The Joys Of Providing Professional Tax Services To The Woodlands

Professional Tax ServicesWell, our primary work for this tax season in The Woodlands has just about wrapped up.

But notice I said “primary”, there … you see, unlike some professional tax services in The Woodlands, we make it a point to do a bit more than simply “fill out forms” on your behalf. I’ll tell you more about that in a moment.

Yes, today is an extremely busy day for us here at Aurelia E Weems, CPA — it’s the day before the big deadline, as I type this up (Tax Day = Tuesday, April 17th, 2018). But I’m still taking the time to write to you, simply because I want to make sure you heard this from me (though you are likely to be actually receiving it later in the week, especially depending on how this day goes) …

The loudest thing I want communicated from me in this note is this: THANK YOU for your trust.

It is no small matter for anyone to place their financial life in front of another, and I know that for some, it can bring with it some anxiety or discomfort. That’s why we work so hard to be people in The Woodlands that you can trust for even more than just a simple “filling out some forms” service.

It’s why I make it a point to send these notes every week (even when we are slammed with work), and it’s why we work so hard to stay up-to-date on all of the latest tax code updates and regulatory changes that come like clockwork, every year.

Oh, and this coming year, 2018, is going to be fun. Lots of new opportunities for savings ahead.

We take your trust seriously. To our The Woodlands clients, THANK YOU for it. To those in The Woodlands who are not clients of ours yet, we look forward to earning your trust in 2018.

But this work also brings with it a certain joy — because this past season, we got to see remarkable lives of generosity, love and integrity laid out before us with regularity. For some, this was reflected by their financial statements — and for others, this was displayed by the warmth, kindness and delight by which you communicated with us during this process.

This much is clear: No matter the state of your financial life, nobody (not the IRS, not anyone) can take from you the strength derived from a life lived with gratitude and joy.

Our The Woodlands clients have reminded us of that once again, this year. What a privilege it has been to serve so many of you in The Woodlands this tax “season” … and we look forward to years of service to come.

Lastly, and as I mentioned above … we’re not letting up. We’re committing the “offseason” to continue our education in the new tax laws (the IRS still has not issued full guidance on much of it), and related to more ways to save you on your bottom line, and to serving you and your The Woodlands family in ways well beyond simple tax preparation. Ask us about how we can help you be better prepared for next year, and you may really like what we can do for your family’s bottom line.

Warmly,

Aurelia Weems
(936) 273-1188

Aurelia E Weems, CPA

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Aurelia Weems’ Tax Extension Breakdown

tax extensionIt’s the final full week of tax season, and our office in The Woodlands is hopping!

But yes, I’m still taking the the time to step away for a moment and write to you, my friend. Lots of business to communicate today, with the deadline of Tuesday, April 17th, right around the corner.

And, fret not — if you have all your papers in, and are waiting for our completion, know that my team is hard at work, even as I put this together.

This is often our busiest week of the year (so please be understanding), but it’s also the week when we receive, with clockwork regularity, many questions from The Woodlands taxpayers about extensions.

But before I get to those, here are a few more things that fall on the 17th…

1) Estimated taxes for the first quarter are due.

2) Want to open or contribute to an IRA or Roth IRA for 2017? Gotta get that done by Tuesday the 17th.

3) Final day to max out contributions for your 2017 HSA (Health Savings Account).

4) Claim any refund money from an unfiled 2014 return. (There is over $1BN of unclaimed refund money out there for that year — but only available if you didn’t file a return for that year.)

5) Most states’ tax deadlines also fall on the 17th. (Exceptions – DE 4/30; HI 4/20; IA 5/1; LA 5/15; VA 5/1; any state with no income tax.)

(Oh, and if you HAVE finished your process with us, please let us know what you thought. We really appreciate it. You can also find us on Yelp and/or Google Maps.)

Now … about those tax extensions.

Aurelia Weems’s Tax Extension Breakdown
“Here is a test to find whether your mission on earth is finished: If you’re alive, it isn’t.” -Richard Bach

As you know, this upcoming Tuesday, April 17, 2018, is the filing deadline for a federal tax return. If you need more time to get your paperwork complete, you need to file (or have us file on your behalf) this form: http://www.irs.gov/pub/irs-pdf/f4868.pdf with the IRS by the end of the day on the 17th. This gives you an automatic six-month extension of time to file (until October 15, 2018 — note, this is NOT the 17th of October).

Here’s the skinny:
An “Extension of Time to File” is not an “Extension of Time to Pay”, unfortunately. The Extension simply gives you an automatic six months of additional time to get your paperwork together and file that return. But, if you owe more than what you paid with your estimate, you’ll be accumulating penalties and interest on the difference — so PLEASE don’t take the entire six months to do this!

