Where Do Our Tax Dollars Go? Ann Hartz Breaks It Down

Where Do Our Tax Dollars Go? Ann Hartz Breaks It Down

Before I get to your tax dollars, and where they went, I have a couple thoughts for you.

We’re still settling down from the flurry of last week and the passing of the April 15th deadline. There were MANY more procrastinators this year than in years past, in my opinion because of so much confusion in the marketplace.

In fact, it might be that YOU procrastinated, or that you (or your friends) slapped something together at the last minute, filed it, and … you (or they) might be feeling a little uncertain.

Well, I have a solution for that below.

Because of tax reform, I know for a fact (at least based on some Facebook and LinkedIn group messages that I’ve seen) that many of our Des Moines tax professional colleagues out there were scrambling to make sure things were filed properly. And some weren’t so certain about the tax positions they were taking for their Des Moines clients.

That’s why I have an offer for you (or for your friends).

Many tax businesses don’t provide this service, but even though we’ve completed most of our clients’ returns, we WILL review any of your friends’ returns — at no charge.

See the below special message, for more details:

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“No Charge” Return Review
Special Gift Certificate

As a complimentary service this year, we will provide a Return Review to any non-client. 
We will also review prior year returns from clients who did NOT have us handle their taxes during the year under question. 
No charge will be made, unless we have to file an amended return.
Email our office (using the email at the top of the page)
or call (515) 259-7779 to set up this complimentary service.
Deadline: Friday, May 10th, 2019

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Take advantage — in fact, this is a great blog to forward to any friends you might have that could use an extra set of eyes.

Also passing last week was the annual “Tax Freedom Day“, as tracked by the Tax Foundation. This is the date when the nation as a whole* has earned enough money to pay its total tax bill for the year.

(*It should be noted that this is only a collective average and does not accurately reflect the number for you or for your neighbors — it is the average tax burden for the overall economy, rather than for specific subgroups of taxpayers.)

And, as in years past, Americans will collectively spend more on taxes in 2019 than they will on food, clothing and housing combined.

Now, it’s part of our job to keep your tax bill down, but we can’t do much about the nation’s tax burden, aside from casting ballots. But we can help your friends, family and neighbors. (Or maybe even YOU, if you for some reason didn’t use our services this year.)

But all of those tax dollars have to go somewhere…

Where Do Our Tax Dollars Go? Ann Hartz Breaks It Down

“Life is what happens to us while we are making other plans.” -Allen Saunders

Unless you filed an extension, the 2019 tax season is a wrap.

I hope that you were able to file your taxes on time … what’s more is that I hope you were able to file ACCURATELY on time. Something easier said than done.

If your taxes brought unusual difficulty and frustration to you and your family this year, I get it. I would love an opportunity to sit down with you and figure out a new approach so that this time next year, you can walk a little taller. As taxes become more automated through online e-learning platforms, some folks favor convenience over accuracy. Although a sit down with each other takes a little time out of your schedule, it also helps you file with greater confidence.

Let me know if you’d like a professional in your corner. In addition, it’s important we act soon … “waiting til next year” will only bring more anxiety to your plate, and that’s the last thing I want.

Now, if you are one of the estimated 153 million individuals to file your taxes this year, I want to give you some insight into where those hard-earned dollars are going to help our nation grow.

Below are some numbers detailing allotted tax dollars for the 2018 fiscal year.

Total Outlays: $4,108 Billion

Note: “Outlays are generally accounted for on the basis of checks issued, electronic funds transferred, or cash payments made. Certain outlays do not require issuance of cash or checks.”

Defense: $665 Billion

Social Security: $988 Billion

Medicare: $589 Billion

Interest on Debt: $325 Billion

Other: $1,542 Billion

Total Receipts: $3,329 Billion

Note: “Receipts included in the report are classified into the following major categories: (1) budget receipts and (2) offsetting collections (also called applicable receipts).”

Individual Income Taxes: $1,684 Billion

Social Security and Other Payroll Taxes: $1,171 Billion

Corporate Income Taxes: $205 Billion

Other Taxes and Duties: $270 Billion

Federal Deficit: $779 Billion

Note: The federal deficit is when government expenses exceed the amount of tax dollars accrued.

