Salvatore Candela’s 2018 Tax Preparation Checklist

tax preparation checklistYes, you *thought* 2017 was in the rearview mirror, didn’t you?

Well, not for the IRS it isn’t.

That’s because, as you probably know, we are now beginning the process of doing what we do best: effectively, legally, and ethically reporting our clients’ financial lives to the government for maximum savings — i.e., tax return preparation.

And while the government last week set the date for when they will actually begin accepting electronically-filed returns (Monday, January 29, 2018), that doesn’t mean that we can’t get started on pulling together what we need to have your return ready to file ASAP.

(In fact, it’s almost always a great idea to file your return as early as possible in the season … not just for peace of mind, but also because it prevents fraudsters from using your information to steal any refund that might be headed your way.)

So, to that end, I’ve put together my annual tax preparation checklist of what you’ll need to have for an effectively-prepared tax return. This is meant to be informational for you, and as something you can hold on to over the following weeks as you begin the process of excavating your financial files.

There may be certain situations where we’ll need other documentation to get you even more deductions. But, of course, we’ll let you know about that, should the situation arise.

And also, just to remind you, this is also the last tax return we’ll be filing for you under the “old” tax code. It will be interesting to have us compare what your taxes would look like under 2018 rules (at least on a very basic level), which we’d be glad to do for you, when you come in.

You see, I truly do pity those who attempt to wade through all of the different tax codes and forms on their own, and not devote a week’s labor to the transaction. It really doesn’t pay to “go it alone” for certain tasks.Salvatore Candela’s 2018 Tax Preparation Checklist
“In every single thing you do, you are choosing a direction. Your life is a product of choices.” – Dr. Kathleen Hall

With all of the changes every year (and, of course, that’s especially true THIS year), filing your taxes on your own is not for the faint of heart. That’s even with nice-looking softwares on the market which purport to make it easy for you.

But that’s what we’re here for. Let us be your easy button.

Below is a list of what you will need during the tax preparation process. Not all of them will apply to you — probably MOST will not. Nonetheless, it’s a useful checklist for all Queens taxpayers.

Before you get overwhelmed: yes, this is a long list — but it’s the unfortunate reality of our tax code that it’s not even comprehensive! But these items will cover 95% of our Queens clients.  Really, this is for ensuring that we’re able to help you keep every dollar you can keep under our tax code.

Even if for some strange reason you won’t be using our cost-effective services this year, feel free to use this list as a handy guide…

Personal Data
Social Security Numbers (including spouse and children)
Child care provider tax I.D. or Social Security Number

Employment & Income Data
W-2 forms for this year
Tax refunds and unemployment compensation: Form 1099-G
Miscellaneous income including rent: Form 1099-MISC
Partnership and trust income
Pensions and annuities
Alimony received
Jury duty pay
Gambling and lottery winnings
Prizes and awards
Scholarships and fellowships
State and local income tax refunds
Unemployment compensation

Health Insurance Information: NOTE — despite the passage of tax reform that changes this information for 2018 taxes, we still need it for 2017 taxes.
* All 1095-A Forms from marketplace providers (if you purchased insurance through a Marketplace)
* Existing plan information (policy numbers, etc.)
* If claiming an exemption, your unique Exemption Certificate Number
* Records of credits and/or advance payments received from the Premium Tax Credit (if claiming)

Homeowner/Renter Data
Residential address(es) for this year
Mortgage interest: Form 1098
Sale of your home or other real estate: Form 1099-S
Second mortgage interest paid
Real estate taxes paid
Rent paid during tax year
Moving expenses

Financial Assets
Interest income statements: Form 1099-INT & 1099-OID
Dividend income statements: Form 1099-DIV
Proceeds from broker transactions: Form 1099-B
Retirement plan distribution: Form 1099-R
Capital gains or losses

Financial Liabilities
Auto loans and leases (account numbers and car value) if vehicle used for business
Student loan interest paid
Early withdrawal penalties on CDs and other fixed time deposits