So, when filing your “Extension of Time to File”, you’ll need to estimate what you think you owe to the IRS.  This should not be pulling numbers out of thin air (or other various body parts). You’ll still need to go through your receipts and tax documents and get them “somewhat” organized.

From here, you can estimate both your income and your expenses, and then approximate what you owe Uncle Sam. Keep in mind that this is an ESTIMATE. And, you’ll have to pay what you estimate you owe at the time we file for the tax extension.

And we can easily help you create this estimate.

You can do this all electronically through our office, you can mail in the form WITH estimated payment (must be postmarked by the 17th), or you can call a specialized provider and pay by credit card. We can provide you with the appropriate number to call.

If you cannot pay your taxes due for some reason:

1) Pay as much as you possibly can right now.

2) You can ask for (and often receive) an extension of up to 120 days to PAY: https://www.irs.gov/taxtopics/tc202.html. It requires a phone call to the IRS. 🙁

3) “Financial hardship” delay: this is if paying your tax bill would demonstrably affect your ability to pay your other bills. Interest and penalties still accrue, but it’s better to register this with the IRS than to simply ignore the bill.

4) Installment payment plan: If you owe less than $50K in taxes, you should usually be able to get an installment payment plan of up to 72 months, simply by asking for it. If this is something you are considering, please let’s talk it over to make sure we come up with the best plan. But you can apply online for this here: https://www.irs.gov/Individuals/Online-Payment-Agreement-Application

5) Negotiate: this is NOT something to try on your own. We can help, but the number of “Offers in Compromise” that get accepted each year are quite small and a knowledge of how the system works is important.

6) Using existing credit sources (credit card, HELOC, private loans): some tax advisors would quickly recommend this, but I would NOT recommend you go this route, especially because the interest rates from the IRS are usually better than what you can get here.

However, if you’ve exhausted the options above, I suggest you do this instead:

7) Sell something you don’t need anymore. Always a pretty good plan anyway.

Warmly,

Aurelia Weems
(936) 273-1188

Aurelia E Weems, CPA 

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Filing Late On Taxes? You Might Actually Be Among The Woodlands’s Smartest

Late On TaxesThere are less than two weeks remaining before the tax deadline of April 17th. 

Does that startle you?

If you’re filing late on taxes this year, let’s talk. We can easily file an extension on your behalf, and make sure  that your return is handled as advantageously as possible.

If you’re still a bit spooked by that deadline, well, it might be that you need to read what I’ve put together for you.

Yes, you might be feeling bad about yourself right now because you haven’t pulled together all your paperwork yet. You might even feel like you won’t be able to take advantage of as many deductions as a result (you’d be wrong — we can help with that).

In short, procrastinating difficult work (like getting your taxes ready) can induce a lot of guilt for The Woodlands, Conroe and Magnolia  taxpayers.

Well, it’s time to break you free of that guilt.

Allow me…

(Oh, and if you HAVE finished your process with us, please let us know what you thought. We really appreciate it. You can also find us on Yelp and/or Google Maps!)

Filing Late On Taxes? You Might Actually Be Among The Woodlands’s, Conroe and Magnolia Smartest
“You can’t have everything… where would you put it?” -Steven Wright

Still haven’t filed your taxes yet?

Or maybe you have already done so, but there is another difficult or cumbersome task you’re avoiding.

Well, it could be that you are, in fact, smarter than the average bear in The Woodlands.

You see, right now there are an infinite number of things you could be doing. No matter what you work on, you’re not working on everything else. So the question is not how to avoid procrastination, but how to procrastinate well.

In my view, there are three kinds of procrastination. Depending on what you do instead of working on something, you could work on:

(a) nothing,
(b) something less important, or
(c) something more important.

That last type, I’d say, is good procrastination.

This is the kind of procrastination practiced by the “absent-minded professor” type, who forgets to shave, or eat, or even perhaps look where he’s going while he’s thinking about some interesting question. His mind is absent from the everyday world because it’s hard at work in another.

That’s the sense in which the most impressive people I know in Conroe, Magnolia or The Woodlands are all procrastinators. They’re type-C procrastinators: they put off working on small stuff to work on big stuff.

What’s “small stuff?” Roughly, work that has no chance of being mentioned in your obituary. It’s hard to say at the time what will turn out to be your best work (will it be your thesis for your PhD, or that detective thriller you worked on at night?), but there’s a whole class of tasks you can safely rule out: shaving, doing your laundry, cleaning the house, writing thank-you notes–anything that might be called an errand.

Good procrastination is avoiding errands to do real work.

Good in a sense, at least. The people who want you to do the errands won’t think it’s good. But you probably have to annoy them if you want to get any real work done. The mildest-seeming people, if they want to do real work, all have a certain degree of ruthlessness when it comes to avoiding errands.

