E-Filing Begins January 29 

Your accountant can e-file your taxes as early as January 29th, if you have all your documents in order. This is just a few days away, so if you want to get ahead of the game and get your refund sooner, make sure you have all of your documents submitted to your accountant soon! 

Delayed Refunds for Select Tax Credits 

If you are claiming the Earned Income Tax Credit and/or the Additional Child Tax Credit, the IRS is delaying refunds on these returns until mid-February. So if you have either of these credits on your tax return, don’t expect your refund to hit your bank account until February 27th at the earliest. 

Verification of W-2s for Utah Refunds 

Your refund with the State of Utah may be delayed until March 1st if the State cannot verify your W-2 with your employer. So if you’re expecting a refund from Utah, please allow 120 days from the date you filed your return, or until March 1st—whichever is later—for your return to be processed. This is in an effort to protect your identity. 

There are numerous factors that can delay your return or refund, so it is always best to submit your paperwork as soon as you possibly can. If you’re ready to file, or have any questions about filing taxes in Provo, please schedule an appointment with one of our experienced CPAs.

Income Tax Forms 

There are many different types of income tax forms, depending on the type of income you’ve received, and most people receive more than one kind of income throughout the year. Here are some of the most common income tax forms our clients receive. Please bring whatever forms are applicable to you: 

W-2 – You will receive this form if you are a registered employee of a business. This form shows your annual wages and the amounts you have had withheld from your checks throughout the year. 

1099-MISC – You will receive this form if you are an independent contractor or self-employed. You should receive one of these from every client who has paid you $600 or more during the year. 

1099-DIV – You should receive this form if you have received any dividends or other distributions from your investments over the last year. 

1099-INT – You will receive this form if you have collected any interest over the course of the year. At the very least, you will likely receive one of these from your financial institution to report the interest you’ve earned from your savings account. 

K-1 – You will receive this form if you are a shareholder in a trust, S corporation, or partnership. 

If you received any of these income tax forms, please bring them with you. You should also bring documentation for any other sources of income you’ve received throughout the year. 

Sale of Stocks 

Please bring any information and documentation you have pertaining to any stocks you’ve sold in the last year—particularly the purchase date and the purchase price. 

Sale or Purchase of Home 

If you’ve purchased or sold a home in the last year, please bring the settlement statements for the sale when you meet with your tax accountant in Provo. 

Income and Expenses for Rental Units 

If you own any rental properties, you will need to provide detailed documentation for the rents you’ve received, as well as a list of any expenses you’ve paid on the unit. Expenses can include the mortgage for the unit, property taxes, repairs costs, cost of advertising the unit, and so on. 

Proof of Medical Expenses 

If you’ve had very high medical expenses in the last year (more than 10% of your income), please bring documentation for those expenses to your tax interview. Note that medical expenses that have been reimbursed by your insurance company do not qualify. 

Proof of Charitable Contributions 

If you have donated cash or items to charity in the last year, please bring documentation to support these contributions. Your donations of both money and items should be itemized and include the date the donation was made, as well as the value of the item donated. Please note that only donations to certified non-profits qualify as a charitable contribution. 

Mortgage Interest and Taxes 

All homeowners will receive a 1098 form showing the mortgage interest and property taxes that you have paid over the last year. Please bring this to your tax interview. 

Tuition and Education Costs 

Students should receive a 1098-T tax form, documenting the amount paid in tuition over the last year. Please bring this with you, along with a detailed list of what you paid for books, lab fees, and any other expenses related to your schooling. 

Proof of Health Insurance 

You will need to provide proof of health insurance coverage for yourself and your dependents when filing your taxes. If you have employer-provided health insurance, your employer should provide you with the proper forms. If you have healthcare through the Obamacare marketplace, you will receive a 1095-A. 

SSNs & DOBs 

Please be sure to have the Social Security number and date of birth on hand for yourself and all of your dependents. This is especially important for any new dependents you may have, such as a new child or spouse. 

Last Year’s Return 

If you are a new client to The Accounting Guys, please bring a copy of last year’s tax return when you meet with one of our CPAs in Provo. 

Other Documents 

If you have any other documents that you feel are relevant to your return, but are not listed above, please bring it with you. It is always better to have extra documents than to find yourself without a necessary document during your tax interview.

What You Should Know about Filing Taxes with Business Losses

Here at The Accounting Guys, we specialize in working with business owners. We know the ins and outs of working with businesses’ books and filing their taxes—and we know that facing a year in the red is far from an uncommon occurrence for businesses. But how do you file your taxes when your business has a loss for the year? Here’s some important information you’ll need to know. For further assistance, reach out to our Provo business tax experts to schedule a consultation.

Understanding Net Operating Loss (NOL) Rules

When a business incurs a net loss for the year, it’s possible you could qualify for a net operating loss, or NOL. This can be applied to reduce taxable income in future profitable years. A NOL can be a powerful tool to improve your long-term business finances, but it’s important to understand the rules surrounding this potential tax break.

A NOL occurs when a business’s total deductions exceed its total income during the tax year. This loss can be “rolled over” to offset your future taxable income, helping to lower tax liabilities when you start turning a profit again. NOLs can offset up to 80% of taxable income in future years. This means that, even if your NOL amount is significant, you can’t entirely erase your taxable income if you turn a profit in the future. However, you can reduce it significantly.

Properly Deducting Losses on Your Tax Return

The way your business’s losses are handled on your tax return will vary depending on your company’s business structure. For sole proprietorships, partnerships, and S corporations, the losses pass through to personal tax returns, potentially reducing your personal income tax too.

• Sole Proprietorships: This business structure reports income and losses on a Schedule C (Schedule F for farming businesses) of Form 1040. If you have a net loss, it can reduce your total taxable income on your personal return.

• Partnerships and S Corporations: These business entities pass losses on to their partners or shareholders, who in turn report them on their personal returns. This can decrease the individual’s taxable income, but the IRS does limit how much loss can be claimed based on at-risk and passive activity rules—more on that below.

• Corporations: C corps are separate tax paying entities from their owners, and the business itself files its own tax return. Losses are reported on Form 1120, and impact the corporation’s taxable income. These losses do not impact the personal income taxes but can provide carry forwards for corporate tax savings in your more profitable years.

Understanding At-Risk and Passive Activity Rules

When claiming a net loss on your tax return, you need to ensure you’re complying with IRS rules related to risk levels and activity types. These restrictions limit how much loss you can use to reduce taxable income.

The at-risk rule requires your investment in the business to be genuinely “at risk.” This means you could actually lose it if the business fails. If your investment is protected from personal loss, the deductibility of your losses may be limited.

For business owners not actively involved in daily operations, losses may be considered “passive,” which means they’re only deductible to the extent of your passive income from other sources. On the other hand, if you’re actively participating in your business, such as having a hand in management decisions, you can avoid these restrictions and maximize your deductible losses.

Get Help from a Tax Professional

A tax professional can help ensure you’re taking full advantage of any tax benefits available while remaining compliant with the IRS’s rules. Contact The Accounting Guys today to speak with one of our experienced Provo business tax experts.