Preparing for Your Tax Appointment

Getting organized saves valuable time

Tax time always seems to come around sooner each year, and if you’re like most people, you make a vow to be better prepared for next year. Well next year is here and it’s time to gather together all those tax records you’ve been saving. You can help us by sorting through your papers and separating them between income and expenses.

Make sure you have all your W-2s if you held more than one job during the year. Employers are required to issue a W-2 to all employees by January 31. If you are self-employed, make sure you have received all your 1099-MISC forms from each person for whom you provided services and were paid $600 or more. If you were paid less than $600 from one or more persons, the income is still taxable even though there is nothing issued to you reporting it.

If your tax situation has not changed significantly from last year, you can use your 2016 income tax return as a guide for organizing your information. You may also request a personalized tax organizer from our office, which can guide you in gathering your information, reminding you  of which statements to bring or to submit to our office. 

If you have added a family member this past year, be sure to have that person’s social security number on hand. A social security number, or some other taxpayer identification number, is required for all persons for whom you claim a personal exemption.

Teamwork Makes the Dream Work!

In order to keep your best interests in mind, for the last few years, Taxlink has been accepting very few new clients. The only new clients we do accept are those that are referred, and even then, sometimes we cannot accommodate referrals. I have reduced my time to meet with clients so that I can devote the optimal attention to my client’s specific tax needs. I have also hired more support staff to assist me with this. Although I would love to meet with each and every one of you, most of my clients either upload, drop off or mail-in their tax information.  Some of you may wonder what exactly happens after that!


After we log in your information, our team of tax analyst folks get busy. This team consist of a CPA, an EA and a bookkeeper, who enter the information you provide into our tax program. They often work together in tandem to make sure everything is in the right place. 

Then, the return comes to me. I review EVERY SINGLE RETURN, and determine what additional information we need, or if any additional tax saving options are available. I prepare a list of initial questions and then…

You receive that phone call from Sharon! (This is Sharon’s 11th year at Taxlink and I am so lucky to have her!) Sharon is a certified tax return preparer and completes IRS mandated continuing education credits each year. After Sharon goes through the initial questions, the return comes back to me.

I then evaluate whether or not we need any further information to complete the return. Sometimes we are missing information and need to wait, so there may be more correspondence from either Sharon or (usually in the case of bad news) myself. But if everything is there, I give my blessing and the return is printed and ready to be e-filed.

Over the last few years, I have found that this teamwork approach was basically resolving the amount of errors that can occur. You have the privilege of two or more eyes looking at the return which not only helps with reducing errors, but also ensures time is being taken to think about every single tax saving option available to you. This makes me very happy, and I hope it makes you happy too!

PS. For more information on uploading your documents to our secure Intuit Link, please contact my staff at 773.549.5100

Some Last Minute 2017 Tax Tips...

The clock is ticking down to the start of the new year, and there are some very last minute things you can do to save some additional tax dollars for 2017.

There was final guidance from the IRS regarding prepaying property taxes for a 2017 deduction. In a nutshell, only tax that has been assessed for payment in 2018 can be prepaid. For instance, I live in Cook County, Illinois, and my property taxes that are due March 1st, 2018, were assessed in 2017. The bill is available and I have paid the first installment online. But according to guidelines provided by the IRS, anything beyond what is assessed would not be deductible.

A couple of important points about this.

·         There must be a bill available. Meaning, you must know what the tax is going to be, to the penny, and pay that amount in full. It cannot be a guess at how much it will be, or based on the previous year – the assessment must exist.

·         Just because your county allows you to prepay your property tax bill, does not mean that the tax has been assessed.

·         If you aren’t sure if the tax has been assessed, and it is available for online prepayment, think of this. If you expect that your property tax and state income tax will exceed $10,000 in 2018, even if you prepay, then there’s no harm in making that payment, because anything over the $10,000 in 2018 will not be deductible anyway.

Of course, as mentioned before, there’s the issue of AMT, which basically negates any benefit of prepayment.

There is likely still time to make that prepayment if you choose to do so. I know my county allows prepayments online up until tomorrow that will count as a 2017 payment.

How to maximize your unreimbursed job expenses (for employees, not self-employed). A good number of my clients are not reimbursed for their job expenses by their employers. Starting in 2018, unreimbursed job expenses that have historically been reported on Form 2106 and deducted on Schedule A as an itemized deduction, have been eliminated.