Personal property tax information
Department of Motor Vehicles fees

Gifts to charity (receipts for any single donations of $250 or more)
Unreimbursed expenses related to volunteer work
Unreimbursed expenses related to your job (travel expenses, entertainment, uniforms, union dues, subscriptions)
Investment expenses
Job-hunting expenses
Education expenses (tuition and fees)
Child care expenses
Medical Savings Accounts
Adoption expenses
Alimony paid
Tax return preparation expenses and fees

Self-Employment Data
Estimated tax vouchers for the current year
Self-employment tax
Self-employment SEP plans
Self-employed health insurance
K-1s on all partnerships
Receipts or documentation for business-related expenses
Farm income

Deduction Documents
State and local income taxes
IRA, Keogh and other retirement plan contributions
Medical expenses
Casualty or theft losses
Other miscellaneous deductions

We’re here to help. Let me know if you have any questions.


Salvatore Candela
(718) 894-5954

The TaxAdvocate Group

4 Goals To Jumpstart Your Financial Freedom In Queens In 2018

financial freedomIt feels VERY good to turn the page on 2017, doesn’t it?

There were so many hard things that we faced as a nation that the opportunity to start fresh feels particularly bright this week.

Obviously, and as I’ve already written about in some detail, we have a brand new tax regime under which we are NOW operating. The year-end tasks are no longer available to us (aside from some IRA moves you can still make), so with your permission, my team and I are taking a breath from excavating those details and are focusing like a laser beam on getting your 2017 taxes prepared and filed with maximum savings, integrity, and care.

We are in your corner.

I’ll be in touch soon with some things that YOU can do to prepare, even as WE prepare; but in the meantime, let’s talk about 2018 and your goals, shall we?

4 Goals To Jumpstart Your Financial Freedom In Queens In 2018
“Those who do not remember the past are condemned to repeat it.” -George Santayana

There is a big problem with many peoples’ financial resolutions: They don’t usually last even until the end of January.

But the ones I’m about to recommend to you here can, because they’re incremental AND anyone in Queens can do them.

Making a permanent change in our behavior requires both time and a steely resolve. But if we attack these things on a step-by step basis, I’ve found that we can develop financial character one action at a time.

So in that vein, here are some things you can do, in a sequential order, that will make a huge difference in your financial year. If you’ve already got one down, check it off, and move to the next on the list.

Financial Freedom Goal #1
EVERYONE START HERE: Resolve to become (and stay) debt free.
Now, clearly I’m not Dave Ramsey, but there’s a reason why he’s become so popular: his approach works.

So, as a start, I’d say that you can have a fixed-rate, fixed-year traditional mortgage on your Queens house — but shoot for nothing else. No HELOC. No car payments. Certainly no credit card debt. Because you simply have to learn to live within your means — which, unfortunately, sometimes means going without. The millionaires among us in Queens really are frugal.

You can learn to enjoy the process of chipping away at your debt, and it’s truly the best and first place to start.

Financial Freedom Goal #2
Automate your savings (i.e., Pay Yourself First).
Does your company offer a 401(k)? Get the entire match. Usually this translates to saving 5% of your salary while the company contributes a 4% match, which is the fastest way to get an 80% return on your money. Most Americans forgo this match, believing they need to spend 100% of their salary. But you can learn to think like a millionaire and live well on 95% of what you make.

If you don’t have a 401(k) plan, act like you do, and sock away 5% automatically. Or talk to your employer about different company savings vehicles.

Financial Freedom Goal #3
Fully fund your 2018 Roth IRA.
This is $5,500 in 2018 and $6,500 if you are older than age 50. And if you can’t manage the entire amount in January, it equates to a $460 monthly savings. Automating these savings plans are relatively painless — it’s the living without after the fact which seems difficult … until it isn’t.

Set your savings on autopilot, and pat yourself on the back.

Remember — these steps build off one another, so if you already have done the first 3, here’s your next step:

Financial Freedom Goal #4
Save another 5% in a taxable investment account.
Automating savings is great, automating investment is even greater. Key word here: automate. At this point, you’re hitting a mark of saving 15-20% of your income. That’s a fast-track to long-term prosperity.

In terms of WHAT you invest in, there are many great options. Index funds are a great place to start, but every person’s situation in Queens is slightly different .

And so, yes: These are the basic, first steps. I’ll have more sophisticated advice moving forward.

