Tax, Design, Beauty & Staying Cool Tips!
Best selling author and certified public account Richard Lindsey has offered some great tips for this week's blog! Here are his words for the wise!
Protect Yourself from the Stress of IRS Audits
This doesn’t have to be as hard as some people (or other tax professionals) make it to be.
First, retain a paper copy or receipt of any tax-relevant transaction. Scan these documents and archive them electronically or acquire them in an electronic format. If the purchase has a manual or warranty, store all the documents in the same electronic and physical location.
Sadly, the IRS has ruled bank or credit card records to be insufficient documentation. As a result, just keep your statements long enough to reconcile your account.
If the purchase was a business or tax-deductible expense, record the expense and why it justifies the deduction. Store this information with you on the receipts.
Second, keep brokerage statements indefinitely for taxable accounts. You are responsible for reporting the cost basis of any security you sell to calculate the capital gains tax. For a mutual fund with 30 years of reinvested dividends each dividend payment is part of the cost basis. As a result, cost basis can sometimes be computed only if you have the complete transaction history.
Without knowing the cost basis, the IRS could argue that the entire value of the investment be treated as gain.
If you have lost a record of how much you originally paid for an investment, instead of selling and paying 15% or more of the value in taxes, you can use that investment as part of your charitable giving. Gifting appreciated stock avoids the tax owed and still qualifies for a full deduction. Oddly enough, the IRS still asks for the original purchase date and price for gifted securities, but leaving these lines blank has no effect on your tax owed.
Many custodians keep several years of electronic copies of brokerage statements available. They are now required to send any known cost basis electronically when you transfer securities to a new custodian. If your current custodian has the correct cost basis of your securities, you probably no longer need to keep brokerage statements. However, an approach of “better safe than sorry” is always advisable with the IRS.
Third, keep IRA non-deductible contribution records forever. You may need those records every year that you withdraw money in retirement to show that a portion of the withdrawal is not tax deductible.
Or to avoid the hassle, clear out nondeductible IRA contributions by converting all of your IRA accounts to Roth accounts.
Fourth, keep partnership documents, contracts, commission or royalty structures forever. This includes property records, deeds and titles, especially those relating to intellectual property. It also includes any transfers of value for estate planning purposes.
Finally, save all of your tax returns. After you file, save the paper and or electronic copies with the rest of that year’s financial documents.
Tax returns and all the supporting documentation must be kept at least seven years. The IRS can audit your return for up to three years from your filing date. However, the three-year limit only applies to good-faith errors.
If the IRS suspects you underreported your gross income by 25% or more, they have up to six years to challenge your return. And because you may file for an extension at the October 15 deadline, you must keep your records for at least seven years.
Taxpayers collectively spent 6 billion hours, or 8,758 lifetimes, annually trying to comply with the tax code. Fortunately, you don’t have to be the one doing all the heavy lifting. We are on your side.
Lindsey & Waldo, call 251-633-4070 for an appointment!
Design with Diane!
As the mother of four I recall the beautiful artwork that my children brought home from school on a weekly basis. I wish I would have known about these acrylic frames when mine were little. Parents are able to change the art often! What a wonderful way to honor your child and make him or her feel special! Also, notice the book display railing! Isn't this a clever idea to display colorful children's books?
Diane Cashen has solutions for your interior challenges. She is by appointment only so give her a call at 545-5688 to book your time with her! Here is a link for similar frames that you can order if this idea resonates with you! Thanks for the tip, Diane!
Staying Cool in this Humidity!
I wanted to share this image after several folks I know experienced heat exhaustion. In fact, one of them ended up in the emergency room. Do you know the difference between heat exhaustion and a heat stroke? Our temperatures along the Gulf Coast are rising and those conditions can be difficult for many residents.
Here are some tips:
Stay hydrated especially if you are going to be outside. Always have fresh, cold water available while you are working out of doors.
Wear a hat, sunscreen and light weight clothing that breathes.
Avoid the hottest parts of the day and work in the shade when possible.
Check your meds, some make you more susceptible to heat illness.
Never leave anyone in a parked car.
Alcohol can affect your body's ability to regulate your temperature.
Be cautious, the very young and anyone over 65 may have challenges regulating their body temperature.
Acclimate yourself to the rising temperatures.
Beauty Break with Ashley Scarbrough!
If the aisles in local craft stores are any indicator, fall is just around the corner. Ladies know that the cooler temperatures tend to dry out our skin. Ashley has been a Mary Kay director for a decade. She has some fantastic products that will help you cope with the changing climate. Ask her about Clinical Solutions or a hydrating mask!
Do you have a special event coming up soon? She is available to do your makeup for special occasions. Just reach out and let her know your needs.
Have you booked a consultation with her yet? It is as simple as making a phone call or shooting her a text message. She has beautiful new fall options rolling out weekly.
Ashley Scarborough, 229-395-8487
Lil' Jack knows he looks dapper after his visit to see Rebecca at Apollo's Paws. He loves his monthly visits to her grooming spa. Did you know that she grooms cats, birds and reptiles too? Click here to read more about this amazing Gulf Coast business!
I hope everyone stays cool and comfortable this week. Remember to wear a hat, sunscreen, light clothes and drink your water! Also, make sure you pack some water for your fur-kids if you are taking them out for the day.
Have a great week! Go out and treat one another with kindness. The heat can make folks grumpy so keep that in mind while you are out and about. See you next week!
PS. I promised photos from the UMC church project by Acme Pressure Washing and will provide those next week so tune in!