This is quite devastating for my flight crew, performing artist and sales clients, some of whom have major out of pocket expenses that are necessary for them to conduct business and/or do their jobs. Some of these expenses include:

·         Travel expenses, including per diem

·         Auto/mileage expenses

·         Home office

·         Office supplies/equipment

·         Liability insurance

·         Union dues and other professional fees and memberships

And the list goes on. For 2017, if there is anything you can think of to purchase or pay for before December 31st, 2017, DO IT! This is, again, important for those who normally have unreimbursed job expenses that they deduct on Schedule A of their tax returns, and does not include those who are Schedule C independent contractors.

What’s up with independent contractors, you ask. Well, these are folks (and quite a large portion of my clientele) who are not paid as employees. There are advantages and disadvantages to being an independent contractor (who can also be LLCs or S-Corp). Some of you have already contacted me about whether it is a good time to change from being an employee to being an independent contractor. Here are a couple of thoughts I have:

·         You may not have that choice. There are rules dictating whether your company can treat you as an independent contractor or an employee, and sometimes they don’t have a choice in the matter. If you are serious about pursuing the independent contractor route (or becoming an LLC or S-Corp), you must first ask your employer if it is possible to begin with.

·         If they say no, then it may be time to have a discussion about your expenses. If, in order to conduct your business, you must spend money out of pocket, the discussion should be about how the company needs to take a more active role in reimbursing you properly.

·         If they say yes, then we will need to discuss what it means to be an independent contractor/LLC/S-Corp. We may not be able to have this discussion until after tax season. But, you can certainly start the year as an independent contractor, and we can discuss afterwards if an LLC or S-Corp makes sense, and then set it up retroactively to January 1st, 2018. I will be setting up appointments right after tax season to facilitate any changes such as this.

That’s all for now. Please be on the lookout for more posts in the coming weeks, up until January 15th when Taxlink officially starts tax season. Have a safe and Happy New Year’s eve, and we will talk to you next year!

The Tax Cut and Jobs Act of 2017 - How It Affects You

The Tax Cut and Jobs Act of 2017


Wow! It’s been an interesting year, and with no intentions of ending on a boring note! As of this writing, it is being reported that the House and Senate have come to an agreement on the final tax, and the bill is expected to be approved and signed into law before year-end. This will be the most significant tax reform since 1986, before I even started my career, and impacts taxpayers at every level.

The promise of a simplified tax code has resulted in quite the opposite happening, at least in my practice. With that in mind, I will be focusing on things you can do for the 2017 tax year before the year ends, and then moving on to what to plan for in 2018 and forward.

Summary of Changes Affecting My Clients

There are thousands of news sites out there that explain the tax changes that are expected to be law next week. These changes will not be retroactive to 2017, but will impact future tax planning. A few that I feel are pertinent to my clients are:

·         The tax bracket changes. Originally, there were to be four, down from seven. But the new bill preserved the seven brackets, and reduced the percentage of tax and earned income spread. How this will affect you is a big TBD, as it is any year, really. However, mostly my higher-income earner clients will see the most bang for their tax bucks.

·         Elimination of certain itemized deductions. Only medical expenses (once exceeding over 7.5% of income), state income and property taxes (with a limit of $10,000 combined deductible), mortgage interest (limited to loans less than $750,000) and charitable deductions have survived.  Unreimbursed business expenses (not to be confused with those who deduct self-employment business expenses) have been eliminated as deductions. This specifically impacts my flight crew and other clients with significant unreimbursed business expenses in a BIG (and BAD) way. Also, included in this eliminated deduction are fees paid to me and your fee-based investment advisor.

·         Elimination of the personal exemption. Currently, most of us can further reduce our income by personal exemptions. Depending on your income bracket, every person listed on your return reduces your income by $4,050. A family of four reduces their income by $16,200. This extra deduction is eliminated after 2017.

·         Lower tax burden on pass-through businesses. Many of my clients are self-employed, either as sole proprietorships, LLCs or S-Corps. While the words “lower tax burden” are appealing, the reality is that most small business will not qualify for the special tax treatment. If you are in a personal service industry, such as an attorney, engineer, doctor, accountant, consultant or “other personal service provider”, the special tax treatment will not apply to you. We will be waiting to see the final list of excluded service industries, but in the meantime, for most of you, it will be business as usual. In addition, the IRS will be implementing measures that prevent abusive practices for those attempting to qualify for the special tax treatments. READ: UPTICK IN AUDITS.

·         Elimination of alimony as a deduction, and as income. The new bill will remove the deduction for alimony paid by the payor, and the amount as income by the payee.

·         Elimination of moving expenses. There will no longer be a deduction for these expenses.

