Tax Preparation

taxesTax Preparation

Our trained professionals can prepare and timely file your quarterly returns – from state excise tax and city taxes, to state and federal payroll returns.
We are also able to organize W2’s, 1099’s, and up-to-date financials for tax preparation.

Greetings from the tax office;

We hope that the holidays have been pleasant and you are all ready for the upcoming tax season.  Our year was a busy one.  We finished the remodeling of the old Knoxville Restaurant and moved into our new offices on May 1.  It took the rest of the summer to get organized, but the move was well worth it. We have private offices and a totally allergy free environment that is a joy to work in. And 10 parking spaces as well. We are fully handicap accessible for anyone who needs those services.  I worked hard on a video of the construction and have it playing in the waiting area. We hope you enjoy it.

It came down to the last minute – and then some – but Congress did pass the American Taxpayer Relief Act of 2012. Highlights of the bill include:

  • Permanent Alternative Minimum Tax (AMT) patch, adjusted for inflation. This will protect 30 million taxpayers from AMT liability.
  • Preservation of the Bush-era tax cuts for individuals earning less than $400,000 (AGI) and families earning less than $450,000. Tax rates will increase from 36% to 36.5% for taxpayers above those income thresholds.
  • Preservation of the $5 million individual ($10 million per couple) exemption for estate taxes. Estate value above that threshold will be taxed at 40% rate, up from the current 35%.
  • Increase in the dividends and capital gains tax rate from 15% to 20% for individual taxpayers earning above $400,000 (AGI) and families earning above $450,000.
  • An end to the payroll tax holiday. The social security withholding rate is reset to its previous 6.2% rate on the first $113,700 in earnings for each individual taxpayer.
  • Extension of the $1,000 Child Tax Credit, the enhanced Earned Income Tax Credit, and the enhanced American Opportunity College tuition tax credit.

The American Taxpayer Relief Act is nowhere close to the grand bargain as envisioned by the President and many lawmakers after the November elections. Effectively, it is a stop-gap measure to prevent the onus of the expiration of the Bush-era tax cuts from falling on the middle income taxpayers.  Congress must still address sequestration. Congress is likely to revisit tax policy and spending cuts when it tackles the expected increase on the nation’s debt limit in February.

We implemented changes last year regarding identification and signatures. These will continue in the 2012 tax return processing.  Again, we will be asking for information on where your children go to school, their primary pediatrician, and to obtain a copy of your driver’s licenses. Once we have this on file, we do not need to update unless something changes. There has been such an increase in tax return fraud; IRS is mandating that we verify household composition and income. This is for both for your protection against fraud, and for us to comply with IRS rules.  If you are eligible for Earned Income Credit, you will be asked to if the child lived with you for more than ½ of the year.  To qualify for head of household, you must have been the one that provided more than ½ of the expenses of the household. To determine that, we will need to know who lives in the household, and who pays the bills.

IRS has mandated that we cannot do a tax return without the original W-2s and 1099’s.  We also have to have all signatures prior to the submission of the return. We know this is a pain, but this is for your protection against tax preparer fraud.  Your signature has to be on file, as it is our authorization to go ahead and file your return. That signature is the legal signature that used to be on the paper file you mailed to IRS. Payment arrangements must be made at this time.

During our training this year, it was suggested that we obtain a limited power of attorney from our tax clients.  Therefore we are asking that you sign a limited power of attorney for us this year. This form will allow us to get copies of any letters that you receive during the year for your last 3 years tax returns. This is not authorization to make any agreements with the various agencies, this will only allow us to talk with IRS/PA/NY to get the information needed to determine the nature of the problem and start the process of response much quicker.  Our goal is to solve any of the problems with IRS/NYS/PA as quickly as possible. Please call us immediately whenever you get a letter of any kind.

We will again offer College Student returns at no charge. This child must still have their legal residence at home, and be a dependent on the parents return.  It must qualify for a short return and have no more than 2 states. We will offer a $75.00 discount on a return that has more than 2 states.

Thank you again for your continued confidence in our expanded tax practice and we look forward to seeing you again this year.
The Penn York Team

2012 Tax Rates

1040 $60.00
1040X $75.00
1045 $75.00

Additional Schedules:

Schedule A $35.00
Schedule B $10.00
Schedule C $75.00
Schedule C EZ $25.00
Schedule D $25.00
Schedule E $15.00 (per property)
Schedule E Pg 2    $15.00
Schedule EIC $25.00
Schedule F $150.00 and up
State $30.00 (per state)
Local $10.00

All Prices subject to change based on tax payer’s tax return