What to Bring to Your Tax Appointment

If you are having your taxes prepared by a professional this season, it is up to you to provide them with proper documentation. Insufficient or missing paperwork can result in a lower tax return, or even an audit.

While every taxpayer’s situation is different, this is a good general list of items you should bring with you to your tax appointment:

Personal Information

• Your social security or tax ID number
• Your spouse’s full name and social security or tax ID number
• Your dependent’s full name, birthday, and social security or tax ID number
• Three years’ worth of previous tax returns

Income Statements

• W-2 Forms
• Unemployment forms
• Jury duty records
• Rental income
• Hobby income and expenses
• Gambling income
• Prizes and awards
• Trusts

Itemized Deductions

• Mortgage statements
• Healthcare expenses
• Employment-related expenses
• Records of charitable donations
• Job search expenses
• Moving expenses
• Theft losses
• Childcare expenses

Savings & Investments

• Interest and dividend income
• Income from sales of stocks
• Dates of stock acquisition, and the price you paid for them
• Other expenses related to your investments

Retirement Funds

• IRA contributions and total value
• Income from pensions
• Social security income

Vehicle Information

• Total miles driven
• Total business miles driven
• Amount of parking and tolls paid

If You Are Self-Employed…

• 1099-MISC
• 1040ES
• Income and expense statements

If you received any other tax documents which weren’t listed above, you should also bring those. When in doubt, it’s always better to bring something!

American Investment Planners, LLC offers professional tax preparation services to individuals and businesses across the country. Let us make your tax season less taxing. To schedule an appointment with one of our tax professionals, please call (516) 932-5130, or email info@americaninvestmentplanners.com.

All You Need To Know About Tax Extensions

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

For those who were unable to complete their tax returns by this year's April 18th or 19th deadline, the IRS offers what is known as a tax extension to provide additional filing time. However, in order to be granted a tax extension, taxpayers must submit a request for one prior to the original deadline - once approved, this will open up an additional 6 month window for filing.

If there ever comes a time where you need to file for a tax extension, here are a few important things you should know:

1. Tax extensions grant extra time to file, not extra time to pay any taxes that are due. As you submit Form 4868 to request an extension, you'll need to also submit payment for taxes that are owed (if applicable) so that you don't wind up paying more in the future.
2. You can get a tax extension in one of three ways: 1) You can e-file Tax Form 4868, 2) You can mail the IRS a hard copy of Tax Form 4868, or 3) You can pay either all or part of what you expect you will owe using the Electronic Federal Tax Payment System. Before you proceed, just be sure to read through Tax Form 4868 in its entirety so that there are no surprises about what the extension entails.
3. Since you are still expected to pay your taxes by the deadline, you will have to estimate how much you owe at the time of filing. Should the IRS feel that you did not make an effort to do so after reviewing your request, there is a chance that they will not grant you an extension.

Life is filled with unexpected circumstances, so if you do ever have the need to file for a tax extension, there is no need to worry so long as you have a good understanding of how they can help! To learn more about tax extensions, please contact the American Investment Planners LLC tax planning team at (516) 932-5130.

What To Do When You Miss The Tax Deadline

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Although you might feel that with all of the reminders it would be difficult for anyone to miss the tax deadline, the truth is that many people do miss it each and every year. And yes, although filing late can result in some penalties, we're here to calm some of the stress you may be feeling to let you know that you still have options if the deadline has been missed:

1. File ASAP: The sooner you can file your tax return and pay (if you owe), the better. If you do wind up having taxes to pay, the less you delay, the less you may be charged in interest and in penalties.
2. Apply for an extension: If you require more time to prepare your tax return, consider applying for a tax extension. Although doing so will not give you any longer to pay what you owe, it may give you piece of mind knowing that you have some extra time to get your tax return ready.
3. Pay what you can: A common reason people struggle with the tax deadline is that they owe taxes, but can't afford to pay them all at once. When this is the case, make it a priority to pay as much as you can, as soon as you can. While you will likely still be responsible for penalty and interest charges, if you pay as much as you are comfortable paying right off the bat, it may make those penalty and interest charges not as high.
4. Ask for an installment agreement: The IRS offers something called an installment agreement for qualifying individuals who require more time to pay their taxes. To apply, start by checking out the IRS Online Payment Agreement Tool - you'll need your name, an email address, physical address, date of birth, filing status and your social security number.