Some errands, like replying to emails, go away if you ignore them (perhaps taking friends with them). Others, like mowing the lawn, or filing your tax returns, only get worse if you put them off. In principle, it shouldn’t work to put off the second kind of errand. You’re going to have to do whatever it is eventually. Why not (as past-due notices are always saying) do it now?

The reason it pays to put off even those errands is that real work needs two things errands don’t: big chunks of time, and the right mood. If you get inspired by some project, it can be a net win to blow off everything you were supposed to do for the next few days to work on it. Yes, those errands may cost you more time when you finally get around to them. But if you get a lot done during those few days, you will be net more productive.

So here’s where we come in.

Consider us “The Ultimate Procrastination Solution”.

Allow us to take the pain away from these second-level tasks (like getting your return filed) — and you go back to writing that killer novel.

Warmly,

Aurelia Weems
(936) 273-1188

Aurelia E Weems, CPA

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Make the Switch to Aurelia Weems And You’ll Receive A Complimentary 2018 Tax Reform Planning Session

tax reform planningWell, apparently we have a new (massive) spending bill in place from Congress, and plenty of the usual suspects are up in arms. Us? We’re too busy preparing tax returns right now to dig into the details of the (2,232 page!) bill, but here is a trustworthy rundown, if you care to read about it. There are some minor tax-related things in there, but nothing hugely significant.

But speaking of taxes, and of significance …

I would like to take a minute here to address you in The Woodlands, Conroe and Magnolia who have not yet made the decision to use our services.

After all, we’ve helped many The Woodlands, Conroe and Magnolia families “make the switch” over to us, year after year.

But look, I know that change is difficult.

And yes … I also know that you’ve probably established a rhythm with your current provider (even if it’s not a “good” rhythm), and that you might dread the prospect of having to teach a new The Woodlands tax professional about your family’s financial dreams and goals.

(By the way, are you using a tax pro who actually cares about those?)

Which is why this note would be for you. 

(And if you’re already using us, then you can safely ignore this particular message, and just kindly forward this on to a couple friends right now — after all, we love to reward our Conroe, Magnolia and The Woodlands clients for good referrals!)

Many families are still pulling together their paperwork to deliver to their preparer this week … and before you do that with your existing preparer, I’d like to give you a reason to try us out.

I’d rather not “bad mouth” other tax accountants in the The Woodlands, Conroe and Magnolia area, but suffice to say that we’ve had to do our share of re-doing other accountants’ work. In some cases, we’ve recovered significant sums during an amendment process, by reviewing an old return (from the last 3 years), and taking advantage of ethical and legal tax credits and deductions which other accountants don’t utilize.

And with the passage of “tax reform” for future tax years, (The TCJA as we accountants call it, or the Tax Cuts and Jobs Act), the opportunities for savings are significant.

Call us now, and we’ll book your 2018 tax reform planning session for sometime in May or June (after the chaos of tax season subsides), and we’ll work PRO-ACTIVELY on your asset and accounting mix to ensure that your 2018 returns are as well-protected from Uncle Sam’s grasping hands as possible.

With all of the new possibilities inherent within this new legislation, we’re chomping at the bit to help our The Woodlands, Magnolia and Conroe clients save BIG this year.

But, well, that only works if you’re our client.

So… join us now. We have limited availability these next six weeks, but we will make room for you.

We’re looking forward to helping you and your family SAVE BIG this year, and for many years to come.

Warmly,

Aurelia Weems
(936) 273-1188

Aurelia E Weems, CPA

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The Behavior Profile of Our The Woodlands Clients with the Highest Level of Financial Security

Financial SecurityThe madness of March certainly delivered over the weekend, huh? Plenty of upsets and surprises, which always makes this time of year fun for basketball fans.

Or, so I hear.

After all, this tournament seems to happen yearly, and until the IRS changes the deadline for personal tax returns away from April 15th (the 17th this year), well … I can’t say that my staff and I are able to participate much.

We’re too busy doing your taxes, after all. And this time of year with less than one month remaining, we’re in crunch time. 

The corporate deadline is now behind us, and we are talking with The Woodlands clients every day about their situation.

And these conversations vary — because not only do we consult with our The Woodlands clients about their specific tax obligations, but we end up becoming a financial counselor as well. This, frankly, is a role that we embrace around here: for some, we are the only people who see the underbelly of their financial life … and who will still instill a dose of hope.

Because if I’ve learned one thing over the years, it’s that no financial situation lasts forever. I’ve seen too many clients crawl out from under six-figure (and higher!) debt obligations to ever again believe that anyone is ever financially doomed.