If you have an extra five minutes on your hands, and really enjoy speed reading, this Treasury Statement (quoted above) from September 30, 2018 will give you an in-depth look at some of the numbers behind the numbers.

I’d like to hear what you think as well as some questions you might have … perhaps at our first meeting. 🙂

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

A Thank You To Our Des Moines Clients For A Successful 2019 Tax Season

A Thank You To Our Des Moines Clients For A Successful 2019 Tax Season

This has been one of the wildest tax seasons in recent memory. I saw a note from the IRS last Friday (the 12th) that as of that day, 50 million taxpayers had yet to file. LOTS of extensions happened out there, as all of the tax law changes caused a bunch of confusion.

It’s our hope that our Des Moines clients didn’t experience what so many software users and clients of other firms did — mass confusion and frustration. In fact, we heard from quite a few of our clients who were pleased by the process.

But we are, in fact, human. And we are, in fact, tired. But we are (in fact) not letting up.

You see, unlike some Des Moines tax and accounting professionals, we make it a point to do a bit more than simply “fill out forms” on your behalf. I’ll tell you more about that in a moment.

Because the loudest thing I want you to hear from this post is this: THANK YOU for your trust.

It is no small matter to place your family’s financials in front of another, and I know that for some it can bring with it some anxiety or discomfort. That’s why we work so hard to be people that you can trust to understand, to come alongside, to advise, and to help.

It’s why I make it a point to send you these strategy notes every week (even when we are slammed with work), and it’s why we work so hard to stay up-to-date on all of the latest tax code updates and regulatory changes that come like clockwork, every year. Especially this year.

We take your trust seriously. THANK YOU for it, and for your business.

But this work also brings with it a certain joy — because this past season, we got to see remarkable lives of generosity, love and integrity laid out before us with regularity. For some, this was reflected by their financial statements — and for others, this was displayed by the warmth, kindness and delight by which you communicated with us during this process.

So again, THANK YOU.

This much is clear to me: No matter the state of your financial life, nobody (not the IRS, not anyone) can take from you the strength derived from a life lived with gratitude and joy.

You’ve reminded us of that once again, this year. What a privilege it has been to serve you this 2019 tax season … and we look forward to years of service to come.

More thoughts to come soon, of course. As I said, we’re not letting up.

But for now, I’m taking a nap.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

2018 Tax Extensions and Payment Options for Des Moines Taxpayers

2018 Tax Extensions and Payment Options for Des Moines Taxpayers

Yep. This is the final week, and the personal filing deadline (April 15th) is *so* close.

It’s officially the final week of tax season — and we are working our tails off for you and our other Des Moines clients.

But I’m still taking the time to step away for a moment and write to you, my friend. And if you have all your papers in, and are waiting for our completion — fear not — my team is hard at work, as I type…

Oh, and if for some reason you haven’t done ANYTHING with your taxes yet, it’s actually not too late. More about that in a moment.

But first, there’s a lot of “business” in this note, so please make sure you read it all — it could make a huge difference. (Honestly, I much prefer writing the notes that are a little more “interesting”, but this is really crucial information.)

And you know what else would make a huge difference? If we heard from you. Would you leave us a review on Google or other online platforms for potential clients to see? We have found that these sources can be so helpful for people evaluating their options, and would love to have as much information there as possible. Thank you!

But yes — this is often our busiest week of the year (so please be understanding), and it’s also the week when we receive, with clockwork regularity, many questions about extensions and payment options.

But before I get to that: other deadlines that fall on April 15th this year:

1) Estimated taxes for the first quarter are due.

2) Want to open or contribute to an IRA or Roth IRA for 2018? Gotta get that done by Monday the 15th.

3) Final day to max out contributions for your 2018 HSA (Health Savings Account).

4) Claim any refund money from an unfiled 2015 return. (There is $1.4 BILLION in unclaimed refund money out there for that year — but only available if you didn’t file.)

5) Most states’ tax deadlines also fall on the 15th. (Exceptions – DE 4/30; HI 4/22; IA 4/30; LA 5/15; ME 4/17; MA 4/17; OK 4/20; SC 5/1; VA 5/1; any state with no income tax.)