But get these going this month, and start your financial 2018 on the right track.

Happy New Year!

Salvatore Candela
(718) 894-5954

The TaxAdvocate Group

4 Key Year-End Tax Strategies With Tax Reform In Mind For Queens Taxpayers

tax strategiesWe’re in that annual holiday lull during which most of the country takes things real easy, tries to recover from all of the parties, and gears up for a new beginning.

For tax professionals, however … well, let’s just say that we don’t often get a “normal” holiday season, and this year is even more intense as we process all of the changes coming down the pike for next year. There was hope by many that this tax reform bill would simplify things for many taxpayers in Queens, but I am sorry to say that is not actually the case.

(I do want to warn you in advance that this note has a lot of information, and a lot of tax-savings strategies in it. It is a bit long. But time is short before the end of 2017, and some of these strategies can save you a bunch of money if you are able to act quickly.)

Back to the tax reform bill … I saw an article the other day in a publication for tax accountants, and they referred to the recently-passed bill as “The Accountants’ Full Employment Act”.

Yes, there’s a lot of talk about how taxes have gone down for about 80% of the population, and we here at The TaxAdvocate Group are obviously pleased about that on behalf of our Queens clients.

But “simplified” tax preparation is not something that was accomplished by this bill, especially for business owners — but really, for a majority of Queens taxpayers. Yes, the standard deduction is much higher, and that will make sense for some of our clients to take.

However, as I’ve alluded to previously, there will be an entirely different kind of decision matrix for financial decisions. Some will be simpler, others will be more complex, but regardless, we’re on the case for you.

The IRS has yet to issue actual guidance for tax professionals on these changes, and there will be many “technical corrections” still to come (the bill was passed rather quickly), but again, we DO know some things that will save you some money if you take some action during this normally-slower week.

I’ve put together some big ideas that will help. The last one, in particular, is one that might merit your attention. All of these are, of course, a personal decision — and we’re here for you regardless.

Shoot me an email by using the link at the top of the page or call us ((718) 894-5954) if you need help.

4 Key Year-End Tax Strategies With Tax Reform In Mind For Queens Taxpayers
“Life is the art of drawing without an eraser.” -John W. Gardner

Year-end can be a snoozer for some Queens taxpayers, and I don’t always “push” very hard on certain things with my clients.

But with a radically different — but sadly, not simplified — tax code for 2018, it would behoove you to sit down and make a little bit more of an effort ahead of this particular year’s end than perhaps you have in previous years — so that you can potentially save even more.

None of these tax strategies require a lot of time or effort, but they are different than in years past.

Here we go:

1) Consider donating more aggressively to charity. 
The ability to deduct for charitable contributions isn’t going away. But for some taxpayers who end up taking the increased standard deduction (which nearly doubles, from $6,350 in 2017 to $12,000 in 2018 for singles and $12,700 in 2017 to $24,000 for couples in 2018), giving to charity NOW will provide a much bigger bang for your buck.

And further (and speaking of bang for your buck), because of the new, lower rates across most tax brackets, your contributions in 2017 are “worth more” in tax deduction power than they will be in future years. If your tax bracket falls from 28 percent to 24 percent, for example, the value of a $100 charitable deduction drops from $28 to $24.

One more idea on this topic: This is a great year (2017) to give away appreciated stock or securities.
This has two benefits: a deduction for the fair market value of the security versus getting a deduction for the lower cost basis in 2018 of up to 30 percent of adjusted gross income (or 20 percent if contributed to a private foundation); plus the capital gain on the appreciated security is not taxed.

2) Consider making an additional mortgage payment. 
Again, this is especially true if we think we might not itemize your deductions for your 2018 tax return. You might not get the benefit from deducting that interest payment, and so, if you’re able to, this will help your 2017 tax bill and not do anything to help you in 2018 taxes if you take the standard deduction.

Plus, there is a larger interest deduction in 2017 even if we *do* plan to itemize under the new bill.

One potential pitfall: check with your lender to make sure this payment goes to interest as well as principal. Sometimes, additional payments go straight to paying down the principal — which is a great practice for saving long term on your mortgage, but which doesn’t help you with your taxes.