But in addition to instilling hope to our clients who are struggling, we also have come up with a pretty good profile, over the years, of what makes for financial security. We’ve seen some of our Conroe, Magnolia and The Woodlands clients work HARD to join the ranks of those who’ve achieved this, and it’s worth applauding.

Perhaps you’d be interested in what we have seen? Then read on…

The Behavior Profile of Our Conroe, Magnolia and The Woodlands Clients with the Highest Level of Financial Security
“A photograph is usually looked at, seldom looked into.” – Ansel Adams

If you pay attention to the news media, a few things become clear:

1) Chaos is coming
2) Chaos is already here

and

3) Did we mention anything about the chaos?

It’s true (and a very good reason to carefully monitor your media intake). So, becoming a household that will be able to ride through instability and uncertainty is a pretty essential component for life success.

Which is why I’d like to tell you about our Conroe, Magnolia and The Woodlands clients who have prepared themselves well. I’m not naming any names here, but I am interested in commonalities. And you’ll notice that these are just as significantly about your mindset as you relate to your finances, as about your behaviors.

Here’s what we have learned about our most financially-secure clients in The Woodlands:

1) He always spends less than he earns. In fact, his mantra is that over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.

2) She knows that patience is truth. The odds are you won’t become a millionaire overnight. If you’re like her, your security will be accumulated gradually, by diligently saving your money over multiple decades.

3) He pays off his credit cards in full every month. He’s smart enough to understand that if he can’t afford to pay cash for something, then he can’t afford it.

4) She realized early on that money does not buy happiness. If you’re looking for financial joy, you need to focus on attaining financial freedom.

5) He understands that money is like a toddler; it is incapable of managing itself.  After all, you can’t expect your money to grow and mature as it should without some form of credible money management.

6) She’s a big believer in paying yourself first. It’s an essential tenet of personal finance and a great way to build your savings and instill financial discipline.

7) She also knows that the few millionaires in The Woodlands that reached that milestone without a plan got there only because of dumb luck.  It’s not enough to simply “declare” to the universe that you want to be financially free. This is not a “Secret”.

8) When it came time to set his savings goals, he wasn’t afraid to think big.  Financial success demands that you have a vision that is significantly larger than you can currently deliver upon.

9) He realizes that stuff happens, and that’s why you’re a fool if you don’t insure yourself against risk. Remember that the potential for bankruptcy is always just around the corner, and can be triggered from multiple sources: the death of the family’s key breadwinner, divorce, or disability that leads to a loss of work.

10) She understands that time is an ally of the young. She was fortunate (and smart) enough to begin saving in her twenties, so she could take maximum advantage of the power of compounding interest on her nest egg.

11) He’s not impressed that you drive an over-priced luxury car and live in a McMansion that’s two sizes too big for your family of four. Little about external “signals” of wealth actually matter to him.

And a little bonus, if you will: She doesn’t pay taxes which could have been avoided with a simple phone call to her Conroe, Magnolia or The Woodlands tax professional. She gets the advice, guidance, and expert assistance of a professional, and doesn’t waste her time trying to learn the tax code as well as those who have put in thousands of hours of their life to do so.

And here’s to you joining these ranks in future years.

Warmly,

Aurelia Weems
(936) 273-1188

Aurelia E Weems, CPA

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Aurelia Weems’ 6 Negotiation Tips To Get What You Want

Negotiation TipsWell, the brackets are set — and the nation’s collective basketball madness has begun.

Billions fly around every year for this tournament (probably much of it not reported on Form W-2G!), and it’s become a huge part of this season, as you no doubt know.

But there is another, often-unnoticed, part of this season that always makes me shiver a little for Conroe, Magnolia and The Woodlands taxpayers: Unclaimed tax refunds.

Every year, the IRS tells the public about this phenomenon, and every year, I am mystified by those in The Woodlands who miss out. This year, over one million taxpayers are missing out on a median average of $847 in unclaimed funds, simply because they didn’t file a tax return in 2014. There is over $1.1 billion (yes, with a B) sitting in a federal escrow account somewhere, and it might have your name on it. After April 17th (this year’s filing deadline), all of those funds get moved over to Treasury operating accounts.

We don’t want that, now do we? If you did not file a return in 2014, let’s see if you qualify.

Or maybe you DID file that year, but your friends in The Woodlands could use our help?

It’s probably the case that if you miss that 4/17 deadline, you won’t be able to negotiate that unclaimed refund money back from the IRS.

But, that said, it’s my contention that many of my Magnolia, Conroe and The Woodlands clients don’t realize how much MORE they could negotiate themselves into more favorable positions with businesses, salespeople, family members (!) and other intersectors of their weekly lives.

So, allow this week’s Note to give you a little bump to consider negotiating for more than just a car price.

No, this really has nothing to do with your taxes (except as it relates to how a qualified professional might be able to negotiate on your behalf when it comes to tax debts). But as you may have gathered, we are in your corner for every part of your financial life, and otherwise.

