What Time Is It? Tax Time

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CULLMAN – Someone once said that the only two things you must do in this life is die and pay taxes. If you are expecting a big return, you may be reveling in the notion of getting that sweet check, but for many, this is the time of year to pray you are not paying in a fortune to the government.

There are a few things you can do to make the process less stressful and to optimize your time. Jeb Williamson, a local CPA for the past 11 years, took the time to answer a few questions about the subject. He stated that the first step is to acquire all the necessary paperwork and information.

“In general, any forms like W2, 10-99, 10-98, K-1 are received by client,” said Williamson. “This includes a summarized listing of self-employment or rental income and expenses, summarized listing of medical expenses, property and car tag taxes, charitable contributions, cost basis of any securities or property sold, HUD-1 forms for any property sold, AL drivers license number, and prior year tax returns if our office did not prepare it.”

He went on to say that things may be a little more complicated when dealing with a business or corporation, and more information may be required.

“Depending on complexity, much more detail may be required for business returns classified as partnerships or corporations. We would need either complete financial statements and detailed trial balance/general ledger or the bank statements and other necessary data for our office to prepare these.”

As everyone knows, tax laws change often and it can make it quite confusing from year to year. With the new healthcare laws in effect, there may be some surprises coming to some this tax season, according to Williamson.

“The affordable care act will severely impact those who purchased insurance through healthcare.gov or those who had any period during 2014 when they, or a member of their household, were not covered by health insurance,” Williamson said. “Each of these situations requires additional questions and forms. You will receive a Form 1095-A if you purchased insurance through the exchange. It will increase the cost of your tax return if you use a professional.”

Some of the exceptions available to the individual insurance mandate and associated penalties require the individual to obtain an exemption code by printing and mailing a form obtained on healthcare.gov. Form 1095-A and any exemption codes, if applicable, must be obtained prior to filing your tax return.  On the other hand, if you kept your health insurance you had previously, you will see few changes on your tax return unless your income was significantly higher.

“Don’t procrastinate,” Willamson said. “Make sure you have all of your forms and summarized information prior to seeing your tax professional. Many provide tax organizers to help you. If you are impacted by the new ACA laws, there will be more questions this year and it will likely take longer and cost more as a result. 

It can seem overwhelming to go through this process with or without a professional’s help. No one wants to leave something out, or forget something important and have the IRS come knocking. The important thing to remember, according to Williamson, is to get the process started now, so it is not a mad scramble come April.

For more information, or to seek help with your taxes contact Jeb Williamson, CPA, at 418 1st Ave SE Cullman, AL 35055 or call 256-734-7393.