezer to our spare small freezer in the basement and turned that one to the coldest it goes and added some frozen plastic “ice” also.  Our logic was the larger the amount of frozen items in a confined space, the better the cold would keep if we lost electricity.  I also found out that we still have some Thanksgiving leftovers – more food, which we did not remember we had, a dinner for one of us.   

How are all of you faring in lock down – or are a some of you in areas which have not been hit enough to have stay home?  I would love to hear from any or all of you – and I am sure that others would like to hear how people are getting by and coping.


THOUGHT OF THE WEEK -

We are another week along and closer to being able to go out again.  In our state and our local area they say we are now at the point where the number of new cases and hospital admissions are both going down – more people are now leaving the hospitals than being admitted.  My original guess when the area was hit was mid to late May before we could go out. I hope I guessed right. 

My best wishes for you and yours to remain healthy – or to safely return to good health. 

I GOT A TAX REFUND SO DID I PAY LESS THAN THE GUY WHO OWES MONEY ON HIS TAXES?

Well, so now we get to income taxes.  Since I am in the US this post is specific to same.  None of this should be considered accounting/tax advice as everyone's situation is different.

I want to explain the difference between what one's tax is and refunds/amounts due.  I want to do this as I have found a lot of people don't understand the difference.  This came up recently on (of all things) a discussion group about a comic strip. 

In a prior discussion I mentioned that under the new income tax laws that came into effect last year (for 2018 income taxes filed in 2019) I had a client who had a low enough income (US$35,000) that they had not had to pay income taxes for several years and under the new tax law they had to pay income taxes.  Someone posted back to me that I must not be a good accountant as his brother in law always gets a large refund so the people that I wrote about should also have gotten money back.  I posted back to him explaining that having to pay taxes is not the same as whether or not one gets a refund.

If one works for someone income (and other) taxes are subtracted from one's salary before one gets paid their net taxes.  One's employer will is required to withhold these taxes from your salary and pay them to the various tax authorities for you.  In addition to Federal income tax and Social Security/Medicare taxes, different US states have different taxes that have to be withheld – some states have their own income tax, some cities or other municipalities also have their own income or other taxes, then depending on the state there may be other items that are required to be withheld from your income some examples are – unemployment taxes, disability insurance, family leave insurance, etc.  These are not taken out of your income by the government  (as someone else thought on a different group that I am on - “The state did not take enough income tax from my salary and I had to pay the rest”.  There are charts – when I started they were all printed charts, but now that may be part of a payroll program or other software – that tell employers how much to withhold and for what depending on one's income.  

Now these amounts are based on what someone making making that income for the number of people they say are their dependents and their self (and if they are married filing jointly, married filing separately, single or an unmarried head of household  who use the standard deduction will owe for income taxes at the end of the year when they file their return.  It does not take into account any other income the person has – if one is married and filing a joint return the fact that the other spouse also has income and when the return is filed the two incomes will added together and raise the total amount  on which taxes are being paid so that one will owe more,, is not taken into consideration – nor is high itemized deductions, as well as other factor which affect one's tax for the year when the return is filed. 

If one does not work for someone for wages they also have to prepay their income taxes in quarterly estimated (as in I estimating what my income tax will be) taxes which serve the same purpose as withholding taxes  - the person is paying the estimated taxes to the government(s) themselves instead of their employer doing so.  Sometimes one has to pay estimated taxes in addition to the amounts withheld by one's employer if one normally owes taxes when they file their returns.    Follow me so far?

Now these amounts withheld or paid as estimated taxes are amounts that you have paid in anticipation of what your actual income tax will be when your return is prepared.  They are just advance payments on your taxes. 

Person A (using ridiculously small numbers) had $1000 withheld from salary for Federal income taxes. 

Person B had $2000 withheld from their salary for the same amount of income for same.

Person C who is self employed has paid estimated taxes of $500 towards their income taxes on the same amount of income.

Person D who is also self-employed did not know that any estimated taxes had to be paid  and paid nothing towards his income taxes in advance. 

Then it is time to file income taxes. 

All four people in the example calculate that their income tax is $1000 – which is a relatively low amount, but let's not go into large numbers or this will seem like school.

Person A has paid their income tax in full with their withholding and exactly (very rare in real life) and owes no more income tax and is not entitled to any refund of their withholding taxes as their tax is $1000 and they had $1000 withheld.

Person B overpaid their income taxes as they had $2000 withheld – perhaps they itemized and had more deductions than the standard amount.  Person B is entitled to a refund of the $1000 they overpaid  - $2000 withheld less $1000 tax actually owed results in a $1000 overpayment to be refunded.