3) Defer income until 2018 begins. 
I’ve written previously about this, so I’ll keep it short: Employees often cannot control the timing of their paycheck, but it never hurts to ask. Lower marginal rates across the board for 2018 means that where it’s possible to shift income into 2018, do so.

4) Consider pre-paying or making a deposit towards OUR fees. Anything that you invest with us for handling all of your tax preparation needs, unfortunately, is no longer tax deductible in 2018. But you can pre-pay now and still receive that value for 2017 taxes. Even if the actual fees for your return end up being different than what you actually pay, anything you pay in 2017 will be deductible on this year’s taxes (even if you are paying for services you don’t receive until 2018 or beyond).

So you get a real-life discount (in terms of tax deduction opportunities) if you choose to invest in our services before year-end. Send me an email through the link at the top of the page, if you are interested in this, and we will follow-up with you as needed. And if for some reason your fees end up being less than what you pay, we’d be glad to refund you the overage or hold it as a credit for future services (and in the case of maintaining the credit with us, you will keep the deduction!).

I hope this helps. Again, this is a bit of a longer note, especially for the “last-minute tax tips” subject. And there are potentially other, less common moves that might make sense for certain of our Queens clients.

Now you understand why our holidays are a little busier than for some other professionals!

We’re in your corner,

Salvatore Candela
(718) 894-5954

The TaxAdvocate Group  

2018 Tax Reform Update And A Holiday Prayer from Salvatore

holiday prayerWell, we seem to have a final tax plan in place, and if everything goes according to what Capitol Hill watchers say, it should pass both the House and Senate this week, and be signed into law by President Trump.

And my, oh my, are there changes.

One that I should point out to you, since I mentioned it last week: Congress put in a change that now means you can NOT prepay your 2018 state income tax to pick up a deduction in 2017 after all. That said, you can pay everything now that you will pay with your 2017 filing (because the last thing you want is to have to pay in 2018 for state taxes in 2017).

Starting in 2018, you can still deduct up to $10K of state and local taxes and property taxes. In high tax states, this is going to hit you hard, because you’ll be losing some of those deductions.

However, there are plenty more deductions to be had under this new regime that *should* offset some of these losses … if you know what you’re doing.

So I’ll be taking the time over future weeks and months to dive into all of these changes on YOUR behalf. Rest assured — we pay attention to these things so you don’t have to. I know that tax software makers and a certain breed of complacent tax professionals are scrambling to catch up, but we’ve been watching these things closely, and our clients in Queens will benefit greatly from that attention.

Because, well, the tax code is still complicated. In fact, it’s even more complicated for many brackets and categories. After all, the breakneck speed with which Congress pursued tax reform may well result in certain political victories, but it has also left behind lots of goodies for people in Queens who have a smart tax professional in their corner.

Which, ironically, is the one thing true tax reform is meant to “fix”. But in 2018, there will be opportunities all over the place for good planning.

One quick, easy tipalmost everyone, if possible, should delay income for these next few weeks into 2018 if at all possible. Employees often cannot control the timing of their paycheck, but it never hurts to ask. Lower marginal rates across the board for 2018 means that where it’s possible to shift income into 2018, do so.

Again, much more to come on these topics.

I’ll leave you today with my annual holiday prayer. I love this one, and share it every year because it’s more and more pertinent. As we shout past each other online, and it bleeds into our interactions in person (“IRL”, as the kids say) we should remember that there are real stories behind every person.

May we see each other with clear eyes.

2018 Tax Reform Update And A Holiday Prayer from Salvatore
“People travel to wonder at the height of the mountains, at the huge waves of the seas, at the long course of the rivers, at the vast compass of the ocean, at the circular motion of the stars, and yet they pass by themselves without wondering.” -St. Augustine

“God, help us remember that the jerk who cut us off in traffic last night is a single mother who worked nine hours that day and is rushing home to cook dinner, help with homework, do the laundry and spend a few precious moments with her children.

“Help us to remember that the pierced, tattooed, disinterested young man who can’t make change correctly is a worried 19-year-old college student, balancing his apprehension over final exams with his fear of not getting his student loans for next semester.