Alright — let’s dive into my thoughts on extensions and payment options (if you aren’t able to pay your tax bill right away)…

2018 Tax Extensions and Payment Options for Des Moines Taxpayers

“If you spend too much time thinking about a thing, you’ll never get it done.” – Bruce Lee

As you know, this upcoming Monday, April 15th is the filing deadline for a federal tax return (except for you Maine and Massachusetts people — you get until the 17th). If you need more time to get your paperwork complete, you need to file (or have us file on your behalf) this form: http://www.irs.gov/pub/irs-pdf/f4868.pdf with the IRS by the end of the day on the 15th (the 17th for ME and MA residents). This gives you an automatic six-month (until October 15, 2019) extension of time to file. 

Here’s the deal: An “Extension of Time to File” is not an “Extension of Time to Pay”, unfortunately. The extension simply gives you an automatic six months of additional time to get your paperwork together and file that return. But, if you owe more than what you paid with your estimate, you’ll be accumulating penalties and interest on the difference — so PLEASE don’t take the entire six months to do this!

So, when filing your “Extension of Time to File”, you’ll need to estimate what you think you owe to the IRS. This should not be pulling numbers out of thin air (or other various body parts). You’ll still need to go through your receipts and tax documents and get them “somewhat” organized. 

From here, you can estimate both your income and your expenses, and then approximate what you owe Uncle Sam. Keep in mind that this is an ESTIMATE. Then you’ll have to pay what you estimate you owe at the time we file for the extension.

You can do this all electronically through our office, you can mail in the form WITH estimated payment (must be postmarked by the 15th), or you can call a specialized provider and pay by credit card. We can provide you with the appropriate number to call.

If you cannot pay your taxes due for some reason:

1) Pay as much as you possibly can right now.

2) You can ask for (and often receive) an extension of up to 120 days to PAY: https://www.irs.gov/taxtopics/tc202.html. It requires a phone call to the IRS. 🙁

3) “Financial hardship” delay: This is if paying your tax bill would demonstrably affect your ability to pay your other bills. Interest and penalties still accrue, but it’s better to register this with the IRS than to simply ignore the bill.

4) Installment payment plan: If you owe less than $50K in taxes, you should usually be able to get an installment payment plan of up to 72 months, simply by asking for it. If this is something you are considering, please let’s talk it over to make sure we come up with the best plan. But you can apply online for this here: https://www.irs.gov/Individuals/Online-Payment-Agreement-Application

5) Negotiate: This is NOT something to try on your own. We can help, but the number of “Offers in Compromise” that get accepted each year are quite small and a knowledge of how the system works is important.

6) Using existing credit sources (credit card, HELOC, private loans): Some tax advisors would quickly recommend this, but I would NOT recommend you go this route. If you’ve exhausted the options above, do this instead…

7) Sell something you don’t need anymore. Always a pretty good plan anyway.

That was a lot of information. I truly hope it is helpful.

But regardless, we’re in your corner.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

An Under-Utilized Tax Break For Des Moines Taxpayers: Summer Day Camp

An Under-Utilized Tax Break For Des Moines Taxpayers: Summer Day Camp

Okay, that’s a joke. We’re so busy with our client work, we can’t really enjoy the college basketball or the new baseball season, but at least we still have April Fools.

And yes, I know that day has already passed. More coffee please.

But speaking of things getting past us — are YOU procrastinating with your taxes?

If so, you’re not alone. The most recent IRS data we’ve seen as practitioners shows that overall, tax filing is slower than in recent years. The new tax laws, the earlier government shutdown, and lots of confusion out there has meant a lot of late-filers.

Perhaps that’s you? Or some of your Des Moines friends?

In fact, did you know that some tax firms (and “off the shelf” software companies) actually raise their prices on procrastinators? That’s not how I believe clients should be treated.

Now, speaking of things that are often missed…

An Under-Utilized Tax Break For Des Moines Taxpayers: Summer Day Camp

“Deep summer is when laziness finds respectability.” – Sam Keen

As our weather has finally (maybe?) turned toward spring, we know summer is right around the corner. I want to give you three ways you can look out for tax savings when it comes to summer day camps. Taking this information into account will help you plan your summer accordingly, as you think about signing your children up for this win-win opportunity.

Decisions, Decisions

Before we get to the tax part, a quick word on summer day camps.

You might have noticed I’m not saying just “summer camp”. Traditionally, overnight summer camps have been a fun experience for kids, but without a doubt, day camps have grown exponentially across the U.S. as they are often cheaper and more convenient.