Person C underpaid their income taxes as they only paid in $500 in estimated taxes and they owe $1000.  Person C has to pay $500 in additional taxes as they did not prepay enough in estimated taxes.

Person D since they have not paid anything towards their income taxes owes the entire amount of $1000.

Does that make sense to you?  All four people paid the same exact amount of income taxes  it is just when they paid it that varies.  So someone who gets a refund may actually be paying more in actual income taxes than someone who owes money at the end of the year – or the same amount as the other person or less than the other person.  It is the actual amount of income tax- and not when one pays it that sets what the tax is for that person.   So if you have to pay taxes and the person next to you at work (or your friend) gets a refund that does not mean that their income taxes are less than yours – they may be paying more in income taxes than you  - or the same or less  -  the amount one owes or is due as a refund on their income tax return does not say how much tax the person owed compared to you.

Now this is all a bit simplified – if one underpays one's tax one may owe penalties or interest for underpaying their tax – one has to have prepaid 90% of their income tax or will owe same unless, in most cases,  the amount they paid in advance is equal or greater than the amount that their income tax was the year before. 

Oh – and if you overpay your tax on purpose  - remember you have made an interest free loan to the government as they have the use of your money from when you pay it to them (by withholding or estimate) until they refund the amount they owe you.

THOUGHT OF THE WEEK -

It is the amount of income tax one actually owes in total, not the amount one gets as a refund or one owes when their income tax is due  which is one's actual income tax for the year.

ARE YOUR FINANCES - CHECKING ACCOUNT - UNDER CONTROL?

Boy has my financial juggling gone astray today!  We live on limited income from a variety of sources and sometimes we have a timing problem (bills due out this week, money coming coming in next week type of thing).  As an accountant I am pretty good at this juggling. 

I had it all planned out.  We have dividends coming in on Monday which would cover almost all of our bills due out in the next week – except our RV payment and that is due out this week.  I knew that later in February we would need to take money out of husband's IRA to cover our car insurance, but had time until same. 

Well, the money to cover the RV payment was to come from the monthly client I have and she pays me quarterly when I go and do her books, etc. and I was due for a check in January.  I tried to go to her last week, but when I called on Monday she was going to the doctor on Tuesday and did not expect to come into her place of business on Wednesday or Thursday either – maybe Friday she suggested?  Friday it actually was suppose to be nice weather here and in Pennsylvania and husband was ready to go to Pennsylvania for the day and I could not disappoint him – who knows when the weather would be right in both places again as it has been so long since they were.

So I said that I would be in this week.  I telephoned her on Monday to go yesterday, Tuesday, but she still was not feeling well so today, Wednesday it had to be.  In addition to needing to do her bank rec, payroll taxes have to be filed by the end of January so I had to go there now!  I was glad that weather stayed nice and no snow or rain.

I planned last night to deal with my problem – I wrote out a deposit slip for her check.  I checked where  branches of our bank are near her. I checked where a post office was near her.  My plan was that when I finished doing her books I would take the check from her, deposit and mail out the RV payment. 

When I got there she had a bad month and not only could not pay me, she could not pay her rent either.  I did her books.  I had her sign her payroll tax forms.  I dealt with a couple of problems she had which are not related to what I am suppose to do, but I do things for her – she is in her 80s. 

Well, I have my check – but cannot deposit it until she calls and says okay.  I need to get that RV check out tomorrow, so we will have to go and take the money out of husband's IRA now and hope that she says I can cash check when the bills that were to be paid later in February with the IRA money come due.   Just when I think I have it all taken care of….

I am sure that all of you have had similar problems.  The important thing to do is keep track of it all – accurately so that nothing bounces – and if there is that rare occasion that something goes wrong and it does bounce – both the bank and who you paid will look at your records and say “hey, this never happens with you – of course we understand and will waive the fees for the bounced check/late payment”.  (Yes, I did mess up badly once a few years ago and the fees were waived by both by the bank for the bounced check and by the company I had paid with the check as our record was so good that they could excuse the one error.)

To help keep my records accurate I use a software program to help me – Quickbooks (Quicken it's non- business alternative is good also).  I keep my checkbook by hand and also in the program – and the two of them better agree or I have a problem to look for.  The software lets me memorize the payments and when they are do and will remind me when I open it what bills need to be paid and what money should be coming in.   It also lets me keep my personal expenses separate from our various businesses and each of them separate from the others.  Lets me set up accounts for our tax related expenses and income to keep track of them for the taxes when they filed the following year. 