“Remind us, Lord, that the scary-looking bum, begging for money in the same spot every day (who really ought to get a job!) is a slave to addictions that we can only imagine in our worst nightmares …

“Help us to remember that the old couple walking annoyingly slowly through the store aisles and blocking our shopping progress are savoring this moment, knowing that, based on the biopsy report she got back last week, this will be the last year that they go shopping together.

“Father, remind us each day that, of all the gifts you give us, the greatest gift is love. It is not enough to share that love with those we hold dear. Open our hearts not to just those who are close to us, but to all humanity. Let us be slow to judge and quick to forgive, show patience, empathy and love. ”


May your season be truly bright.

Salvatore Candela
(718) 894-5954

The TaxAdvocate Group

Conventional Financial Advice May Not Always Be Best by Salvatore Candela

financial adviceJust to give you a little snapshot of why it’s taking so long to get tax reform done (and I know — you’re surely waiting with bated breath), consider this: under certain circumstances with the proposed reform, some people would face a marginal tax rate of over 100%.

The WSJ did the analysis over the weekend, and it is correct by my reckoning.

Which, of course, is exactly the sort of thing I was referring to last week when I said that the prospect of diving into the new laws and finding savings is “appetizing” for someone like me. Because even if the law passes as currently formulated (and remember, nothing is yet passed), there are ways that those same people who might face 100+% tax rates could pay much LESS tax.

But only if they have a pro in their corner.

For instance, I’ll offer you this piece of advice: It looks pretty certain that you’re not going to be able to deduct your state and local income taxes in 2018. Both the House and Senate bills kill this deduction.

This means that if you can find a way to pay (or even overpay) your state and local income taxes NOW, before the end of 2017, you will be able to deduct them from this year’s taxes. But you almost certainly won’t be able to deduct them next year (even for tax payments that are “assigned” to previous years).

That’s just one example of not letting these things just “happen” to you.

Too many people in Queens opt for the status quo ante approach, which, when it comes to taxes, can often mean trusting a piece of software to spit out the right numbers and somehow magically find all the right deductions for their specific life in the real world. A piece of software won’t be able to tell you things like I just told you, and at the right time.

Or it can mean purchasing something that you “just have to have”, because that’s what you’ve always done or because that’s what you see “everyone” around you in Queens doing.

If 2017 has taught us anything, it should be that this is not the age in which conventional wisdom is always right.

So, here are some other pieces of conventional financial wisdom that may NOT be right for you.

Conventional Financial Advice May Not Always Be Best by Salvatore Candela
“A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.” -Robert Frost

You can find lots of advice in Queens on handling your finances, but not all of it is valid for everyone. That’s why it’s always helpful to have someone who can speak into your specific situation. Because we shouldn’t just assume that the following “rules” are always true…

1) Always invest for the highest return. 
High returns frequently involve higher risks, as well as bigger fees. You may be better off seeking safer, more conservative investments, even if they don’t produce as much in the short run.

2) Homes are always good investments. 
You may think that renting is just throwing dollars down the drain, but remember that homes can be an expensive proposition, with high transaction costs, and constant maintenance expenses. You may save more money by renting until you can better afford a house of your own.

3) Avoid debt at all costs. 
Generally speaking, Dave Ramsey is usually right when it comes to financial principles. And you should certainly avoid overextending yourself. However, some debt can be useful when buying a house (when that’s appropriate — see above), or in certain business situations. Just be sure you can comfortably manage it, and pay it off on time, and with as little cost as possible.

4) Sell when your stock is high. 
What goes up must come down, right? But you want high-performing stocks in your portfolio at all times, so resist the urge to cash out just because a stock has reached an all-time high. Otherwise, in time, you could end up with a bundle of low-performing investments.

5) You can do everything yourself. 
You can trade your own stocks if you want, but you’ll often do better working with a good financial planner from Queens. And you can prepare your own taxes, but, well, as I think you probably understand, it’s better to work with someone who knows the system like the back of their hand.

We pay attention to this stuff so you don’t have to. And we’re in your corner.


Salvatore Candela
(718) 894-5954

The TaxAdvocate Group

« Previous Entries Next Entries »