Frequently Asked Questions

“Am I withholding enough from my paycheck?”

It’s important to revisit your withholdings as your life changes. If your circumstances change – like the birth of a child, a marriage, or a divorce – it’s up to you to change your withholdings on a W-4. Many employees neglect to take this step, resulting in withholding a number that is too low or high. We can help you calculate what you should be withholding based on your average tax rate.

“Should I use a tax professional or prepare my own taxes? “

The answer to this question depends upon your level of comfort. It is inevitable that as you advance through your life and career, your taxes will get more complex. What may be a simple Form 1040 one year can easily become a daunting series of tax forms the next. Should you feel overwhelmed this upcoming tax season, we can help with your unique situation.

“How long do I need to keep my tax records?”

Most taxpayers can shred their tax records three years after the returns have been filed. Three is the magic number because that’s the amount of time the IRS has to audit you. It’s also the time limit for filing an amended return if you noticed a mistake after your return was accepted. However, there are some exceptions to the rule, therefore, we recommend that you keep your tax records for 7 years.

“How do I file a tax extension?”

If you need more time to file your taxes, complete and submit Form 4868 to the IRS before April 15th. This will give you an additional six months, or until October 15, to prepare your tax return. Keep in mind that requesting an extension only gives you more time to file without penalty, it does not give you additional time to pay.

“Where is my refund?”

The best way to find information about your refund is to use the “Where’s My Refund?” tool on the IRS website. You can begin tracking your refund 24 hours after e-filing or 4 weeks after mailing your return. There won’t be a refund date until the IRS has processed and approved your return. The fastest way to get your refund is to e-file and choose direct deposit as your refund method.

“Who can I claim as a dependent?”

Many people know they can claim their children as dependents. However, you can also claim elderly parents, significant others, and other relatives in some cases providing they meet certain requirements. We can help you determine if you have other dependents that you can legally claim.

“I’m self-employed…do I need to pay estimated taxes?”

If you have net income of more than $400 you should pay estimated taxes. Ordinarily you pay your estimated taxes in four installments, with the first payment for the current year due on April 15th. Let us help you to calculate how much you need to pay and when it needs to be paid.

Do I need to pay capital gains when I sell my personal residence?”

If you are single, you will pay no capital gains tax on the first $250,000 of profit (excess over cost basis). Married couples enjoy a $500,000 exemption. There are, however, some restrictions. We can explain these restrictions and calculate how much, if any, tax you will owe on the sale of your primary residence.

Karen offers a free, no obligation,
consultation for new clients.

Talk to her and let her know what your needs and concerns are.