THOUGHT OF THE WEEK – Now is the time to get started so that next tax season will easier for you to deal with your income taxes (presuming that you are in the US and need to do so).  It is also a good time to start keeping better financial records in general as we all need to do same and it is easier to start with the start of a year than in the middle of it.    

STILL TOO MUCH NEEDING TO BE DONE

That was a short week!  We have taken mom to two doctors in the past week.  One was a happy checkup with the doctor who replaced her pacemaker.  The other was a not as happy appointment with the doctor who did cancer surgery on her.  There is still some cancer and we have to take her to an oncologist.  Treatment recommendation by this doctor was based on mom's age – 90 – and the fact that it is a slow growing cancer.  I should mention after complaining about another doctor's office, both of these were great with helpful staff and no hours of waiting.  We still have to take her back to the doctor about her leg scan (the one with the awful office/staff setup) and then there are about another 4 doctors she needs to go to.

In between these appointments I have been trying to get our senior real estate tax exemption worked on and I should have all or almost all of the paperwork I need.  I will have to check each section's numbers against the paperwork for it and we have to copy all of it and I do so with a page that has our names, the section, block, and lot number of the property and the year the papers apply to written at the top (with the computer).  This page is put behind the items I copy as I do so that so that the finished copy will have this info at the top in case any pages get separate from the others – I am glad I have a heavy duty stapler that staples thick stacks of papers as there will a lot of papers.  I have already done our 1099s & similar and our medical expenses.  I have to mostly deal with our businesses expenses – I will do the joint expenses first (car expenses and some other ones have to be split between our two businesses and also from personal use), then husband's business as it is easier and finally my business. This has to be there before the end of December and I figure the earlier the better.  I was getting all this done quickly and early when I found out that they had added need for proof of business income and expenses. 

I also have to renew my permissions to prepare tax returns from Federal and state governments.  Federal mailed in already and I did the state application online – the only way it can be done.  I still need to finish the required tests for the Federal paperwork.  One test for 1 credit done, 19 more credits to go.  It will be done – it only one test for 6 credits that always concerns me as it has a time limit. 

I have still been heating the paperwork from my family home in small groupings in our PackTite heater (for bedbugs).  I found out that among the papers my sister gave me is my parents income taxes – back to the 1950s as well as the papers related to the purchase of the house back in 1958-9 and my dad's release from the military paperwork.  I commented to husband that I know their old taxes are no longer needed and I should just check through them and shred them – but – dad always told me that one keeps copies of client's taxes as long as they are clients and then at least another 3 years, so by that logic I should keep them.  I have discussed it with husband and will scan them into the computer and shred the originals. 

I got behind with the laundry last week – it was done, but not all was folded or put away, so I had to do same tonight before I started this week's laundry – first load is in washing now, when the ringer in cell phone goes off, I will go down and switch to dryer and put in another load to wash.  Just happened – will be right back – feel free to talk among yourselves until I do.

Back again. 

As I have mentioned in the past year, I have been having a problem keeping track of papers – something I have never had before.  In October our reenactment unit had an event.  I know and remember that the unit commander (club president) had asked me if I had brought the checkbook – which I didn't as it is safer to keep it home. Since he did, I assumed that he had given me a bill for something for the unit to reimburse him for.  ¾ of the way through the day it had started raining and we along with most members had brought their stuff inside our headquarters building and then at the end of the day I had brought our van back to the area where we had been setup and we packed it quickly to avoid getting things wet.  Two days later I started looking for the bill that I had to reimburse the commander for.  I could not find them.  We did not actually bring the stuff in from the van until the end of that week.  I went through everything again and climbed under the seats in the van looking for the bill.  Husband than threw another thought at me – at an event the unit did in September the place wrote the check payable to the commander personally instead of to the unit – and husband said that what I was remembering was probably the commander giving me his check as we had told him to deposit the check and then write the unit a check.  So was I missing the bill to pay him for?  The check he gave me for the that event?  Both?  A week in I had written him an email explaining and apologizing and asking him to let me know how much the unit owed him.  (I did not mention the check he owed the unit.)  He did not get back to me.  I have been “sick” with the idea that I lost a bill to pay, as well as maybe the check he wrote to the unit.  I brought the checkbook to the meeting this past Monday to settle up.  Whew! Nothing was lost.  He had asked me about the checkbook in reference to another matter that did not materialize and he told me that not only does the unit not owe him money, but he owes us the money from the check that he deposited.  It was a wonderful relief to know that I had not been careless and lost neither bill nor check. 