Should you be owed a refund from the IRS, your best bet is to follow tip number one and file as soon as possible so that you get your refund without too much of a delay. Remember, if you do not file within three years, the refund you are entitled to may no longer be up for grabs.

At American Investment Planners LLC, we have a strong team of financial planners with experience in taxes and tax planning that are ready to help you if you have a concern about missing the tax deadline. To speak with one of our financial advisors, please give us a call at (516) 932-5130 or email info@americaninvestmentplanners.com today.

When Can You Expect Your Tax Refund?

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

If you've only filed your tax return recently and were given the good news that you'll be getting a refund, we bet the next thought on your mind is, "when can I expect it?" While unfortunately we can't say you'll receive your refund immediately, the good news is that as long as everything goes smoothly, you can expect to see it soon! 

According to the IRS, most refunds are issued in less than 21 calendar days. That means at the most, you should really only have to wait about three weeks! The IRS even offers a tool called Where's My Refund? that allows you to track the status of your return and see your expected refund date. 

Is there a way to get your refund sooner than the IRS anticipates?

A frequently asked question about tax refunds is centered on calling the IRS to speed up the process. Unfortunately, calling the IRS to inquire about your refund will not help you get it any faster, so you'll need to sit tight! Unless your tax return requires further examination or processing, the "less than 21 calendar days" guideline is your safest bet to follow. However, don't forget to consider how long it takes for your bank to process direct deposits or how long it takes for you to receive your mail, as both of these can certainly impact how long it is before your refund is available for use.

Reasons why you won't see your refund in 21 days or less.

The IRS explains that the following circumstances may cause your refund to be delayed:

1. There are errors with your return.
2. Your return is incomplete.
3. Further review is required.
4. Identity theft or fraud has been noted.
5. You submitted Form 8379, Injured Spouse Allocation.

Should any of the above apply to you, the IRS will contact you via mail to discuss the need for further information.

If you have additional questions about tax refunds or have a concern about this year's tax return, please do not hesitate to contact the team here at American Investment Planners LLC at (516) 932-5130.

Reminder! Tax Scams You Need To Be Aware Of

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Although the tax deadline is only a few weeks away, there is still plenty of time to be targeted by scammers who are looking to get a little extra out of you during this tax season. Earlier this month, we warned our readers about three of the most common tax scams that we often hear about, and today, we're here to remind you about them and share our recommendation for what you should do if you think a scammer is coming after you; read more below.

Common Tax Scams

While some tax scammers may use an original approach, three of the most common that people experience are: 

1. Phony phone calls
2. False links in emails
3. Frivolous arguments

One of the most important things to remember is that the IRS' preferred form of communication is U.S Mail, so if you ever get a phone call or an email from someone who claims to be a representative, approach it with much caution. And remember, the IRS will never ask you for your financial information over the phone, require you to pay without actually sending you a bill, demand payment without giving you the opportunity to ask questions or insist that you use a certain method to pay your taxes - if either of these situations present themselves to you, hang up and/or ignore the email.

Another important thing to remember is that the IRS will never threaten you with arrest. Scammers will often make you think that legal action will be taken against you if you do not comply with their request, but that is an immediate sign that you are dealing with someone who is falsely representing themselves.

Where frivolous arguments are concerned, we'd all love to be told that we are exempt from filing taxes, but the truth is that we are all required to file no matter what, so if someone positions you as the "lucky one" this year, don't fall for it!

Actions To Be Taken

If you suspect that you're being targeted by a scammer this tax season, the best thing to do is to contact your financial planner so that they can confirm if what you're being told is true or false. Then, let the IRS know about it - here is a list of things you should do if you receive IRS-related communication that seems rather suspicious.

