File Separate or Married?

One question I get all the time, "Is it better for me to file Married Filing Separately vs. Married Filing Jointly?" It DEPENDS. The answer I give everyone who asks me a tax question, because it does depend on a lot of other items that go into your return. How much you make, how many kids, if you itemize and without knowing this, I can't tell you a right answer... I can tell you, with the experience I have, more times than not, MFS does not benefit. There are disadvantages to MFS and among them are: Lost Credits - specifically the Childcare expenses & Earned Income Credit. Unless both the spouses live apart for last six months of the year, no one can claim the childcare dependent credit. You will also loose education benefits such as the Tuition & fees deduction and the student loan interest deduction. Another disadvantage is, if one spouse itemizes, the other one must itemize as well. If one spouse takes the standard, the other one must take the standard deduction too. Unless you have a huge amount of itemized deductions, one spouse could itemize lower than the standard deduction. If there is social security involved, a greate percentage of Social Security benefits may be taxable, unless again if spouses lived apart for the entire year. Some reasons to file separately include, but are not limited to: 1.) No joint liability. Each spouse who signs a joint return is responsible for the accuracy of the return as well as the payment of the tax. A spouse who files separately is not responsible for reporting or paying tax on items attributable to the other spouse. 2.) Some couples do pay less tax filing separately. Spouses with similar and almost equal incomes will generally owe the same tax under either filing status unless one spouse has medical expenses, casualty losses or employee business expenses subject to a percentage of AGI. If one spouse has significantly higher income than the other, the couple will generally pay less tax filing jointly. The best advice I can give is run you and your spouse's returns a couple of ways. A) MFJ B) MFS - itemized C) MFS - non-itemized D) If there is a kid involved, claim on one spouses return for B & C and then the other spouse for B & C. Hope this helps!

Portals Are Here to Stay

With utilization of technology so prevalent in the business world, changes in the way CPA firms deliver a client's tax return has been a struggle. While the most prevalent delivery method is paper, many are starting to replace or supplement that method with delivery in some digital form. Federal and state laws continue to get stricter about maintaining the security of clients’ Social Security numbers. Client portals - secure online storage areas—offer an alternative to e-ma...il for communicating and collaborating with clients. In fact, these client portals are much more secure than email, and have an security encryption much like that of banks who use online banking. Here’s how portals typically work: The accountant uploads the tax return—or any other information the client may want—to a secure Web site, where each client has a personal password and can log on to retrieve information. When the accountant adds a new document, the client receives an e-mail with instructions on how to log on and view it. There are other benefits to using the client portal as well. 

1) Alleviates challenges for clients that live out of the immediate area and have difficulty physically coming into the office.

2) Provides an effective, efficient and more secure means of transmitting and storage of important documents
 
3) Provides clients with electronic copy of the tax return they can access at any time
 
4) Reduces impact on the environment.

I am curious how many of you already receive your tax return via portal? Would you consider this?