I have to complement and thank my husband.  He has been insisting on helping me with my mom and the doctors.  My mom is well, a 90 year old opinionated woman who does not hear well.  (One of the doctors we still have to go to is for hearing aids – but the other doctors are more urgent).  He has been wonderful with her.  One advantage to having him along is that he speaks “medical” and can talk to the doctors on a different level than mom or I can.  (He was the head of a mental health agency and had doctors working under him.)  He understands what the doctors are saying better than either of us and knows when and how to ask questions.  Part of why he comes is I helped with his mother when she needed same (although his sister handled the medical and I handled the financial), especially since he butted heads a lot with his sister and mother over how things should be handled, so I sort of ran interference by going while he was at work to help her.  Part of it is he does not like being home alone.  Part of it is that he know he can help a lot. 

We still have not really done any planning for (American) Thanksgiving.  Since he has become lactose intolerant (or so it seems) since last year, two of his favorite dishes may not be made for him, especially since I like neither – pumpkin pie and Colonial Williamsburg Sweet Potatoes (no marshmallows, of course).  The former uses evaporated milk and the later uses regular milk –  1/3 of ¼ cup of same (original recipe for 3 lbs sweet potatoes, I make him 1 pound).  We will see.  We are debating if I should make the vegetable soup that I used to make for the family for Thanksgiving dinner – I figured out how to cut it down and make ¼ of the amount of soup I used to make or even 1/8 of same, but it is one that we like and gets better reheated.  (I would make the entire recipe and reheat over the winter, but it has potatoes in it and they do not do well with being frozen, so I need to cut it down to what we can manage to eat without needing to being frozen to keep long enough.)  The alternative is to make a different Pennsylvania Dutch soup called Chicken corn soup.  We will see which he prefers.  Our normal menu was the Vegetable soup (cooked on the day before Thanksgiving as it takes a while to cook), turkey of course, stuffing, mashed potatoes, green beans, the sweet potatoes, and gravy.  I did not cook the turkey as husband liked it better from a commercial oven – he says it is crisper.  When we started (I had never cooked a turkey) we found a local place that cooked turkeys with a hot pick up just about when we needed it – my sister and her family would stop and pick it up on the way here for us.  Three years ago we had run places to go to for Thanksgiving dinner for just the two of as we were no longer having family in for same, and I had to cook the turkey.  I did so and it was fine.  The following year I cooked it from the same place following their directions and it did not cook through, we ended up cutting off pieces and cooking them separately.  I figured out that the packaging had 2 different temperatures and I must have used the higher one first year and the lower one second year.  Last year I used the higher temperature and put the turkey in upside down and turned it over part way through and it was cooked through and I will remember to do so this year again.  In the old days there would have been the pumpkin pie and I would bake an apple pie and Venetians (rainbow cookies).  No need for so much dessert for the two of us, especially since neither of us should be having same at all.  

(And I will have to find time to post the night before while I am generally cooking.)

THOUGHT OF THE WEEK -

As it says in the “Hitchhikers Guide to the Universe” - DON'T PANIC!  Things seem to work out in the end.  We managed to get the appointments we needed to get right away for mom.  The real estate tax exemption will get done and in on time.  The exams will be taken on time.  Laundry will be caught up tonight.  The missing papers were not missing.  Thanksgiving dinner will get a menu and will be cooked. 

WORK, FAMILY, CLUBS - ALL ARE TAKING UP MY ATTENTION

Okay, so now I have to work on getting things done - not all house things - mostly work, family,  financial, and club things. I got a fortune cookie today that said that my problems are behind me - if only I believe it.

Work - I went to the client that I go to monthly.  She was charged a large amount for fees by her credit card processor and she had no sales.  I telephoned her processing company and they gave me a breakdown that sort of made sense, but did not.  What I was told the fees were for do not match what I have been told in the past about the annual fee she has to pay (due to low sales and this being a crooked company that she says she will switch from, but does not).  A friend of hers (she is in an indoor, open market area and this is one of the other vendors) came by and said that she has to fill in a form with the processing company (and Mr. Expert does not use the same company) and then they will get rid of one the larger fee.  I called the company again and they  then said that I had to call the sales office for more info.  Her salesman who should be who she talks to about questions disappeared in 2016 about two months after she signed up this company.  So I am trying to reach their sales office - either no answer at the extension I need or it keeps ringing.  I looked up the company name on line that answered and not only is not the company she signed up - it seems to be a “use an electronic device for card processing” company not one that uses the card reader she has.  I will keep trying.