Whether you actually experience a tax scam or not, know that we at American Investment Planners LLC want to see you and your information protected at all times, and we can help! To learn more about our financial planning services, please visit our website or give us a call at (516) 932-5130 today.

Smart Uses For Your Tax Refund

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

We all walk into our tax appointments with a glimmer of hope that the outcome will be receiving a nice refund from Uncle Sam, and when that's the case, it feels like we're on cloud 9. But let's not get too ahead of ourselves - we're sure that just like us, you have some ideas for what you'd do with your tax check, but you shouldn't just go out and spend it without thinking.

If you want to get the most benefit out of your tax refund this year, here are a few things we suggest doing with it:

Add it to your retirement fund: Even if you contribute to your employer's 401(k), you may not be saving as much as you need to for retirement. So, take this extra bit of cash and stash it away in a savings account that you have dedicated to this point of your life. 

Save for college: Have a child at home that you'll be sending off to college soon? If you plan to help cover the cost of tuition, put all or some of your tax refund aside so that you have it ready when the time comes.

Invest: If you've always thought about investing but weren't financially able to before, use your tax refund to get started. But before you do, keep in mind that finding the right investments can be tricky, so you should meet with a financial planner like ourselves to determine a strategy that's right for you!

Pay off debt: Did you make a large purchase recently that's been taking some time to pay off? If so, use your tax refund to reduce how much you still owe! For those of you with expenses that have a high interest rate, consider putting your refund towards those payments so that you can help knock down how much interest you accrue moving forward.

Looking for more ideas on what to do with your tax refund this year? This article from Kiplinger has some answers!

At American Investment Planners LLC, our goal is to help our clients achieve financial security and build a legacy that they can pass on. If you have yet to work with a financial planner, please give us a call at (516) 932-5130 to learn how our products and services can be of help to you.

Tax FAQs

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Although we all wish they weren't, taxes can be pretty tricky, and unless you have an extensive background in the financial field, understanding them can take a while to master. Are there tax related items that you're still unsure of? Considering that tax season requires you to place a lot of your focus on your finances, we've collected a few of the most frequently asked questions regarding the topic to help make these tax heavy months a bit easier on you - check them out below.

Q: Am I still able to claim my child as a dependent?
A: In order to claim your child as a dependent, they will need to meet either the qualifying child test or the qualifying relative test. For the qualifying child test, your child must be younger than you AND must either be younger than 19 or be a student and younger than 24 at the end of the calendar year. If they are completely disabled, they can be of any age. Should your child meet the qualifying relative test, there is no age limit to define whether you can or can not claim them as a dependent, so check with your tax preparer to see if they meet the eligibility requirements.

Additionally, along with the above two tests, you can also claim your child if they qualify in the dependent taxpayer test, citizen or resident test, and the joint return test.

Q: Do I have to claim my child as a dependent to be able to file as head of household?
A: Not necessarily - depending on the circumstance, you may be able to still file as head of household even if you did not claim your child as a dependent.

Q: I noticed a mistake on my federal return after filing - what can and should I do?
A: The answer to this all depends on the exact mistake that was made. Generally speaking, any mathematical errors should be found by the IRS when processing your return, so there's a chance they will just correct it for you. If you are missing forms, expect to hear from the IRS - they'll reach out for the information they need to complete processing. If, however, the mistake has to do with filing status or changes need to be made to things like your income or deductions, the next step is to file an amended or corrected return - this can be done through Form 1040X. 

Note: keep in mind that it can take up to 16 weeks for the IRS to process an amended return.

Q: How can I let the IRS know that my address has changed?
A: Notifying the IRS of an address change can be done in a number of ways, with one of the easiest being to use your new address on this year's tax return. However, if your address changes after filing and you'd like to notify them in advance of next year's tax season, you can submit Form 8822 or Form 8822-B, send them a written statement, contact them via phone or in person, or send an electronic notification. 

