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

Hopefully you and all your friends and family had a good holiday season. This year was filled with a number of good and bad things, from the Hurricane and rising gas prices which stalled the economic growth we were experiencing, to a continuing increase in how many and what types of returns the IRS is auditing. IRS is increasing their scrutiny on returns with dependents other than your own children. On waiters and waitress' returns to make sure all tips are being claimed. And on the returns of self-employed or corporate entities to make sure there is no income shifting going on.

Office hours for January 9th through April 17th 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 taking appointments as well as walk in returns, however appointments will be given priority. Brenda and Jonathan will be doing individual and business returns, Angela 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 or delay your visit until later in February to come at a less active time. The middle of March as well as the middle of April are also very busy.

RAL's were very successful last year with Bank One. We are going with Bank One again this year.

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.

  • The standard mileage rate for 2005 is different depending on when the miles were driven.
    Type of Mileage Jan 1, 2005 - Aug 31, 2005 Sept 1, 2005 - Dec 31, 2005
    Standard40.548.5
    Medical/Moving15.022.0
    Charitable14.014.0
    Charitable (Katrina)29.034.0
  • The change that will effect the most people this year will probably be the change to how a Qualified Child is defined for purposes of claiming the child for the exemption, or any number of credits, these changes will result in many people not being able to claim children they have in the past, and we will assess each situation as it comes up. If you are the child's custodial parent then you should have little to worry about however anyone keeping and claiming children who are not their own should be prepared for a few questions to allow us to confirm the IRS will allow you to claim them.
  • Because of the change to the definition of a Qualified Child, many people who filed with a Head of Household status in the past, will not be able to this year. You must claim a dependant to be able to claim Head of Household status this year.
  • For 2005, the Earned Income Credit has been increased slightly.
  • Child Tax Credit - The Child Tax Credit was extended at the $1,000 level until 2010 for children under the age of 17.
  • The personal exemption and standard deduction amounts have been increased.
  • The regulations on donation of automobiles, boats and aircraft have changed for 2005 to only allow book value deduction if the vehicle is used by the charity, if it is simply resold they will provide you with documentation of it's sale price, you can only deduct what it sold for.
  • For 2005, the proposed 50% reduction of the maximum electric vehicle credit and the clean-fuel deduction has been eliminated. You can claim the maximum electric vehicle credit allowed for a qualified electric vehicle you place in service in 2005. You can claim the maximum deduction allowed for qualified clean-fuel vehicle or other clean-fuel property placed in service in 2005.
  • This year anyone who files an extension to file their taxes, will automatically have the full 6 month extension, instead of having to do two separate extensions to get the 6 months. If you need an extension filed, call us and give us your name, and update your address and phone number.
  • If you housed anyone displaced by Hurricane Katrina for free for at least 60 consecutive days, there is a $500 exemption per person housed, up to 4 people. However the exemption can only be claimed one time for each person displaced, even if they stayed with multiple people. You may need their original place of residence, their Social Security Number, and their date of birth.
  • The IRS has stated they will begin honoring divorce decrees for child custody and exemptions.

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.
  • Did you sell your home? You need to bring the closing papers for when you purchased and sold the home, as well as any improvements you made on the home, details on how long you lived there, especially in the last 5 years.
  • Did you default on a mortgage, loan or credit card? This may result in a 1099-A or 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 and the amounts of taxes withheld.
  • 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 has increased to $4000 or $4500 for over age 50.
  • Did you get married, divorced, have a baby, change your name, if so we need copies of your or the baby's 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 2005: 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.
  • If you plan to claim sales tax as a deduction, please make sure to have the amount added before you come to see us.

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.

PAYMENT POLICY: Payment is due when services are rendered. We will no longer hold checks. There will be a $25 fee on returned checks and they will be turned over to the Solicitor's office for collection. We will need to see your driver's license when accepting a check from you.

PRIVACY POLICY: 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.