Frequently Asked Tax Questions

Here are some of our most commonly asked questions regarding taxes and tax preparation. If you have a question that wasn’t answered here, feel free to contact us or give us a call.

What should I look for when choosing a tax preparer?

If you are paying someone to prepare your tax return, the IRS urges you to choose your preparer wisely. Taxpayers are legally responsible for what’s on their tax return even if it is prepared by someone else. So, it is important to choose carefully when hiring an individual or firm to prepare your return. Most return preparers are professional, honest and provide excellent service to their clients.

Here are a few points to keep in mind when someone else prepares your return:

Check the person's qualifications. Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics. New regulations effective in 2011 require all paid tax return preparers including attorneys, CPAs and Enrolled Agents (EA) to have a Preparer Tax Identification Number.
Check the preparer's qualifications. Check to see if the preparer has a questionable history with the Better Business Bureau and check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for attorneys; and the IRS Office of Professional Responsibility for Enrolled Agents (EA).
Find out about their service fees. Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers.
Make sure the tax preparer is accessible. Make sure you will be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise.
Provide all records and receipts needed to prepare your return. Most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.
Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
Review the entire return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
Make sure the preparer signs the form and includes their PTIN. A paid preparer must sign the return and include their PTIN as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. The preparer must also give you a copy of the return.

What do I need to bring to a tax return preparation appointment?

All year end reporting documents. Such as: W2’s, 1099’s for interest, dividends, rents, pensions and other income, 1098’s for mortgage interest paid and real estate taxes paid. If you itemize (long form), total out of pocket expenses such as medical, charitable and/or mileage. Any unreimbursed employee expenses including all receipts and detailed mileage logs.

Download the complete checklist here.

Is the organization of my receipts really important?

YES! You definitely want to send us all of your receipts. You can help us in a huge way by organizing and totaling your receipts! For example, medical, dental, prescription and any other receipts that are multiple receipts for the same category. If not, we may have to charge a recordkeeping/bookkeeping fee for the time we spend organizing and adding them for you.

Do I need to keep all of my receipts that have been used for a previous tax return? Why?

Save ALL receipts & documents pertaining to your tax return, as well as bank statements and of course the copy of your tax return for ten years. As your paid preparer, we are only required to maintain the records of our work for you for three years.

How detailed does my mileage log need to be?

Mileage deductions are great. But you cannot take the deduction if you don’t keep accurate records. You will need to keep all of these notations in one place. We don’t want you to miss out, so here is exactly what you need to record in order to comply with the substantiation requirements:

1. Beginning odometer reading
2. Ending odometer reading
3. Destination
4. Purpose
5. Date
6. Total miles driven
7. two or three invoices of repairs, maintenance, oil change etc. for the year which will reflect the vehicle description and odometer reading.

Is there any limitation or time frame for the IRS to collect on assessed tax?

YES! The IRS has 10 years to collect assessed tax. Unless, the taxpayer agrees to extend this statute the balance due on this assessed tax will disappear 10 years from the date of assessment.

Should I classify my workers as an employee or independent contractor?

If unsure about your classification or that an individual providing services to your business, please use this link for more detailed information provided directly from the Internal Revenue Service.

I am filing an extension this year, so I don't need to pay anything yet...right?

Actually, this is a very common myth in tax preparation. The fact is tax extensions only extend the time you have left to file, NOT the time you have to pay taxes owed. If you owe a certain amount and file an extension, you have until April 15 to pay regardless of the new filing deadline. Otherwise, interest and penalties begin to stack up.

READ “Top 6 Common Misconceptions About Filing Taxes” to learn about other common myths.

Earning side income: is it a hobby or a business?

If unsure about your classification, please use this link for more detailed information provided directly from the Internal Revenue Service.

Find it.
Ask it.
Print it.

Federal Income Tax Refund Finder

You can generally expect the IRS to issue your refund in less than 21 calendar days after they receive your tax return. Information displayed by this tool is updated every 24 hours – usually overnight.

State Income Tax Refund Finder

If you mailed a paper return, you may need to allow 12-16 weeks for processing before checking on the status of your refund. Status on electronic returns should be available after 7-10 business days.

If your refund is flagged, LDR will direct you to a customized online data test or telephone survey for secure method of identity verification and final certification of your return. If you are having trouble locating information on your refund, you can reach the LDR office at 1-888-829-3071.

AMENDED Federal Income Tax Finder

The “Where’s My Amended Return?” tool provides the status of Form 1040X Amended Tax Return for the current year and up to three prior years. You can generally expect your amended return to be processed up to 12 weeks from the date the IRS has received it. It can take up to three (3) weeks from the date you mailed it to show up in the IRS system.

Please Note: You will not be able to access certain amended returns using this application. IRS telephone assistors will not be able to provide additional information while your amended return moves through processing.