Q: If I retired last year, do I need to pay taxes on the Social Security benefits I've received?
A: Your Social Security benefits include any monthly retirement, survivor and/or disability benefits. To determine how much of your Social Security benefits need to be included on your tax return and used to calculate income tax liability, you'll need to take a look at your total income and benefits from the taxable year. Once you have this information, compare the base amount for your filing status (contact us to learn how you can figure this out) with the total of the rest of your income (except any tax-exempt interest) and 1/2 of your benefits.

For those who are married and filing a joint return, you'll need to combine the income and Social Security benefits of both you and your spouse to determine how much of your benefits are taxable. In situations where your spouse did not receive any benefits, you'll still need to combine their income with yours.

For more answers to tax FAQs, check out this section of the IRS' website.

At American Investment Planners LLC, we are fully staffed with several tax professionals who know just how difficult it can be to truly understand the nature of taxes. So, if you have additional questions about certain tax related topics, please do not hesitate to give us a call at (516) 932-5130 - we'd be happy to help!

Tips For Filing Taxes As A Single Parent

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

It's certainly not unusual to get confused when it comes to filing status - there are so many different options and variations of those options that it can be hard to keep up with what's what. But as your family financial planner, we're here to clarify anything that may not make sense at first, starting with three things that single parents need to know when filing:

Head of household: It may seem obvious to list your filing status as "single," but when you file as "head of household" instead, you put yourself in a position that may offer more benefits. Overall, you're likely to pay less in taxes when you file this way, and you might even be able to claim higher deductions. If you were not married on the last day of the previous year, had children who lived with you for six months or more, and were able to provide more than 50% of the income needed to support your home, you're eligible to file this way.

Claiming dependents: According to the IRS, a child is considered a dependent if they lived with you for at least six months of the year and were financially supported by you during that time. Depending on the custodial agreement you have with your child's mother or father, you may be the one to claim them every year, or, you might be on an alternating yearly schedule. If it's your turn to claim your child, make sure you do so that you become eligible for more credits and deductions.

Child care credits: If you are working and earn an income or are a full-time student who requires someone or a program (such as an after school program or camp) to look after your child, claim the child care credit. In order to be eligible, your child must be younger than 13 years of age, and if it's a person who watches your child rather than a program, that person may not be their other parent. 

Running a home and caring for a child or number of children can be a difficult task for any one individual, so there's no need to put any more stress on yourself come tax time - that's what we're here for. The team at American Investment Planners LLC has experienced many of the same situations our clients have, so we know exactly what solutions to offer.

For more information about our tax planning services, please visit us on our website or give us a call at (516) 932-5130.

Tax Preparation Tips For Senior Citizens

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Things change as we get older - it's inevitable - and a lot of those changes require careful planning so that we're ready to take on whatever situation or circumstance comes our way. From where we'll live to who will care for us and how we'll support ourselves without a steady paycheck, there's a ton to go over! For us, a major topic is tax planning - how does the process of filing a tax return change once we hit retirement age and beyond? Find out below.

The Standard Deduction for Seniors:
If you and/or your spouse are 65 years of age or older, you can be eligible to receive a higher standard deduction amount if you don't itemize your deductions. Furthermore, if you or your spouse have vision troubles and are considered blind, you may be able to receive an even higher standard deduction amount than others. Just ask your financial planner - they'll be able to see what you qualify for.

The Credit for the Elderly or Disabled:
This credit is handed out based on a number of factors, including age, income and filing status. Where age is concerned, you and/or your spouse must be 65 years old or older, OR, if you have not reached age 65 yet, you and/or your spouse can qualify if you are completely disabled.

In addition to meeting the age qualifications, you must also meet the following where filing status is concerned: the income on line 38 of your 104o Form must be less than $17,500, $20,000 (when you are married and filing jointly with only one spouse who qualifies), $25,000 (if you are married and filing jointly and both of you qualify), or $12,500 (if you are married but filing separately and you have not lived with your spouse for an entire year). 

