The Balance Sheet, Inc.

Bookkeeping Company | Tax Service

Accountants In West Palm Beach

(561) 842-1304

5725 Corporate Way, Suite 205
West Palm Beach, FL 33407

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Lessons You Can Learn from these Top Three Tax Questions

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Tax Lessons

We live and we learn. Mostly we learn by making mistakes. However, no one wants to learn about taxes that way. Instead, you can learn from these commonly asked tax questions.

1.  How long do I need to keep tax records?

According to the IRS, keep your tax records for three years. That is the period of time they usually are able to examine during an audit. Unless the IRS suspects fraud. Then they can look back seven years. Maxine at The Balance Sheet says to keep business returns for up to FIVE years and personal returns up to SEVEN. 

2.  Are my Social Security benefits taxable?

Possibly. Especially if a substantial amount of your income is from other sources. If this is your only source of income or the major source, then your benefits probably are not taxable.

If you are filing as an individual (either single or married filing separately) and your combined income is between $25,000 and $34,000, up to 50% of your SS benefits may be taxed. If your combined income is more than $34,000, up to 85% of your SS benefits may be taxed.

If you file married filing jointly and your combined income is between $32,000 and $44,000, up to 50% of your SS benefits may be taxed. If your combined income is more than $44,000, up to 85% of your SS benefits may be taxed.

The Social Security Administration defines your combined income as:

Your adjusted gross income
+ Nontaxable interest
+ ½ of your Social Security benefits
= Your “combined income“

3.  Should I hire a tax consultant to prepare my taxes?

The answer may be yes if the following statements are true about you:

A.  You are not a numbers person.

If you have struggled every year to file your tax return, then yes you should. If computing the numbers makes you worry you might be getting in over your head, turn this over to someone who enjoys the work. You could also save yourself from getting into trouble.

B.  You got married, divorced, had a child, or lost a spouse.

If this is true for you, then you may need help finding the best filing status for you. Your tax situation is probably different from your friends, neighbors, and work colleagues. You will need a professional to help you sort it. Also, some credits and deductions expire.

C.  You started a business.

This takes expert knowledge. Someone needs to teach you how to swim before you jump into the water alone. It is not very much like filing your personal tax return.

These are only three tax questions answered. To learn more, consult a professional tax consultant. In West Palm Beach, Florida, you can call The Balance Sheet at (561) 501-3080 or visit us at www.taxaccountingbookkeeping.com.

Ways a CAA (Certified Acceptance Agent) Can Help a Foreign Employee

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Certified Acceptance Agent

A Certified Acceptance Agent is a person, business or organization authorized by the Internal Revenue Service to assist individuals who do not qualify to receive a Social Security Number but need to be able to pay income tax. These individuals are often foreign employees working in the United States. A CAA helps them be able to work legally here by helping them get the necessary tax documents filed, and secure an ITIN (Individual Tax Identification Number).

Here are 4 ways a CAA can help you:

1.  Obtain an ITIN

As a foreign employee working for a United States Company, you are required to file a United States Federal Income Tax Return and possibly a State Income Tax Return. To do so you must have an ITIN. If you do not have and ITIN, a CAA (certified acceptance agent) can help you obtain one. This involves filing a form W-7, Application for IRS Individual Taxpayer Identification Number. The CAA can prepare your application and can certify your records to ensure your application is processed correctly and completely the first time.

2.  Authenticate your identity for the IRS

As part of the process for obtaining your ITIN, your identification papers will need to be reviewed and authenticated. The CAA knows exactly what documents you need and can certify them as authentic. Also, an added benefit of using a CAA is that you can send certified copies of documents, instead of originals. With an AA (acceptance agent) you will still need to send your original documents with your application.

3.  Submit your supporting documentation

The IRS needs to know who youare, where you are from and about your family as well. You need to provide documentationthat the IRS deems acceptable to prove who you are and where you are from. If the IRS does not accept your documentation, you will not be issued an ITIN. A CAA is authorized by the IRS to examine your documents and submit a Certificate of Accuracy (COA) along with your documents. The IRS will accept this as proof.

4.  File a tax return

The documentsyou need to providewill vary depending on several factors. Filing a tax return can be stressful and complicated. Errors on your tax return can delay a refund or even put you at risk for an audit. Many CAAs also prepare tax returns.We recommend you get help from a CAA.

Are you still wondering how a Certified Acceptance Agent can help you? Contact us for a free consultation at (561) 501-3080.