Jared and I just got home from our accounting appointment! This is the very first time either of us has enlisted such help, and let me just say, I am quite happy and completely stress free now.
- We tried to put together our tax return by ourselves, but I ended up getting stressed and fearful that I would do something wrong.
- A lot of new things took place during last year.
- Jared and I were married and moved to Colorado in the middle of last year.
- We received W-2’s and 1099’s. W-2’s we know, but 1099’s are completely new to us.
- Colorado has a state income tax, something we’re completely new to.
- I started working from home after we were married, thus being subject to a self-employment tax, something completely new to us
- Health insurance was different between me and Jared last year.
- All in all, we just weren’t knowledgeable enough. Things got too confusing and because we wanted to make sure the return was done correctly and that we were getting the best return we could get, we enlisted the help of an accountant.
- We found a nearby accountant, and double checked the accountant’s credentials through this directory.
The accounting appointment:
- We brought in the necessary documentation.
- Last year’s tax returns.
- W-2’s & 1099’s.
- Home Office Expenses (internet payment receipts, ink payment receipts, office supplies receipts, computer expenses).
- Tuition Expenses (tuition fees, books).
- Giving Statements (ministry giving, tithing).
- Other Documentation, such as Health Insurance, Interest Payments, etc.
- Bank account and routing numbers.
- She put together our entire return in 1 hour and configured everything for us.
- She entered all of the documentation we brought.
- The giving statements and education expenses brought down our taxable income greatly. Without this, we would have owed A LOT, and wouldn’t have received the return we ended up with.
- The return we ended up with actually covered the self employment tax and the health care fine we owed (for Jared before we were married). Basically, these dues were subtracted from our overall return, and she configured all of these amounts for us.
- The final return also covers our state income tax due, but this was not taken out of our return like the self employment tax and health care fine. After our final return is deposited into our account, we’ll pay the state income tax. The deadline is April 18th.
- In addition to putting together our tax return, the accountant put together our estimated 2016 quarterly tax payments to make, which covers federal taxes and state income tax. No more worrying about what to do for that either!
- I’m self-employed and work from home, so nothing is withheld from my pay. This is why I have to start making quarterly payments this year. If you don’t make quarterly payments, you could end up with a fine a top of the taxes you owe for next year.
- The appointment cost us $250.00
- She was able to get us a refund, as well as extreme peace of mind.
- She also gave us a nifty folder with our return and other helpful information.
What I’ve learned:
- For those who work from home, receive a 1099, and live in a state which requires income tax, you will need to pay self-employment tax, income tax, and you will need to make quarterly estimated tax payments.
- These quarterly payments cover federal taxes, self-employment taxes, and income taxes.
- Our accountant put together these estimates for us to pay for this year, printed payment stubs for us with their applicable due dates, and gave us addressed envelopes.
- You may make payments online, or mail them in.
- Keeping good records works in your favor.
- For our appointment, I brought in very organized records which included receipts and payment confirmations.
- Because of our giving, home office and education expenses, we received a big deduction.
- Our accountant told us that in the future, we could bring in an itemized spreadsheet with all of our expenses. No need to bring in multiple statements, but be sure to keep records and receipts on file at home all the same.
- Our giving and education expenses helped us a lot.
- In our situation, we will need to continue using an accountant’s help.
- Our returns are more complicated than normal. In the end, the accountant is able to to expertly and accurately save us money through deductions and a good knowledge of tax laws.
- If you plan to use an accountant, add the cost into your budget so that you’re prepared for when the time comes. For us, we’re going to start setting aside $25.00 a month in preparation for next year’s tax return cost.
- Keep a spreadsheet to include all expenses that could be used on your tax return for deductions.
What I need to do:
- Send in our state income tax due after we receive our 2015 refund.
- Make estimated quarterly tax payments throughout 2016.
- Set aside $25.00 a month in preparation for next year’s tax return preparation cost.
- Keep an itemized spreadsheet to include all deductible expenses. Keep good records.
- Continue taking out 25% from every paycheck and setting it aside.
2015 taxes – done! I am so, so happy. And completely thankful for accountants.