Mom - since I have been less helpful with going through mom’s house, I have been put in charge of taking her to 4 doctors she has to go to.  Husband insisted her wheelchair will not fit in our car (and she cannot climb into the van).  I pointed out to him that if I went without him, it would fit as I could drop the back seat down for more room behind it.  In the meanwhile, my sister explained that the wheelchair comes apart to fit in a car.  I have been waiting for husband to set on when we are going on a trip - still a short one and probably to PA again - so I can make appointments for mom.  Today my sister called - mom had to go to the emergency room due to leg muscle spasms.  Now she will have an aide 24/7 for 3 days due to the medication - so I am putting off calling about the appointments until next week (or the week after if we go away next week) so I know where we are with her going out. I called her Medicare supplement plan to see if they would cover the aide, only if Medicare does - so, no, they don’t

Work, again - I have a tax client who has me put his tax return on extension as he goes south for the winter.  Normally he will contact me the start of September to set up an appointment to do his return.  He sent an email  - can we meet Monday?  Have to find out from husband if we are going away next week or not - he seems to be leaning towards not as it is suppose to, yes, rain.

Family, again - husband this time - husband has been having problems for several years finding the clothes he likes.  As a result he is low on presentable clothing.  Now that RV is finally working correctly, he needed something else to obsess about.  Underwear - it seems that it cut with a lower waistband and is too low for his to be comfortable in and falls down.  Then again, his old underwear falls down also - I am going to have start sewing new elastic in the waists.  Some of his shirts are so worn out that he can be seen through them.  When he complained a week or so ago, I made him go to the outlet of the company whose shirts he likes - they are short sleeved which I figured would make it easy - but he found most of them to be “too heavy”.  He got 3 shirts - which have to be washed so he can wear them.  We also have been going to various Walmarts as he found shirts in another fabric he liked, looking for what colors it comes in.  He also bought some tee shirts to try - only $2 each at Walmart closeout.  He didn’t like them, but they are fine are spares for me - especially at that price.  Jeans - he had 2 spare pairs that he bought when the ones he likes was discontinued.  I washed them.  I went to pin them to shorten - but the waists are so tight that he would pass out if he wore them. (They were 2 of 3 identical pairs he bought together - the other is tight, but not like this and the next size up falls off him.) We went out looking for jeans.  He found 3 pairs - all going back are they are not right.  I did convince to buy a waistband extender which moves the button/button hole 1 or 2 inches apart and he is using same.  More jeans shopping to come.  (Okay, I can be as bad, just have been lucky - my only problem is socks and I have taught myself to darn so I can fix them when they get holes.)

Clubs - I have to get paperwork out to an upcoming event for our reenactment unit.  We raised the unit’s insurance coverage and I have been trying - by telephone and mail - to get a copy of the increased coverages from them since May!

Clubs - I managed out to get out the summer newsletter for my embroidery chapter.  Now I have to get the year book (upcoming year’s meeting programs) out.  The newsletter is email; the yearbook has to be printed and mailed - and husband is planning a trip - sometime.

Financial - I have to print out, sign, and mail by certified mail two letters for credit cards that we have to “opt out” of changes they are making.  I paid all our bills today until the end of next week in case he decides that we are going away same. 


THOUGHTs OF THE WEEK -           

First thought is - I don’t have time to write and post this!

When one does not know when one will do something - one cannot plan when one will do something else and has to juggle to deal with it all.  It will all work out in the end - either work out well or badly, but it will work out and new problems will come along to be solved.

TAXES! TAXES! TAXES!

A relatively short post this week.  It is the “end run” of tax season.

I managed to finish the last two returns for clients on Monday - out in the mail to then on Tuesday - whew!  One of them was a 2015 return for a friend of mine.  If she does not have it in the mail by Monday she will lose her refund.  Just a reminder - if you have been procrastinating and haven’t filed your 2015 return yet - you will lose your refund if you don’t file it by Monday (April 10, 2019).  If you owe taxes though - the various governments will keep trying to collect it - so file your return also.  Filing your late 2016 or 2017 returns is a good idea too!  Also it always best to file the current return - 2018 on time!  If you can’t finish it in time apply for an extension of time to file - Form 4868 from IRS, state forms vary by state.  This does not give you extra time to pay your taxes -so if you will owe taxes, try to estimate how much and send the payment along with the extension.

I have the two hardest returns left to do - ours and our little corporation.  I more or less finished ours today.  I will wait to clear to my head and check it over tomorrow and then print it out. 

Now that our return is done I can do our corporation return - some items are paid from our personal accounts for the corporation - and I have to figure out the cost of the use of our van for the corporation (which is why I have to do ours first).  Barring some strange occurrence -which if you read my posts regularly you will know we have had a lot of lately - I should have both returns finished, printed and ready to be signed and mailed in plenty of time.