Aurelia Weems’ 6 Negotiation Tips To Get What You Want
“Remember you will not always win. Some days, the most resourceful individual will taste defeat. But there is, in this case, always tomorrow – after you have done your best to achieve success today.” – Maxwell Maltz

No matter what career you’re in, or how far you go in it, the ability to effectively negotiate can make the difference between success and mediocrity.

Whether it’s a multimillion-dollar contract, a job offer, or a luncheon, here are some trenches-tested negotiation tips that will bring you closer to your ideal outcome:

1. Know what you want in advance. Don’t go to the table, or enter any kind of adversarial situation without a clear, realistic idea of what you want to achieve. It will help you negotiate with confidence.

2. Ask for what you want. Don’t be afraid to make the first offer. You’ll set the tone for the discussion, and studies (and my experience) suggest that the negotiator who goes first usually comes closer to getting what he or she wants.

3. Understand what your partner wants. A successful negotiation should satisfy both sides. Instead of trying to crush your competition, find out what he or she hopes to get, and try to work together toward a solution that works for you both.

4. Don’t concede unilaterally. Usually one side or the other has to give something up. If you do that, be sure to get a comparable concession from the other person. Giving away something for nothing will be taken as a weakness to be exploited.

5. Don’t rush. Time can be your friend if you’re willing to wait for the right deal. If the other side senses a deadline, he or she may be motivated to hold out until the last minute, or try to force you into accepting unreasonable terms. Be patient and let the time pressure work against your partner.

6. Be ready to walk away. This can take a certain amount of courage, but it’s necessary to avoid being backed into an agreement you don’t want. If possible, keep an ally in reserve–someone with the power to approve or reject the deal. This can give you an out if you need to turn down a deal, or motivate the other side to provide you with a better offer.

Now, these negotiation tips are really useful in most every situation. The *only* situation in which I might have you handle something very differently? In conversation with your spouse. 🙂 That’s a whole different article, but we’ll save that for another day.

Warmly,

Aurelia Weems
(936) 273-1188

Aurelia E Weems, CPA

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Aurelia E Weems, CPA’s 2017 Tax Preparation Checklist

2017 Tax Preparation ChecklistLots of things have been changing recently — from Academy Award ratings (they’re down), to mortgage rates (which have been rising), to the effective tax rates for most businesses and families in 2018 (which, you may have heard, have changed!).

But we here at Aurelia E Weems, CPA haven’t much changed: we’re still cranking along in preparing your 2017 taxes, meeting with Conroe, Magnolia and The Woodlands clients, new and old, and helping you keep the most amount legally and ethically possible from the grasping hands of the IRS.

Already, we have many, many clients who have filed, have received refunds and have written us notes telling us that they’ve never been more pleased with their filing experience. And of course, this makes me happy, as you might imagine.Now, we know that waaay back in January, taxes were perhaps not on the forefront of your brain.

But, well, here we are in March … and we have six weeks remaining to get them filed and/or file for an extension on your behalf.

So, I sent this out in early January, but things are now a bit more “real”. Let’s get this stuff done. Chase down these docs, and let’s save you some!

Aurelia E Weems, CPA’s 2017 Tax Preparation Checklist
“Arriving at one goal is the starting point to another.” -John Dewey

With all of the changes every year (and, of course, that’s especially true THIS year), filing your taxes on your own is not for the faint of heart. That’s even with nice-looking softwares on the market which purport to make it easy for you.

But that’s what we’re here for. Let us be your easy button in Conroe, Magnolia and The Woodlands.

Below is a list of what you will need during the tax preparation process. Not all of them will apply to you — probably MOST will not. Nonetheless, it’s a useful tax preparation checklist.

Before you get overwhelmed: yes, this is a long list — but it’s the unfortunate reality of our tax code that it’s not even comprehensive! But these items will cover 95% of our Conroe, Magnolia and The Woodlands clients.  Really, this is for ensuring that we’re able to help you keep every dollar you can keep under our tax code.