Regarding filing status, you'll also need to meet the following to qualify: the non-taxable part of your Social Security or other nontaxable pensions, annuities or disability income must be less than $5,000 (if you are single, the head of household, or a qualifying widow/er that has a dependent child), $5,000 (if you are married and filing jointly but only one spouse qualifies), $7,500 (if you are married and filing jointly and both of you qualify), or $3,750 (if you are married but filing separately and you have not lived with your spouse for an entire year).

For more details about the qualifications for this particular credit, check out this article from the IRS.

The Taxable Amount of Social Security Benefits:
Once you begin receiving your Social Security benefits, you'll need to take them into consideration when preparing a tax return. As you do so, you can use the Social Security benefits sheet found in IRS Forms 1040 and 1040A to find out how much of your Social Security income can and should be labeled as taxable. Of course, your financial planner can help you with this as well to ensure that no mistakes are made.

In addition to the above, senior citizens should also know that there are IRS-sponsored volunteer tax assistance programs available that offer FREE tax help to seniors who cannot prepare a tax return on their own. Of course, though, if you have a family financial planner that you have worked with on things such as retirement planning and estate planning, turn to them first as they already know your current financial situations well enough to help you prepare.

We at American Investment Planners LLC pride ourselves on being a financial planner for the whole family, which is why we want to help everyone - children, young adults, parents, grandparents, even great grandparents - with their taxes. To learn more about our tax planning services, please give us a call at (516) 932-5130 today.

Things To Consider Before Choosing A Tax Preparer

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

As a citizen of the United States, each and every year you're required to file taxes no matter what, so why not have someone to help you along the way? Although there are computer programs and softwares that can guide you through the process, the only way to really know that things are being done correctly is to work with a professional who is highly trained in the tax field. But like you would when buying a house or leasing a new car, it's important to do adequate research to find the tax preparer that's right for you. Below, we list a few things to consider before deciding on who you'll work with:

1. Their qualifications: You should always feel confident that your tax preparer has gone through all of the necessary training in order to be certified in this line of work. So, ask about their PTIN (preparer tax identification number) as well as their background and education (for example, are they a CPF, CPA, etc) to find out what makes them qualified to prepare a tax return.
2. Their history: It's always helpful to know what type of clients a tax preparer has worked with in the past - maybe the one you've found specializes in helping businesses, but you're more interested in someone who specializes in helping families. Furthermore, it's a good idea to find out how long they've been preparing tax returns for so that you can rest assured knowing they're familiar with the process.
3. Their fees: The IRS explains that "under no circumstances should all or part of your refund be directly deposited into a preparer's bank account." That said, don't hesitate to ask a tax preparer about their service fees beforehand and how they intend to claim them. Additionally, you should know whether they bill by the hour or a flat rate so that you know what to expect once services are rendered.

For more helpful hints on how to choose a tax preparer, check out these tips from the IRS.

Here at American Investment Planners LLC, we are staffed with extremely qualified CFPs and other tax planning advisors who are more than capable of assisting with tax returns during tax season. To learn about our team's qualifications, history and fees, or to make an appointment with us, please call (516) 932-5130.

What Is The PATH Act?

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

On December 18, 2015, the Protecting Americans from Tax Hikes Act (also referred to as the PATH Act for short), was officially signed into law. As a result, many popular tax breaks that people look for every year became permanent, with others also being retroactively extended. Though many of these tax breaks had initially expired at the end of 2014, thus not making all of them readily available to use when filing for 2015, those that have been extended and made permanent will certainly come into play as you plan for future tax seasons.


Permanent Tax Breaks 

As per the PATH Act, the following provisions have been made a permanent part of the federal tax code:

1. Classroom expense deduction: Teachers are permitted to deduct up to $250 in classroom expenses from 2015 - these deductions must be listed above the line on Form 1040 before the adjusted gross income. As of 2016, however, the amount has been indexed for inflation and may eventually include additional qualifying professional development expenses.
2. American opportunity tax credit: A credit of up to $2,500 for qualified higher-education expenses may be given for the first four years of a student's college experience.
3. Qualified charitable distributions (QCDs): Those who are 70 1/2 years of age and older are eligible to make tax-free qualified charitable distributions from their IRAs, with a total amount not to exceed $100,000 per year. These charitable distributions are to count towards these individuals' required minimum distribution.