Only one problem remains.  As mentioned we pay for some items from our personal accounts - particularly since the corporation does not have a credit card or have much money (I never said it was a successful business).  I have to keep track of what we paid for the corporation and sometimes what the corporation paid for us (it has an online payment account and we don’t so for rare online payments we sometimes use the corporation’s account). 

The amounts paid out by us for the corporation and paid out by the corporation for us should be the same (in reverse) on both sets of “books”.  They are not.  I spent all of last night looking for the error(s) and could not find them.  So as soon as I post this I will be back to trying to figure out what is wrong.   It is more than one error as I searched the books on both ends for the amount I am out and it does not exist.





And while writing this and working on our taxes - I am also doing the laundry!

THOUGHT FOR THE WEEK -
Remember get your income taxes done - now - don’t procrastinate.  You will be glad you did whether you get a refund or you owe you money and won’t have to pay late fees and interest if you file on time.

COMING TO THE END OF TAX SEASON - HOW DO I KEEP IT ALL ORGANIZED AND GET IT ALL DONE?

Last weekend I suddenly realized - I have 2 weeks to the end of tax season - and none of the returns which are due by April 15 are done, most not even started - and only 1 was almost finished. Panic was about to set in - then I looked at my list.  I have a dying accounting practice - literally, my clients were from my dad or from my boss and are older than me with a couple of exceptions. 

It is an extremely small practice, but I have clients in 4 (US) states - well, I did, but that is another story - I now have in clients, that I know of, in 3 states.  My dad was an accountant for an  avant garde art gallery at one time and he had many clients who were “modern” artists.  My boss had a couple of clients who were writers.  Between the two groups I have had clients in 7 states other than my home state and clients in Paris, France and in Auckland, New Zealand.  (At one time I had a client in Hawaii and the clients in Paris - one was 6 hours ahead of me and one was 6 hours behind and I would confused as to which was which.  The solution?  I telephone (pre-Internet days) all of them at 3:00.  Which 3:00?  It did not matter - it would either be 9 am or 9 pm - not too early to call and not too late to call.  Just when I thought that I had the time difference dealt with - a client moved to New Zealand - 16 hours off and a different day!

I do the returns in the order I receive the information.  If, though, I have returns that have to go out of state and others that are local, when it gets down to the end - as it is now - I have to get the out of state returns done first so they can be mailed to the client in time for the client to look over the returns, come up with any money they need to pay and get the return out timely on their end.  Local clients I can always hand deliver the return.  (My dad used to hand deliver returns - he and I (long before I was old enough to work) would go out at night and drop off returns at his clients.  I loved doing that with him.)

So a return that has to go across the country was mailed out on Monday - plenty of time in advance.  I spent yesterday afternoon preparing extensions for 2 clients who have requested them  - I mailed the extensions out to the tax offices that they have to go today.  I worked up estimated taxes (for 2019) for one client today and they will go out to him tomorrow.  (Estimated taxes are paid by people who do not have taxes withholding on parts of their income due to the type of the income and I have to estimate what their income/taxes will be next year for them.)  Normally one has to have 90% of their tax prepaid when the return is due, by withholding and paid estimates to avoid a penalty - or if one’s tax went up a lot in the year the estimate has to be equal to or greater than 100% of their tax for the prior year - in some cases 110% of same. I have to calculate and guess how much the clients need to pay as estimates for the coming year without them overpaying a lot, but also enough that they will not have a penalty at the end of the coming year.  These will go to the client (again out of state) tomorrow in the mail. 

I have another client who owes taxes for past years.  Her husband had been ill and they were also moving to another state so the past several years’ taxes have been a bit late in being filed. She always gets a refund so there is no penalty for filing late, although I always file extensions for her, but she files long after same is over.  Last year I went after her to give me info so I could do her return for 2014 so she could file it or she would lose her refund - I prepared the return and also her 2017 - so we started to catch up.  I need to do her 2015 return this year so that she does not lose her refund from same.  Big problem - the land near her home broke through a retaining wall and she cannot go home - even just to get the papers needed for her 2015 return.  I filled in a form for her so that IRS will send copies of what they have for her for 2015 - but it is getting close and I have not received the papers from them.  Luckily she had mailed or emailed me the forms she had from their pensions when I made the estimates for 2015 so I have that information.  Her other income is Social Security and a tiny bit of bank account interest.  Today I looked up what percent Social Security went up in 2015 compared to 2014 so I could estimate out what her income would have been (turned out it was the same amount for both years) and then estimated what would have been withheld on it.  I also took her 2014 and her 2017 interest income to figure out what she probably received in 2015.  (2016 also has to be completed so I don’t have the info for same.)  If I don’t receive the information by tomorrow I will do the return with the info I have, which should be a close estimate of everything.  She will have filed timely before she loses her refund.  If it is wrong - well, IRS will compare it to their records and correct the numbers before sending her - her refund. 

