Back to School Tax Tips

Donations to your kid’s school

If you make annual donations to your kid’s public school, then you may be able to deduct the donation amount from your taxable income. If your donation of money or equipment is for the benefit of all students or a group of students, then it potentially qualifies as a charitable donation. For example, if you contribute to a fund to buy sports uniforms for the entire soccer team, then it can be considered tax-deductible.

On the other hand, anything bought directly for your child is not deductible. For instance, the purchase of school uniforms or new athletic shoes for your child cannot be used as a write-off.

After-school activities and the child care credit

Many children attend back-to-school programs, and your child’s program may qualify for the child care credit if it meets certain criteria.

1. child must be attending the program so that you can work, look for work, or go to school.
2. The program must also be considered “child care,” so hour-long tutoring sessions don’t qualify.
3. the credit is only available if your child is under 13 years old.

The child care credit is worth between 20% and 35% of the first $3,000 in qualifying expenses for one child, or $6,000 for more than one child, depending on your income.

It’s also worth mentioning that tuition at the kindergarten level or above never qualifies for a child care credit for federal tax purposes.

It’s never too early to start thinking ahead

Two great options for college saving are a 529 savings plan and a Coverdell ESA (education savings account).

529 savings plans are run by the states and are similar to 401(k)s as far as investment options go. Depending on your plan, you can choose from a selection of mutual funds, including stock- and bond-based options, as well as target-date funds, which gradually reduce investment risk as your child gets closer to college age. Contribution limits are high; many 529 plans allow for balances of up to $400,000. Limited contributions to Iowa 539 College Savings Plans are deductible on the Iowa tax return.

Coverdell ESAs are a little different. Contributions are limited to $2,000 per year, but you have a much wider variety of investment options. In fact, in a Coverdell, you can invest in any stocks, bonds, or mutual funds you’d like. Plus, Coverdell funds aren’t limited to college expenses — you can use the account for any level of education.

As far as tax advantages go, both plans work like a Roth IRA: Contributions are not federally tax-deductible, but any withdrawals used for qualified education expenses are 100% tax-free.

For exact impact on your tax return, call Brooke at 319-239-9903 for tax planning!

**New** Services: Notary and Budgeting

Well, not entirely new. They just have more demand than ever before!

I became a notary public in 2012. In the past 30 days I have notarized I-9 forms, credit card fraud statements, divorce agreements, legal judgements, and financial documents.

If you are in need of a notary, I am available most days, evenings, and weekends making it easy to meet the notary requirement on your important documents.

My budgeting services continue to be offered! I’ve worked with several successful folks that had debt, couldn’t control their money therefore living paycheck to paycheck, and was frightened because the hole was quite deep. They were right, the hole was deep but after understanding their spending triggers, needs vs wants, and a way to trim the fat by being a cash basis consumer with a monthly/weekly budget, life got much easier.

We focus on creating an emergency plan, setting aside 3-6 months of living expenses, and paying off debt with a quick effective plan.

Contact me today to start your budget success. info@bmp-cpa.com or 319.239.9903

Happy savings!

Change in Hours

Now that tax season is behind most of us, bmp, CPA will change to non-tax season hours.

Monday – Thursday by appointment only.

Only tax planning and budgeting clients will be accepted on Friday, Saturday, and/or Sunday by appointment only.

You may reach Brooke at info@bmp-cpa.com or 319.239.9903.

Simplifying the Complex,

Brooke Pettengill, CPA

bmp, CPA office Closed Aug 8th – August 21st

Brooke will have no access to internet, email, phone, or text during this time. Please hold your concerns until she returns. If necessary, email her at info@bmp-cpa.com and she will respond to your concerns upon her return.

Thank you and enjoy your summer!

June Probate, Will, Trust, and Estate Seminar JULY EDITION! ONLY 4 SPOTS REMAINING – RSVP TODAY!

July Seminar NOW FULL! Waiting List Available for Fall seminar.

The Must Know’s:

 Probate, Estates, Wills, and Living Testaments.

 

Planning for vacations, graduations, weddings, grandchildren and accomplishing your own ‘bucket list’ always gets highest priority. But planning for the serious stuff often gets put on the back burner –what happens to your real estate, bank account, certificates of deposit, IRA’s, mutual funds, 401k’s when you:

• Divorce
• Or your spouse pass away
• Get married or re-marry
• Give birth or adopt
• Move to a different state
• Have real property in a state other than your home state
• Have a death of a beneficiary listed in your will
• Experience major changes in income or asset value
• Inherit assets

 

Complementary seminar presented by Matthew J. Kriegel

of Eells & Tronvold Law Offices, PLC

 

Seminar Topic Include:

The Iowa Probate Process Last Will and Testament Revocable Living Trust Assets with Beneficiaries Already Listed Joint Tenancy of Real Estate Estate Tax Estimate of General Fee Range Q & A session

Seminar Details:

Who : You and your guest

When:  Wednesday July 24th, at 6:00pm

Where: Kava House Café. 122 2nd St. Swisher, IA

Why: You NEEDthis information

RSVP Required. RSVP to info@bmp-cpa.com or 319.239.9903 Seminar will be limited to 20 attendees. RSVP today!

 

 

 

 

 

 

 

 

 

 

 

 

 

**I often hear age as a reason to avoid future planning but rest assured AGE does not matter. People of all ages should attend.

 

Planning Saves $$

LIMITED DISCOUNT – 15% OFF ALL SMALL BUSINESS TAX PLANNING!

INCOME INCREASE FROM THIS TIME LAST YEAR? INCOME DECREASE FROM THIS TIME LAST YEAR? TRYING TO DECIDE WHETHER OR NOT TO BUY NEW OR USED ASSETS? TRYING TO FIGURE OUT JUST HOW MUCH YOU SHOULD BE SAVING EVERY WEEK FOR YEAR END TAX LIABILITY?

