Frequently Asked Questions on Accounting, Taxes, IRS Audits & Bookkeeping

The Act is the most significant tax cut since 1981, at a 10-year budget cost of $1.35 trillion. The entire act sunsets (reverts back to former law) in year 2011. The act focuses on individuals, not businesses. The key benefits include: Individual rate reduction, Marriage penalty relief, Expanded credits, Expanded retirement benefits, Repeal of estate taxes.

Our Denver accountants at Bloch, Rothman and Associates, Ltd. recommend keeping your tax records for four years after the return due date. However, documents in support of the purchase of a depreciable asset should be kept until the asset is disposed of and documents in support of loans and mortgages should be kept until the loan or mortgage is liquidated.

It depends. For example, if both parties' income is approximately the same, but one has extraordinarily large itemized deductions subject to income limitations (medical expenses, casualty losses, miscellaneous deductions, etc.) it is possible to save taxes by filing separately. The Denver accountants at Bloch, Rothman and Associates, Ltd. always compute the tax result both ways, as jointly and married filing separately, to ascertain which filing status is more beneficial to our client.

You can call the IRS at its toll-free line at 800-829-1040. To be ready to respond, you should have your Social Security number, your filing status and your refund or payment due amounts. Allow between 4 to 6 weeks before you contact the IRS.

Of course, the Denver accountants at Bloch, Rothman and Associates, Ltd. will supply you with a copy and if you lose it, we will furnish you with another copy. If we did not prepare the return, and for some reason you do not have a copy in your possession, you will need to file form 4506, Request for Copy or Transcript of Tax Forms, with the IRS service center where you filed your missing return.

We at Bloch, Rothman and Associates, Ltd. will provide a data collection form for your convenience that is a check list containing most of the items which you will need. However, a detailed record of your income and expense items will be required to support our entries and in addition, a record of any other items reported on your tax return. Since totals of each category of income and expense will help us save time and cost, it is the preferred method of information submission. Our Denver accountants will also need your last year returns.

No. Child support payments are not deductible, because they represent a pre-existing legal obligation to support your children.

The parent who had custody of the child for the greater part of the year is generally treated as the parent who provided over one-half of the child's support and will claim the exemption if other tests are met. The divorce, separate maintenance or custody decree or agreement usually determines custody. If no decree or agreement establishes custody, then the parent who had physical custody for the greater part of the year is entitled to the exemption.

The educational savings area is very complicated. We at Bloch, Rothman & Associates, Ltd. recommend that taxpayers seek professional assistance. Although a Section 529 plan, under the 2001 Tax Act, is an extremely flexible and tax effective plan, there are other plans to be considered. Also when considering any educational savings plan, consideration should be given to the impact on financial aid qualification requirements.

Colleges calculate student financial aid awards by calculating the college's cost of attendance (COA) and then subtracting the expected family contribution (EFC). Any remaining amount may be funded with financial aid. Other considerations are how early the financial aid application is filed and the particular school's available financial aid resources.

The accountants at Bloch, Rothman & Associates, Ltd. generally discourage borrowing for consumer purchases unless absolutely necessary. However, we recognize that often there is no alternative. When it is necessary to borrow for large consumer purchases, we recommend a home equity loan. Interest on home equity loans is tax deductible, while interest on consumer loans, such as car loans and credit cards, is not tax deductible.

Our Denver accountants will always provide a fee estimate. We provide a fee range for the preparation of tax returns. Where appropriate, we also provide written fee estimates to business clients.

We accept any clients within our service range. There is no account too small to be considered important in our office. If the engagement is very large, our accountants will accept it if we feel we have the staff to handle it. If we don't have the appropriate staff, we may form an alliance with another accounting firm and perform a joint engagement.

Yes. Due to available technology, distance is no longer a problem. We service clients in all states. For example, our tax preparation software includes every state, and the internet allows us to service clients more effectively from distant locations. When necessary, we travel to distant clients.

Yes. We handle all types of tax-free exchanges, such as Four Party, Delayed, Reverse Starker, Diversified, Built to Suit, Rehab to Suit and Consolidated. We also handle exchanges involving operating businesses, LLCs, Partnerships and Alternative Methods of tax advantaged disposition of property such as Charitable Remainder Trusts.

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