Even if for some strange reason you won’t be using our cost-effective services this year, feel free to use this list as a handy guide…

Personal Data
Social Security Numbers (including spouse and children)
Child care provider tax I.D. or Social Security Number

Employment & Income Data
W-2 forms for this year
Tax refunds and unemployment compensation: Form 1099-G
Miscellaneous income including rent: Form 1099-MISC
Partnership and trust income
Pensions and annuities
Alimony received
Jury duty pay
Gambling and lottery winnings
Prizes and awards
Scholarships and fellowships
State and local income tax refunds
Unemployment compensation

Health Insurance Information: NOTE — despite the passage of tax reform that changes this information for 2018 taxes, we still need it for 2017 taxes.
* All 1095-A Forms from marketplace providers (if you purchased insurance through a Marketplace)
* Existing plan information (policy numbers, etc.)
* If claiming an exemption, your unique Exemption Certificate Number
* Records of credits and/or advance payments received from the Premium Tax Credit (if claiming)

Homeowner/Renter Data
Residential address(es) for this year
Mortgage interest: Form 1098
Sale of your home or other real estate: Form 1099-S
Second mortgage interest paid
Real estate taxes paid
Rent paid during tax year
Moving expenses

Financial Assets
Interest income statements: Form 1099-INT & 1099-OID
Dividend income statements: Form 1099-DIV
Proceeds from broker transactions: Form 1099-B
Retirement plan distribution: Form 1099-R
Capital gains or losses

Financial Liabilities
Auto loans and leases (account numbers and car value) if vehicle used for business
Student loan interest paid
Early withdrawal penalties on CDs and other fixed time deposits

Automobiles
Personal property tax information
Department of Motor Vehicles fees

Expenses
Gifts to charity (receipts for any single donations of $250 or more)
Unreimbursed expenses related to volunteer work
Unreimbursed expenses related to your job (travel expenses, entertainment, uniforms, union dues, subscriptions)
Investment expenses
Job-hunting expenses
Education expenses (tuition and fees)
Child care expenses
Medical Savings Accounts
Adoption expenses
Alimony paid
Tax return preparation expenses and fees

Self-Employment Data
Estimated tax vouchers for the current year
Self-employment tax
Self-employment SEP plans
Self-employed health insurance
K-1s on all partnerships
Receipts or documentation for business-related expenses
Farm income

Deduction Documents
State and local income taxes
IRA, Keogh and other retirement plan contributions
Medical expenses
Casualty or theft losses
Other miscellaneous deductions

We’re here to help. Let me know if you have any questions.

Warmly,

Aurelia Weems
(936) 273-1188

Aurelia E Weems, CPA

 

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3 More Reasons Why More The Woodlands Families Don’t Have Estate Plans

Estate PlansThe Winter Olympics are finished and we are fully immersed in our tax preparation process.

We’ve been enjoying the opportunity to reconnect with so many longtime friends from Conroe, Magnolia and The Woodlands who trust us with their most sensitive financial details — and we don’t take that privilege lightly.

And because I don’t take this lightly, I also want to take the opportunity to urge my Conroe, Magnolia and The Woodlands clients who have NOT prepared for every eventuality for their family to consider using this season as a time to take care of another significant financial “preparation” as well.

I wrote a little about this last week, and I’m wrapping up my thoughts on this particular topic here this week.

We’d be glad to help you and point you in the right direction for this process.

3 More Reasons Why More Conroe, Magnolia and The Woodlands Families Don’t Have Estate Plans
“You don’t choose your family. They are God’s gift to you, as you are to them.” -Desmond Tutu

Last week I wrote about a couple of the bad reasons some of the Conroe, Magnolia and The Woodlands families use to not do basic estate planning.

In fact, as of this writing, it’s a fact that almost 60% of Americans don’t have a basic will, and that’s a big problem.

Much of this is because of misconceptions about estate planning, and I dealt with two already:

1. “Only rich people prepare estate plans.”
2. “Everything goes to your spouse, if something happens.”

Well, I have three more for you to chew on, and dispense with.

Bad Reason 3. “After I create my will or living trust, there’s nothing else to think about.”
Well, if you follow this line of thinking, it could lead to a lot of problems. For instance, once you set up a trust, you need to re-title the assets you want to transfer to the trust. Otherwise, the trust doesn’t help a thing.

On top of that, families need to periodically update their will or trust to reflect major life events, such as a divorce or the birth of a child. You’ll also want to revisit your estate plan if you move to another state.

In fact, it’s a good idea to re-evaluate your plan every 3 or 4 years to make sure your plan is fully up-to-date.

Bad Reason 4. “If I have a will, my estate automatically won’t go through probate.”
Well, again — that’s not the case. In fact, ALL wills are subject to “probate”.  This is a process in which a court determines whether the document is actually valid and ensures that relatives and creditors are notified. This process can take several months and drain thousands of dollars from your estate.

So here’s one way to avoid that entirely–create that living trust. Essentially, a living trust is a legal document you create which holds property (such as brokerage accounts and real estate). When you die or are incapacitated, the property is smoothly transferred to your beneficiaries. This transfer occurs outside of the probate process, which saves a TON of hassle.

Not everyone needs one of these documents, but it’s something which you can’t paint over with a broad brush. Which is why it’s important to walk with a competent guide on these matters.

By the way, if you own property in more than one state, a living trust is a no-brainer. Going through probate in multiple states is a nightmare.