WITH MY EXPERT TAX PLANNING SERVICES WE CAN MAXIMIZE THE BENEFIT OF TAX PLANNING – LEGALLY PAY LESS TAX AT YEAR END AND KEEP YOUR HARD EARNED MONEY TO YOURSELF.

-LIMITED TIME OFFER EXPIRES JUNE 30, 2013. AVAILABLE TO NEW CLIENTS ONLY.

 

 

Probate, Estates, Will, & Living Testaments Seminar

Planning for vacations, graduations, weddings, grandchildren and accomplishing your own ‘bucket list’ always gets highest priority. But planning for the serious stuff often gets put on the back burner –what happens to your real estate, bank account, certificates of deposit, IRA’s, mutual funds, 401k’s when you:

• Divorce
• Or your spouse pass away
• Get married or re-marry
• Give birth or adopt
• Move to a different state
• Have real property in a state other than your home state
• Have a death of a beneficiary listed in your will
• Experience major changes in income or asset value
• Inherit assets

 

Complementary seminar presented by Matthew J. Kriegel

of Eells & Tronvold Law Offices, PLC

Seminar Topic Include:

The Iowa Probate Process Last Will and Testament Revocable Living Trust Assets with Beneficiaries Already Listed Joint Tenancy of Real Estate Estate Tax Estimate of General Fee Range Q & A session

Seminar Details:

Who : You and your guest

When: Thursday June 27th at 6:00pm

Where: Kava House Café. 122 2nd St. Swisher, IA

Why: You NEED this information

RSVP Required. RSVP to info@bmp-cpa.com or 319.239.9903 Seminar will be limited to 20 attendees. RSVP today!

 

 

 

 

 

 

 

 

 

**I often hear age as a reason to avoid future planning but rest assured AGE does not matter. People of all ages should attend.

– bmp, CPA is not affiliated with Eells & Tronvold Law Offices, PLC

 

Beware of Bogus IRS Emails

The IRS receives thousands of reports every year from taxpayers who receive emails out-of-the-blue claiming to be from the IRS. Scammers use the IRS name or logo to make the message appear authentic so you will respond to it. In reality, it’s a scam known as “phishing,” attempting to trick you into revealing your personal and financial information. The criminals then use this information to commit identity theft or steal your money.

The IRS has this advice for anyone who receives an email claiming to be from the IRS or directing you to an IRS site:

• Do not reply to the message;
• Do not open any attachments. Attachments may contain malicious code that will infect your computer; and
• Do not click on any links in a suspicious email or phishing website and do not enter confidential information.

Visit the IRS website and click on ‘Identity Theft’ at the bottom of the page for more information.

Here are five other key points the IRS wants you to know about phishing scams.

1. The IRS does not initiate contact with taxpayers by email or social media channels to request personal or financial information;

2. The IRS never asks for detailed personal and financial information like PIN numbers, passwords or similar secret access information for credit card, bank or other financial accounts;

3. The address of the official IRS website is www.irs.gov. Do not be misled by sites claiming to be the IRS but ending in .com, .net, .org or anything other than .gov. If you discover a website that claims to be the IRS but you suspect it is bogus, do not provide any personal information on their site and report it to the IRS;

4. If you receive a phone call, fax or letter in the mail from an individual claiming to be from the IRS but you suspect they are not an IRS employee, contact the IRS at 1-800-829-1040 to determine if the IRS has a legitimate need to contact you. Report any bogus correspondence. Forward a suspicious email to phishing@irs.gov;

5. You can help the IRS and other law enforcement agencies shut down these schemes.

Visit the IRS.gov website to get details on how to report scams and helpful resources if you are the victim of a scam.

Season Starts January 30th

“We have worked hard to open tax season as soon as possible.”

– Acting IRS Commissioner Steven T. Miller

The IRS recently announced that it is targeting January 30^th as the first day it will begin processing 2012 tax returns. This delay in filing is due to the late passage of the Tax Relief Act during the first week of January. Here is what you need to know.

Paper or Plastic (digital). It makes no difference if you e-file or send in a paper tax return. Both processes will begin on January 30^th.

Don’t Wait. A number of tax returns will not be allowed to process until late February or early March. Because of this, procrastinators could pay a heavy price in getting their returns processed and refunds paid versus other tax years. So get your information in as soon as possible.

Software Updates too. Just because the IRS says they anticipate processing tax returns on January 30^th does not mean all returns will be processed on that date. The software vendors must also update their programs AFTER the IRS provides revised specs for their tax forms.

Some Returns will need to wait. A number of tax returns will not be filed until late February or early March. This includes tax returns that have the following:

• Residential Energy Credits

• Qualified Adoption Expenses

• Depreciation of Property

• General Business Credits

• Domestic Production Activity Deductions (DPAD)

Remember, just because the processing of your tax return may be delayed does not mean you should delay the preparation of your return. Send in your tax information as soon as possible. Having your tax return ready when the processing window is open will help ensure the timely filing of your return and the receipt of any potential refunds. You can book your tax appointment online at www.bmp-cpa.com/schedule. BOOK TODAY!

All Current bmp, CPA Clients and Guests are Invited…

Client Appreciation Event!

Complimentary Iowa wine with homemade dessert for all clients and their guests!

When:     Thursday October 18, 2012
Time:      4:00 – 7:00pm  open house format
Where:    Kava House Cafe
122 Second Street Northwest
Swisher, IA 52333

For directions please see the Kava House Cafe website at http://kavahousecafe.com/

RSVP to info@bmp-cpa.com or 319.239.9903 by October 11, 2012.