If you are curious about summer day camps for your kids or grandkids, just Google “summer day camps in Des Moines (or your specific area)” and a plethora of options should come up for you to check out.

Summertime Taxes

Ready for the good news now (and something your parents might not have known)?

The Child and Dependent Care tax credit directly applies to summer day camp costs. The tax credit covers up to $3,000 for one child and $6,000 for two or more.

However, you won’t see a tax break for the exact same amounts you pay. Why? The tax credit you receive will merely be a percentage based on your annual income. There is some math involved, and this outline via IRS.gov will help on the technical side of things, but let me throw something else your way:

The summer is a great time for us to schedule our first meeting related to your 2019 taxes. I would love to help you approach tax season next year with more confidence than ever before. As this tax season winds down, please reach out and give me a call. Some of these tax credits (like the Child and Dependent Care credit), the math and legal terminology can be confusing. But that’s why I want to help.

Right here: (515) 259-7779

Now, while the kids are away, make sure some cash can stay.

Worthy To Note

Lastly, it’s important to note this summer day camp tax break only applies to children under 13 years old. The child also needs to be considered your dependent. And remember the break won’t count towards overnight camps, only the growing-in-popularity day camps like we mentioned before.

As you gear up for seasonal sunshine and kids running rampant, know there is some cash (and sanity?) you could save … all you need to do is send your kids to day camp and give me a call.

And don’t forget the sunscreen.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

Ann Hartz’s Under-Utilized Pet Tax Deductions

Ann Hartz’s Under-Utilized Pet Tax Deductions

Apparently, there are some politics things happening these days.

But even more apparently, the tax deadline is three weeks away.

Politics? As the young people say, ain’t nobody got time for that.

But you know what we DO have time for? Saving you a boatload on your taxes, and finding creative ways to do that, even if you don’t think about it.

I have an example for you today, but before I get there, allow me also to inform you that there is currently $1.4 billion (yes that’s with a B) in unclaimed tax refunds sitting on Uncle Sam’s books right now from 2015. If you somehow didn’t file a tax return in 2015 (or maybe you did, and you just … aren’t quite sure it was done right), well, we’re right here. Let’s help you get what is rightly YOURS.

It’s what we’re here for.

And you know what we’re also here for? Creative tax deductions. You “pet”cha

Ann Hartz’s Under-Utilized Pet Tax Deductions

“The better I get to know men, the more I find myself loving dogs.” – Charles de Gaulle

I’m going to dip into the “something you don’t hear every day” file with an interesting bit of information: our pets can save us some serious cash.

Well, it may not be serious cash in terms of a massive amount, but I am serious about this interesting set of pet tax deductions.

Here are a few ways a pet could save you, or someone you know, money in the future. Man’s best friend just got friendlier…

Medical-Related Expenses

Many Des Moines individuals have been diagnosed with a physical or mental condition that requires a trained therapy animal.

I’m here to tell you a therapy animal can be counted as an itemized medical expense.

However, I’ll reiterate … this is only the case if your doctor has prescribed you one of these therapy animals. No matter how comforting it is to get home and snuggle with your dog after a long day at work, that’s not the kind of thing that qualifies.

The write-offs mostly pertain to food, veterinary bills, training and grooming.

On Guard

If you have a guard dog that looks over your Des Moines business after-hours, you might be eligible to write off similar expenses (food, vet, training, etc.) for a job well done.

I say “might be eligible” because it’s important you take notes of the hours your dog works on a weekly basis.

But the IRS might call you to question when they realize that your “guard dog” is your Corgi lounging around the office. Make sure, if you are going to go through the effort of keeping solid records for your guard dog, that it’s actually a guard dog.

Fostering Hope

Here is something you might not know about in the first place: there is a need out there for fostering animals while shelters find long-term homes for a pet.

This is certainly a noble cause, especially if you already have pets of your own. And write-offs accompany your effort to find those pets a permanent place. Again, it’s important you keep scrupulous notes and documentation about what you spend on your foster pets before you apply for a charitable deduction.

Of course, any pet-owner will tell you that pets are certainly more than tax write-offs. And hopefully you are now aware of one more way they help us out.

All the more reason to treat our animals well. They clearly care for us.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

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