How do I keep track of all of this and make sure all the needed information is on the forms and correct?  I have two things that help greatly. 

First, I have a pocket file holder - nice plastic one that sits on the floor next to my desk.  It has sections in it.  A file folder is slightly too large (by maybe half an inch) across to fit in as one is just suppose to use each pocket as a file.  I want to be able to pull out the entire file and know everything is in it.  I cut one end off of some file folders - just enough for them to fit in the holder.  Problem solved.  I used to use removable labels when I had a lot of clients so I could reuse the cut folders during the season.  Now each client has a folder with their name on it. 

When a client mails tax papers to me - whether all of the papers needed or some of them - I put them in the matching folder - in the file holder. I just take out that folder when I am ready to work on their return.  Our information for our personal return and for our business returns go into two of these folders also (one is for our return and one is for the business returns) - in this case the year end forms received go into the folder and I when I move last year’s personal bills into a box (in the office closet) at year end, I put the sections of the bills into the matching tax return information folder also. 

Second, most of my clients have fairly ordinary returns.  So I wrote up a form for myself to fill in the all of the info that might be involved in clients (or our) returns - a section with various types of income listed with lines for the info, a section for taxes paid, estimates and withholding, another section for deductible expenses, and one for adjustments to be made to everything for the state return (if there is one) for the client.  Across the bottom is room to write which returns have to be filed by the client - left side Federal, right side state, so I can check that I have all the needed forms for client to file.  This information form is changed as needed - when the requirement to have medical insurance under ACA came into being - I added a check box at the top to check off that client has medical insurance.  The back of this form is blank so I can list things if there are several of the same item to be totaled.  If there are too many to fit, I add a piece of “columnar paper” (paper with columns to list money amount) and use that.  This system has worked well for well over a decade and I will keep using it to keep clients’ info organized for their taxes.
Then when I am done with the clients’ returns I have to do the hard returns.  Ours and our corporation.  They have to be done together - or at least I have to break out some of the figures between the two before doing the return.  These at least I have until midnight, April 15 to finish and mail.

Some people find all of this overwhelming when I talk about it.  I grew up in a house with both parents who were accountants - although most of the time only dad was working when I was growing up - mom was a stay at home mom until I was in college.  (They did have to come up with tuition - after scholarships and loans were subtracted - to pay tuition for the 3 of us.)  Husband did not understand this at first - everything was secondary to “tax season”.  My parents anniversary is during tax season (when they married it was ending a month earlier than it does now).  My mom’s birthday is during tax season (she just turned 90!).  Even husband’s birthday falls during tax season - but his I cannot ignore. 

So at this point unless something odd happens, I should be done in time - even with time off to write this post and next week’s post and do something for husband’s birthday (and having gone to a birthday party for mom given by my sister).  Then - payroll taxes are due by the end of the month!

THOUGHT OF THE WEEK -                               

If you have a repetitive task - daily, weekly, monthly, quarterly or annually - figure out how you can make it more automatic to do.  This is true whether it is a task around the house such as cleaning or laundry or changing towels - I change the sponges and scrub pad in the kitchen every month at the change of the month to remind to do so.  I change all the towels on Mondays (new start to the work week).  I then change the bathroom towels (in both bathrooms) on Thursdays also - why Thursday? It is about the middle of the week - and we have garbage pickup on Thursdays - so the kitchen towels are changed on the same days as the garbage is picked up.  I change the kitchen towels again on Wednesday and Friday - why not Thursday?  Well, I like to change the kitchen towels more often as I am working with food that is raw and may have microbes in it and then touching the towels.  Why Wednesday and Friday? - Well Monday, Wednesday, and Friday which are every other day.  

You have to decide for yourself when to do what and figure out how to remind yourself what to do.  It helps a lot to have a schedule and check off lists.

INCOME TAXES ARE DUE IN A MONTH

Here in the US it is that time of year again - tax season.  This year there is even more pressure due to the changes in the tax law and the resulting changes in tax forms.  (If you are here in the US and you have not seen the new forms - they are small, at least for the 2 main pages.)   Some of you may find that your taxes are lower - others will find that they are higher - and I don’t mean your refund, I mean your actual taxes.  Don’t forget, you have an actual tax amount that is calculated by filling in your tax form, then subtracting from that amount the amount you prepaid during the year - through withholding and/or payment of estimated.  So if one’s withholding, say from one’s paycheck - the common thing from which most people have withholding taken - is more than it has been, one will either be overpaid more than usual and get a refund or owe less than usual and pay in less - but one’s actual tax - the total of the amounts withheld, paid as estimates and any amount due (or less any amount withheld) is your actual tax amount.  Does that make sense?  Due to the changes many people will have had less withheld from their paycheck  - so if their tax is the same as last year’s - they will either owe more or receive less as a refund, even though their tax is the same.