Another advantage to a living trust is privacy. A will is a public document, and anyone can come to the probate hearing to see if any fights break out. Living trusts aren’t published in any courthouse, so people can’t gain easy access to them. That’s quite nice.

Bad Reason 5. “I could be held responsible for a deceased parent’s debts.”
No, you’re not responsible for credit card debts from your parents.

In general, children aren’t responsible for a deceased parent’s debts, and in some cases spouses are often exempt as well. Again…you can’t paint it with a broad brush. But as a general rule, the estate is responsible for paying debts. If there isn’t enough in the estate to cover the amount owed, the debts usually go unpaid.

So really … there is no “great” reason to avoid this kind of planning. And it just so happens to be something that would make a great addition to your tax preparation process. So, let me know if you’re interested and we’ll help you get started on the right track.

Warmly,

Aurelia Weems
(936) 273-1188

Aurelia E Weems, CPA

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Estate Planning For Dummies: Two Estate Planning Myths Debunked For The Woodlands Families

Estate Planning For DummiesI’m not sure there is very much I could say that could add anything to the conversation about what happened last week in Parkland, FL. It seems that every time something like this happens, we grieve for shorter and shorter amounts of time and move on ever-more quickly to the shouting at each other over root causes.

But the fact remains that there are 17 families whose entire world has been decimated, and a community who is reeling. With the speed of social media these days, it’s easy to take this opportunity to make various points (many of them quite valid), but should we perhaps notice about ourselves and our culture that we seem to “move on” so very quickly?

I’d like to never become “numb” to such things. And so we pause to mourn with those families, even here in the midst of our The Woodlands office’s busiest season.

In times like this, I’m grateful for the moments I’ve been given with my friends and my family … and I am reminded that everything can change in an instant.

It sure brings everything into its proper perspective, doesn’t it?

Events like this can never be planned for, but nor can many of the other kinds of disasters which tend to hit families at unexpected times. Whether financial, personal, occupational, or otherwise, disaster and tragedy *does* strike every family at some point.

But problems that can intensify the disaster are ones that *can* be planned around, and sometimes we just need a reminder and the right timing to get those plans handled…

Estate Planning For Dummies: Two Estate Planning Myths Debunked For The Woodlands Families
In every conceivable manner, the family is the link to our past, the bridge to our future.” -Alex Haley

As we have seen this past week, life can turn on a dime … and we can’t plan for every one of the specific ways it may do so. But we CAN plan broadly.

For me and my family, we’ve put some simple plans in place for a VARIETY of circumstances, not just financial or legal. And it truly helps us sleep better at night, just knowing we have it all covered.

And the unfortunate reality is that the most recent numbers indicate that almost 60% of Americans don’t have a basic will — and that’s a big problem.

One of the big reasons that most The Woodlands families don’t yet have this in place is because of some incorrect thinking about whether it’s right for them, or if it’s even necessary. And sure, some just haven’t gotten around to creating a will or trust. Others think they don’t need an estate plan because they’re not “rich”.

I’ve even heard from The Woodlands people that they don’t want to put it in place because when they do, it’s sending some sort of death wish into the universe (or some such).

But here’s the big problem — if you continue without an estate plan, you could (instead) leave a legacy of bad feelings and attorneys’ fees.

Because it is currently “tax season”, this is something that might make sense to have done once your return is filed — simply because you would have already compiled your financial documents in such a way that creating an effective plan is a bit easier.

Or maybe you are still tripping up on these myths?

Myth 1. “Only rich people prepare estate plans.”
Do you own ANYTHING? Because if so, you need a will. You see, a will allows you to designate who will receive your The Woodlands property should anything happen. Continuing without one ensures that your assets will be distributed under the terms of your state’s “intestate succession” laws. That means your money and property could end up with family members you haven’t spoken to in years, instead of who you’d really like to see control your assets.

I won’t go into all of the different components of a will, trust, health care directive, etc., as my purpose here is to emphasize that failing to plan is simply a decision to trust your assets to government bureaucrats.

Even if you think your situation is pretty straightforward, you may feel more comfortable hiring a The Woodlands lawyer to guide you through the process.

Myth 2. Everything goes to your spouse, if something happens.
Unfortunately, that’s not always the case. We take care of The Woodlands clients from different states around the country, and I can tell you that state laws vary; whether for taxes, estates, or anything else. And in most states, if you continue without a will (intestate), your inheritance will be divided among your spouse and your children. In New York, for example, when someone dies intestate, the spouse gets the first $50,000 of the estate and what’s left is divided 50-50 among the spouse and the children.

You can imagine how this could create all kinds of problems, particularly if your spouse was financially dependent on you or you have children from a previous marriage.

I’ll post a few more in the weeks ahead, but I hope you can already see that things are not always as we “think”.