Extended Tax Provisions

The following tax provisions have been extended through the year 2016 as a result of the PATH Act:

1. Energy credit: Those who have made energy-efficient home improvements can continue to receive a 10% credit for qualifying improvements, however, a total lifetime credit of $500 may not be exceeded.
2. Mortgage insurance premiums: Though they are subject to income phaseouts, tax payers may continue to deduct the premiums paid for qualified mortgage insurance as qualified residence interest - this can be filed for on Form 1040.
3. Qualified higher-education expenses: For those students who did not claim the American opportunity tax credit or the lifetime learning credit, the qualified higher-education expenses credit permits them to deduct up to $4,000 above the line on Form 1040. Similar to the mortgage insurance premiums credit, this is also subject to income phaseouts.

For a complete list of permanent and extended tax breaks, as well as for information about how Section 529 plans and small businesses will be affected, please be sure to check out the article "Hot Topic: PATH Act Makes Many Tax Breaks Permanent" in the February newsletter section of our website.

As a financial planning firm that assists clients nationwide, we at American Investment Planners LLC recognize how important it is to be on top of the latest laws and policy changes regarding taxes and various other financial circumstances. And since we are, we want to share that knowledge with you! If you're in need of assistance with tax planning or any other financial planning service, please do not hesitate to give us a call at (516) 932-5130 to learn how our team can help.

Above information courtesy of Emerald Connect.

Tax Scams To Be On The Lookout For This Season

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

It's always important to be on your guard and know when someone is falsely leading you into thinking you haven't done something, but it's especially important to be aware of situations like these during tax season - when money is involved, some people will do just about anything to get you to cough up a little cash. And since we've seen people become victims of tax scams all too often, we want to help you make sure that you don't fall into a similar trap. Below, we outline three very common tax scams that you need to be aware of:

1. Phony Phone Calls: If you receive a call from someone claiming to be a representative for the IRS, don't just hand over any personal information such as credit card numbers or bank account information. The IRS will never: ask for your credit or debit card number over the phone, threaten you will arrest, require you to use certain payment methods for your taxes, demand that you pay without giving you the opportunity to ask questions, or call you to discuss the taxes you owe without sending you a bill first. In fact, they normally contact you directly through U.S mail, so a phone call should always be approached with caution. Although the individual on the other line may seem convincing, and although their threats of jail time and legal action may be intimidating, don't get caught up in the fear they try to invoke - simply hang up.
2. False Links: Receiving an email from who you think is the IRS or a tax software company may cause you to think it requires immediate attention, but these emails are often dangerous and usually encourage you to click on links that will take you to harmful websites. Even when the link appears to be authentic, don't offer your Social Security number or any other personal information that can be used by a scammer to access any of your records - identity theft is a major issue during tax season. If you have the slightest hint of doubt over an email (or maybe even a text message) that you receive, don't open it. Like we said in example #1, the IRS tends to use U.S mail as their preferred form of communication, so a suspicious email may definitely be a sign of a scam.
3. Frivolous Arguments: We'd all love to hear that we are the lucky one who is exempt from paying taxes, but in reality, filing a tax return is something we all must face. So, if someone approaches you to tell you that you don't have to take part in tax season for any reason, such as that filing taxes is a voluntary process, don't take their word for it. Following along with a frivolous tax argument can lead to civil and criminal penalties, so never listen to anyone who tells you you're exempt from filing this time around.

So who and what can you trust in all of this? When it comes to filing your taxes, your best bet is to sit down with your family's financial planner - they have your best interest in mind and will always provide you with the most accurate information. And if you should suspect that you are being targeted for any reason, don't hesitate to contact your financial planner to confirm whether or not what you are being told is true.

Here at American Investment Planners LLC, we understand how serious tax scams can be, and it is our goal to keep our clients and their finances safe, especially during this time of year. If you have questions about tax scams or experience any of the above, please give us a call at (516) 932-5130 so we can put your mind at ease.