Supposedly most people will be paying less in actual tax (the total mentioned above), but many will not.  A client of mine is retired and in the past paid no income tax due to high itemized deductions.  This year due to the changes I estimate that his poor man will be paying around $600 in taxes.  IRS has an online calculator to check one’s withholding and I had used it during 2018 to check all of my clients (and my) taxes with it, and this calculation is done using same. 

He is retired.  His income is almost entirely Social Security.  His deductions should be the same as last year.  How come his taxes are higher than before?  Well, the information about the changes left out some things - one of them is that is in past years each person was entitled to a personal exemption of (in recent years) just over $4000.  They were eliminated in the changes.

What does this mean?  If one has always filed using standard deduction then one was entitled the standard deduction plus a personal exemption for themselves plus same for each person they were taking as dependants, plus their spouse (on the same return filing jointly or their own return if filing married separately).  So a couple was entitled to exemptions totaling $8000, a family of 4 was entitled to exemption totaling $16,000 and those exemptions no longer exist.  If one is taking the new standard deduction and one is single with no dependants than their new standard deduction is more than last year’s standard deduction plus exemption , but if they have any dependants - such as a single mom with a child, it is less than same was.  Similarly, a couple with no dependants will find that the new standard deduction for same is more than the old standard deduction plus their 2 personal exemptions totaled, but if they have additional dependants - children and/or elderly parent for example - the new standard deduction will be less than the old one plus their personal exemptions were.

Now, if one has been itemizing deductions they were also entitled to the personal exemptions, and are no longer entitled to same, but since they listed their actual deductible expenses they do not pick up anything additional to replace their lost personal exemptions.  In addition a variety of items which were deductible in the past in a category of “other deductions” if the category was more than 2% of their income are no longer deductible.  Depending on where they live they may also be losing part of their state income tax/real estate deduction.  Now, it is possible that the new standard deductions might be higher than their itemized deductions and they can take same as deduction, but chances are that even if this is the case, it will still be less than they were able to deduct last year as itemized deductions plus personal exemptions  - whether they have other dependants or not. 

So, this year make sure to gather your related tax papers - W2 forms, assorted 1099 forms, forms from any other income you have - such as K1s and records of other any other income you have to list.  Then make sure that you have all of your deductions - medical (insurance premiums, copayments, deductible payments, doctors, prescriptions, etc. ), taxes - real estate, state & local income taxes (still allowed up to $10,000), interest on your mortgage, and charitable contributions.  (Medical is still limited to same in excess of a certain amount).  Make sure that you check carefully with your tax preparer as to what else you should include this year.  Don’t wait until the time to file is about to approach (only just over a month left) in case you have any questions or find that you need to come up with money to pay income taxes that you did not anticipate paying.  If you due your own returns - leave extra time to figure out the new forms.  There are some programs that will help one prepare their taxes (free) if you need help including one called VITA from IRS that uses volunteers to help people.

Your state income tax forms may have been changed also as a result of the Federal changes.  The state I live in has traditionally used the Federal return information as a start and one then made changes to it.  This year those changes include allowing some of the items no longer allowed on the Federal return (such as real estate taxes in excess of $10,000) and will have extra forms to fill in for same also. 

And this is a good time to decide to do better to have your paperwork organized for next year when tax season comes again.


Past posts on income taxes that may be of interest to you -
http://wheredidileavethat.blogspot.com/2016/03/gathering-papers-for-income-taxes-part-1.html
http://wheredidileavethat.blogspot.com/2016/03/gathering-papers-for-income-taxes-part-2.html
http://wheredidileavethat.blogspot.com/2017/04/holidays-and-taxes-unrelated-subjects.html
http://wheredidileavethat.blogspot.com/2018/02/income-taxes-are-here-again.html

THOUGHT OF THE WEEK -

Take the time to put together your tax papers properly and completely now, while there is time to find missing information or get it replaced.  If you have someone do your income taxes - contact them soon about having your taxes done.  If you do your own - leave extra time this year to figure the changes that have been made and how they affect you. 

As you put together the paperwork - think about what you can do to make next year’s taxes either
 to do.

Again, this is general information and not tax preparation information related to you.  Check with your tax preparer about your specific information needed.