Below are some Frequently Asked Questions (FAQs) and answers from Hawks CPA. If you need more detailed information of have other questions, please don’t hesitate to contact us.
What documents do you need to prepare my tax returns?
The short answer is: anything you receive in the mail marked “Important Tax Document,” plus your own summary records of income and deductions. We will need bookkeeping records if you have a business. This short list is a simplification, but it drives home the importance of collecting documents and keeping organized. If you need more specific information, please call or schedule a meeting to review your circumstances in detail. Here is a list of common tax documents:
- W-2 forms from all jobs during the year
- 1099-MISC forms from self-employment or other income
- 1099-R forms from IRA, 401(k), and pension accounts
- 1098 from your mortgage loan(s)
- Property tax statements if not reported on 1098
- 1098-T for education related expenses
- 1099-SA and 5498-SAfor health savings accounts
- 1099-SSA for social security benefits
- 1095 form for health insurance information
- Schedule(s) K-1 (from partnerships, S corporations, etc.), unless prepared by this office
- 1099 Brokerage statements from stock, bond or other investment accounts
- Closing statements pertaining to real estate transactions
- Charitable donation documentation (acknowledgement letters, receipts, appraisals, etc.)
- Any tax notices received from the IRS or other taxing authorities
How long will it take to get my tax returns completed?
We plan to be done within two weeks of receiving all of your information, perhaps a little longer in the busiest times. We do try to exceed that promise at every opportunity!
How long should I keep my completed tax forms?
We recommend that you keep all tax forms and supporting documents for at least 5 years. This covers the IRS 3-years-after-filing limit and the CA 4-years-after-filing limit. We advise a minimum of 7 years for business records including payroll, billing, and bill payments. Contracts should be retained for several years after maturity. In some circumstances, you may want to keep tax forms and financial reports from your business indefinitely.
Why should I use a CPA to help with my tax returns?
Tax rules are complicated, and you have questions. You want to make sure you’re taking advantage of the deductions available, and making smart choices about your income, savings, retirement, and financing options. Hawks CPA can help with all of these, and we will teach you as much or as little as you want to know about them!
How much will my tax preparation fee cost me?
We will work with you to keep your costs within your budget. Ultimately, the cost is up to you, because we bill based on time and level of effort required, and you can keep that to a minimum by being prepared and organized. We can give you “homework” assignments to help keep costs down, or we can do everything for you if you don’t mind paying us – we’re happy to help!
Accountants can help out at various stages during the growth of your business. They can handle much more than just your payroll and tax returns. So when should you consider hiring an accountant for your small business?
How and why to hire an accountant:
Every dollar counts for business owners, so if you don’t know where you stand on a monthly basis, you may not be around at the end of the year.
According to Forbes® magazine, 8 of 10 small businesses fail within 18 months of starting. Hiring an accountant can significantly improve your odds.
What should I do about this letter I received from IRS (or CA, FTB, EDD, etc.)?
First, foremost, and always: please send us a copy. Sometimes these letters are simple “FYI” no-action-required notifications, and other times they present important questions. We can quickly determine the appropriate actions and tell you about options available in response to any letter, but only after we see a copy of it.
Why do I have to file the “Statement of Information” for my business?
The office of the Secretary of State has the responsibility of keeping track of all businesses registered in the state and requires you to renew, or confirm, your registration periodically. The forms required for your business type may be due every year, or once every two years, depending on the type of entity, and are due on the anniversary date of forming your business. For this reason, these forms are NOT part of your annual income tax filings. Please let us know if you would like our help tracking and filing these forms for you.