With the signing into law of the Economic Stimulus Act of 2008, many changes were made for individual tax returns. For the vast majority of filers, these complexities have catapulted the preparation and filing of individual returns right out of their hands. The slightest change in fact, from one year to the next, could change a taxpayers tax position. MillerMusmar has a team of professional accountants that keep abreast of pending tax legislation and are proficient in the rules and regulations governing the taxation of individuals.
Think the home tax software products help? You may want to reconsider after reading the following real life story.
Mr. Taxpayer used a popular home tax software product. When he relocated out of one state several years ago, he converted a personal residence to rental property. For several years thereafter, he continued to use the home tax software product and self-prepared his tax returns (including the rental property.)
Never receiving any notice of correction from the Internal Revenue Service (IRS) or applicable states, Mr. Taxpayer assumed the software was properly preparing his tax returns. He sold the rental property in a subsequent year and could not figure out how to report the sale and determine if there was a gain or loss on the property disposition. He brought his tax problem to MillerMusmar.
While working on the sale of the rental property issue, we discovered that Mr. Taxpayer had failed to claim depreciation in the prior years on the rental property. When queried on the matter, he responded: "I didn't know I had to, the software never warned me I was forgetting anything." By not claiming depreciation on business property, Mr. Taxpayer had unwillingly subjected himself to the "allowed or allowable rule". The rule placed him in a higher tax bracket than he had imagined or planned. In addition, he was forced to make a decision to amend the prior year returns which were still considered "open" and weigh the benefits and potential consequences of such an action.
Planning is imperative to reducing your taxes and ensuring full utilization of existing tax benefits. Once the year closes, it is generally too late to go back and reverse a tax implication occurrence. The previously illustrated real life story is only one example of why you would benefit from the professional planning and advice of the trained and skilled professional tax accountants at MillerMusmar.
Even if you do not own "rental property", you may at some point in the future encounter other financial occurrences requiring specific treatment pursuant to the tax laws. A myriad of potential situations exist that may affect your personal income taxes. A short list of considerations might include: educational savings; investment in or sale of stocks; timing of sales or itemized deductions; qualifying moving expenses; un-reimbursed employee business expenses; purchase, sale or exchange of a personal residence or vacation property; stock options; basis in gifted property, and the list goes on and on.
Let one of the knowledgeable MillerMusmar personal tax consultants sit down with you, review your tax history, and lay out a plan for the future. Regardless of how simple or complex you believe your personal tax position to be, the tax laws apply to all and a beneficial planning device may exist for you.