·         Alternative Minimum Tax. A very complicated and annoying tax was slated to be eliminated. But sadly, it will remain. This tax, known as AMT, reduces your deductions so that you pay a minimum amount of income tax on your income. It normally effects taxpayers with moderate to high income with a disproportionate amount of itemized deductions, as well as other factors.

·         Education incentives preserved. This includes the tax credits for education.

·         Capital gains exclusion on primary residence preserved. Live in your home for two of five years, make less than $250,000 single/$500,000  married filing joint, and you can exclude those capital gains from your income.

2017 Tax Savers

So, what can we do in 2017 that will save us some tax dollars? Here are some ideas:

·         Defer income. If you are expecting a large bonus or commission check, try to have it paid out in 2018. With the new tax rates, you may save a few dollars.

·         Max out your 401k/403b contributions through your employer before year-end (year-end timing not applicable to self-employed)

·         Offset capital gains with any losses you (or your investment advisor) can find.

·         Moving for your job? Before year-end would be the time to do it. If you are moving over 50 miles away to start work for a new employer, try to make that happen before the year ends so you can deduct specific moving expenses in 2017.


·         Prepayment of your Q4 estimated state taxes. If you are set up for estimated payments, and you itemize, pay them before December 31st.

·         Same goes for your real estate taxes. If you can prepay your first installment before the year-end, you will be able to deduct them this year when they may make a difference in your tax. ***UPDATE AS OF WEDNESDAY, DECEMBER 27, 2017*** 

·         Unreimbursed business expenses. If you are needing that computer for work, and your employer isn’t reimbursing you, do it this year instead of waiting for next. Again, this is helpful if you itemize your deductions and can deduct your unreimbursed business expenses (subject to a 2% floor of your income).

·         Prepay your mortgage interest for January in December.

·         As always, charitable giving always helps.

LET’S TALK ALTERNATIVE MINIMUM TAX (AMT) FOR A MINUTE. The prepayment of your state and real estate taxes may seem like a great tax saving strategy for 2017, but remember, one of the big triggers of AMT is this very deduction. A good way to figure out if this is for you is to look at your 2016 tax return. Is your income for 2017 similar to 2016, or higher (line 37)? Did you itemize (line 40)? Did you pay AMT (line 45)? If you can answer yes to any of these questions, the deduction for your state and real estate taxes may be limited. Therefore, prepaying these taxes may be irrelevant.

Planning for 2018 and Beyond

As you know, tax season is always chaotic for us at Taxlink. It’s the nature of the business, and we are familiar with the pressure and working in the shadow of the deadline. This year will be no different. Our first priority is to get your 2017 tax return filed by that deadline. We asked that you provide us with your tax documents as soon as possible. DO NOT DELAY!

My goal is to provide you with a written summary of tax guidance for the coming year along with your completed 2017 tax return. I ask that we hold off any specific tax planning until after tax season, where I can open up my schedule and meet with you personally to discuss how these changes will affect you.

Reasons to Stick With a Tax Pro

Having a tax pro saves you time and money

Like it or not, tax season comes around each and every year. And with it comes annual changes to the tax law, making it more and more complicated. Therefore, it’s important to rely on a tax professional to guide you through filing your taxes. This not only saves you time, but also money.

I welcome the opportunity to serve you year after year. Below, I’ve detailed some of the reasons why it’s important to stick with a tax professional rather than self-preparing your return.

You Save Money

Tax professionals are educated on the various deductions that you can take on your return. Spotting even the tiniest deduction can save you big money on your return and get you the largest refund possible.

You Save Time

It goes without saying—time is money. Some returns can take countless hours to calculate. Save yourself the hassle of preparing your own return by turning to an expert.

The Tax Code is Tricky

The tax law is in a state of flux. With more changes on the horizon, it’s important to rely on the services of a tax professional whose job it is to stay current and informed on all the changes.

Mistakes Can Be Costly

Ensuring that your return has the proper deductions and is calculated accurately is your tax professional’s job. Incorrect reporting of deductions or income can create substantial financial and legal implications. Avoid your chances of audit by using a tax professional.

I Can Help You Make Tax-Saving Decisions

By turning to the services of a tax professional, you’re able to receive tax-saving advice through­out the year. I’m here to work with you through tax season and beyond.

Protection From Audits

If you receive a letter from the IRS or find out that you’re being audited, you can always turn to your tax professional for expert advice on how to resolve the issue. This keeps you secure and properly represented.

As always, I’m here to help, and look forward to serving you.