Hopefully you had a good holiday season. The merger between
BRB clients and H&H clients went well, though a few people got
lost finding the office. Last year, in early February, with only
two preparers, we prepared over 110 returns in a 3 day period.
This year we are adding a part time preparer, Angela Revels, for
the evenings and weekends. She will prepare individual tax
returns and assist with the bookkeeping and payroll. Angela is
the wife of a long time BRB client and she was preparing taxes
with another tax service last year, so we are glad to have her
assistance for the coming year.
Office hours for January through April will be: Monday
through Friday, 9:00 a.m. to 8:00 p.m. and Saturday 9:00 a.m.
to 4:00 p.m. We will be handling appointments as well as walk in
returns, however walk in returns will be handled as time allows.
People with appointments will take priority. We will make
appointments for whichever preparer is available; please do not
request a specific preparer unless you have a specific need that
only they can provide. Brenda and Jonathan will be doing
individual as well as business returns, Angela, the new preparer
will be doing mostly individual returns. Remember late January
and early February are very active times, so if you do not have
an appointment come prepared to wait.
RAL's were very successful last year after some initial
problems with the bank and IRS. This year we have moved to using
Bank One and should not have any problems since they have a
number of years experience working with the software companies,
the IRS and doing loans for people. BRB used Bank One years ago
and had no problems with them.
Income Tax News: To continue the economic growth
that has started, Congress passed laws to extend a number of the
benefits they had set to expire last year. For married couples,
the standard deduction and low end tax brackets continue to be
double the single rate this year, and SC has decided to honor the
increased amounts this year as well. A big change this year is
the ability to deduct sales tax paid instead of state income tax
withheld when you itemize, this may allow some self-employed
people to itemize that could not in the past. Do not worry if
you have not kept track of your paid sales tax, the IRS is
providing tables of expected sales tax expenses based on location
and income. If you purchased any large ticket items, like a car,
do bring the sales tax paid on those with you, as those can be
added to the table amount. You can deduct either the sales tax
or the state income tax, not both. This will assist people in
states that do not have a state income tax.
- For 2004, the Earned Income Credit has been increased
- Child Tax Credit - Taxpayers with a credit amount more than
their tax could get a refund of the difference, up to 10% of
the amount by which their 2004 taxable earned income exceeds
$10,750. This percentage was raised to 15% for 2004, meaning a
larger refund for many of these taxpayers. This Child Tax
Credit was also extended at the $1,000 level.
- Combat Pay - Some military personnel receiving combat pay
get larger tax credits because of two law changes. The new law
counts excludable combat pay as income when figuring the Child
Tax Credit and gives the taxpayer the option of counting or
ignoring combat pay as income when figuring the Earned Income
Tax Credit. Counting combat pay as income when calculating
these credits does not change the exclusion of combat pay from
- The standard mileage rate has increased to 37.5¢ for 2004
and will be 40.5¢ for 2005. Medical, moving and charity
mileage rates have increased to 14¢.
- There is now an above the line deduction for travel
expenses related to National Guard and Reservists traveling to
meetings over 100 miles away and requiring an overnight stay.
This change was actually made retroactive to 2003.
- The personal exemption and standard deduction amounts have
- Did you buy a 2005 Ford Escape Hybrid, a 2001 or later
Toyota Prius, a 2000 to 2004 Honda Insight, or a 2003 to 2004
Honda Civic Hybrid? These cars are eligible for up to a $2,000
clean fuel deduction, so make sure you bring the purchase papers.
- The regulations on donation of an automobile have changed
for 2005, so only up to December 31, 2004 can you deduct the
book value of a donated car without documentation from the
organization you donated the car to describing what was done
with the car. If it was sold you can only deduct what it was
sold for, if they choose to use the car, then you can deduct
the book value of the car.
- Depreciation: Section 179 expensing up to $102,000,
depending on dates purchased 30% or 50% additional bonus
depreciation is also available. Bring the dates you purchased
assets. The bonus depreciation is allowed on the SC return
Please make sure to bring all your tax related materials
when you come into the office to have your taxes prepared.
- If you move you should file a change of address with the
IRS, form 8822. The IRS uses your last known address or what
is on your tax return. If you move please also notify BRB TAX, LLC.
- Any form needed can be obtained by calling the IRS at
1-800-829-3676, logging on to the IRS website, www.irs.gov or
by coming by BRB TAX, LLC.
- Did you refinance your home? If so bring your closing
papers. Do you have a student loan? Did you check on
refinancing of this? You may be able to lower your interest rate.
- Did you sell your home? You need to bring the closing
papers, details on how long you lived there, especially in the
last 5 years. If you are in the military, it is possible for
the 2 year exemption to be extended based on where you were stationed.
- Did you default on a loan or credit card? This may result
in a 1099-C form being mailed to you where you must include an
amount as income on your tax return.
- Please make sure you have all W-2's and necessary tax
information before you come.
- Did you take a distribution from your retirement account?
There will be a 1099-R for the amount you withdrew.
- Did you have a big gambling win, they will issue you a W-2G
for the winnings, however you may be able to deduct gambling
losses up to the amount of the winnings if you have
documentation of the losses and you itemize on your tax return.
- Education Credits - tuition for taxpayer, spouse and
dependents, this is on amounts not covered by scholarships and
grants, but does include money you finance through student
loans. This may include amounts paid by a third party.
- The maximum IRA Contribution is $3000 or $3500 for over age
50. There is a savers credit, which may help you finance the
amount of your IRA contributions. It is for taxpayers who put
money in a retirement plan, do not take distributions and are
not full time students. Income must be less than $25,000 for
single, $37,500 for head of households and $50,000 for married
- Did you get married, divorced, have a baby, change your
name, if so we need copies of your social security cards. If
you bring the social security cards, we will make copies and
keep them in your file in our office.
- Did you pay estimated taxes in 2004: Please bring amounts
and dates paid.
- Over the counter medicine is allowed for Flexible Spending
Account deductions but not for Schedule A, medical deductions.
- Charitable contributions of $250 or more need receipts.
- Capital Gains can be taxed at different rates depending on
holding period and dates of sale. Dates purchased, purchase
price, and sale dates are very important.
- Names and Social Security Numbers on W-2's and 1099's must
match the person's social security card. Please verify this
information with your employees and subcontractors.
NOTE: If you bring additional materials to correct your
taxes after they have already been prepared and sent in, we will
charge an amendment fee for correcting the return. So please make
sure you have all W-2 forms and 1099 forms before you come to get
your taxes prepared to avoid paying extra to have your return done
a second time.
PRIVACY. We at BRB TAX, LLC collect information about
you, both personal and financial. We do not disclose any nonpublic
information about our customers or former customers to anyone,
except as required by law or by your specific request. We
maintain physical and electronic safeguards to protect your
nonpublic personal information.