Taxes - My Tax Return

A number of states have community property laws mandating that each spouse legally owns half of the income and property of each other, even if legal title is held by only one spouse. Your tax return preparation is affected by whether you live in a community property state. We recommend you contact a CPA in your area for additional information on how these rules effect you directly.

Nine states are Community Property states. They are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

Credits reduce your income tax dollar for dollar. Deductions reduce your taxable income which is then taxed at a specific rate. $1000 of deductions at the 15% bracket is only worth $150. Therefore credits are more powerful than deductions.

Tax software programs are only as good as the user. Almost all CPAs use professional tax software packages to prepare their clients' returns. A CPA is licensed by the state in which he or she practices. CPAs are required to take continuing education courses every year to keep current. As you know, tax laws are always changing. CPAs spend twelve months a year actively preparing individual and business returns. While there is no guarantee, having a CPA prepare your return can often save you additional money on that return. Also, your time with family and friends is important. Having a CPA do your taxes means you do not have to waste hours or even days preparing your own return. Finally, when meeting with a CPA, you will be given advice and tax planning tips so that on next year's return you will be able to take advantage of various tax saving opportunities previously unknown to you.

The underlying rule is that you should keep documents such as receipts, cancelled checks and other income and expense items for three years from the date the return was due or filed, whichever is later.
There is no statute of limitations when a return is found fraudulent or when no return has been filed. The burden of proof of filing is unfortunately upon the taxpayer.
As a result, we recommend that records be saved as long as practical(at least ten years).
Some records should be kept indefinitely, such as property records, since when the property is sold, you will need to compute your gain or loss.
Also, you may not want to discard anything that refers to mutual funds and stocks that have capital gains or dividends reinvested, so you can prove your basis.