113 Maple Road — Lexington, SC 29073 — Phone: 356-1963

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 slightly.
  • 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 taxable income.
  • 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 been increased.
  • 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 this year.

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 filing joint.
  • 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.

Copyright © 2003-2006 BRB TAX, LLC. All rights reserved.