I hope this helps. To your family’s financial and emotional peace…

Warmly,

Aurelia Weems
(936) 273-1188

Aurelia E Weems, CPA  

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2018 Tax Refunds Have You Confused? Aurelia Weems Provides Clarity

Tax RefundsWe are cranking along with tax return preparation here at Aurelia E Weems, CPA, and there are some interesting things that you should know about from Tax Land (that wild, scintillating world that it is).

Look — it is our J-O-B to handle this junk so you don’t have to, which is why I make it a point to not be too tax-heavy in my notes to you. But this week, well, there’s just a few too many things to ignore.

Firstly, did you know the government “shut down” for a few hours Friday night? It was a function of the Congresspeople finally coming to a budget deal, and, well … it might mean some changes for YOU and many in The Woodlands (and it might not).

Buried in the deal were a variety of tax credits that HAD been expired for 2017 taxes, but which were suddenly reinstated. If you want to get very, very wonky, you can see the full list right here (beginning at Section 40101) — but here are some high points:

  • above-the-line deduction for qualified tuition and related expenses
  • mortgage insurance premiums treated as qualified residence interest
  • exclusion from gross income of discharge of qualified principal residence indebtedness
  • credit for nonbusiness energy property
  • credit for residential energy property
  • credit for new qualified fuel cell motor vehicles
  • credit for alternative fuel vehicle refueling property
  • credit for 2-wheeled plug-in electric vehicles

Basically, The Woodlands students, homeowners, and energy-savers got their breaks restored. If this affects you, we can amend your return if you would like to account for these breaks.

However, my suggestion is that we wait a bit to see how the IRS responds, because they don’t actually have full clarity about what they will be doing about them just yet. Shocking, I know.

But I don’t blame them, because this is pretty last-minute, even by Congressional standards.

Finally, I’m going to use my Note this week to clear up some confusion about tax refunds that have been the subject of a bunch of questions from The Woodlands clients this year. Here’s what’s really happening…

2018 Tax Refunds Have You Confused? Aurelia Weems Provides Clarity
“The truth can be funny but it’s not funny to cover up the truth.” -Ryan Cooper

Fake news is something we’re used to handling around here at Aurelia E Weems, CPA — you know the drill: “My neighbor’s uncle has a friend who is an accountant and HE said that my support parakeet is 100% deductible — and can even be counted twice!”

Yes, well … isn’t that precious.

Aside from those kinds of silly examples, there is some definite confusion about certain tax refunds this tax filing season, and we’re here to clear it up for you. Enough confusion, that the IRS issued a release about it (which you can read right here). I’ll deal with a few of those points, as well as a few other questions that we’ve received right here:

Confusion #1: Refund Delays
No, not every refund is delayed. Yes, EITC and ACTC related returns (both are child tax credits) WILL have delayed refunds. For every other kind of return in which a refund is expected, the IRS says that refunds should go out within 21 business days of filing. More about that below.

But about those EITC and ACTC refunds — unless you got some sort of advance on your refund, those might even take a little longer than was promised. The IRS said they will begin processing those on February 15th, but those refunds won’t begin to hit bank accounts until 2/27 — and that’s for those who chose direct deposit, and for whom there are no other issues.

So, hang tight.

Confusion #2: Checking On Refund Status
Have you heard that if you order a tax transcript it will tell you when to expect your refund?

Or if you call the IRS help hotline or ask US to call on your behalf that you’ll get a definite refund delivery date?

Whoops, more fake news. These social-media touted refund inquiry workarounds won’t work.

The information on a tax transcript does not necessarily reflect the amount or timing of a refund.

And as for calling us about it, we have no additional ways to check your refund status, unfortunately.

And sure, you can call the IRS directly … but be prepared to wait on hold for a looong time, and to receive no further information.

The BEST place to check, always is “Where’s My Refund” on the IRS website, which is right here: https://www.irs.gov/refunds

Confusion #3: “Is The IRS Calling Me???”
Short answer: No.

Longer answer: Nope.

Full answer: The IRS does NOT initiate contact with taxpayers by phone, email, text messages or social media to request your personal, tax or financial information.

If you are contacted in one of these ways regarding your refund — either a caller saying you owe more or an email promising a bigger refund — the communication isn’t from the IRS, even if the caller or emailer says they are agents. They are crooks looking to assume your tax identity and take your money.

Alright then. Glad we’ve cleared all of that up.

And in all seriousness: remember that we are in your corner. We’re here to help, and love to serve our Conroe, Magnolia and The Woodlands clients, so whatever advice you need, we’re just an email or phone call away.

To your family’s financial and emotional peace …

Warmly,

Aurelia Weems
(936) 273-1188

Aurelia E Weems, CPA

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