JK Harris and Company, Creating Lifetime Clients

Ralph Havens, Director of Professional Services

By now, you should have received your W-2, the Wage and Tax Statement that is crucial to filing most income tax returns.  Did you know that your employer is required to send out your W-2 by January 31 each year? (Although it may take up to two weeks for you to receive it in the mail.)

If you have not received your W-2, try contacting your employer to determine why.  It is possible it might have been returned to your employer in the mail if the address was incorrect or incomplete.  It is very important to let your employer know when your address changes so that you still receive your W-2 in a timely manner.

After contacting your employer, you will need to allow a reasonable amount of time for the W-2 to reach you.  If, however, you have not received a W-2 by February 15th, you may call the IRS for assistance at 1-800-829-1040.  Be advised, they do ask that you have the following information ready:
- Your employer’s name, address, city, state, and zip code
-Your name, address, city, state and zip code with your Social Security number
-An estimate of the wages you earned, federal income withheld and the period you worked for the employer (the final pay stub of the year or with that employer will give you this information)

Not having a W-2 in hand is not an acceptable reason to file your taxes late.  You can file a Form 4852, Substitute for Form W-2 with your tax return.  It may delay your refund slightly, but it is better than being penalized by the IRS!

Ralph Havens was named the Director of Professional Services in June 2007 and has been with JK Harris since 2003.  He heads up JK Harris’ Audit, Tax Preparation and E-File departments.  Ralph has been an Enrolled Agent for 14 years and his special area of concentration is in audit representation.

Peter Hukki – Enrolled Agent

Congress has passed the Economic Stimulus Package, which means checks will begin going out to qualifying taxpayers beginning in May.

So exactly what do you, as a taxpayer, need to do to receive this rebate check? Well, if you qualify for the rebate, all you have to do is file your 2007 tax return, and the IRS will take care of the rest. And what’s even better is, if you had your tax refund direct deposited into your bank account, your rebate check will also be direct deposited.

In most instances, the rebate will equal the amount of the tax liability on your tax returns, with a maximum amount of $600 for individuals and $1,200 for taxpayers who file a joint return. Those taxpayers with qualifying children will receive an additional $300 for each qualifying child with a valid Social Security number.

Now, those with incomes greater than $75,000 if single and $150,000 if married and filing jointly will have their payments reduced by 5 percent of the amount over the cap. In other words, the rebate will be reduced by $50 for every $1,000 over the cap.

The most important thing to remember about the stimulus rebate is that you MUST file a 2007 tax return in order to receive the rebate.

I’m sure that brings up a few more questions, like:

What if I don’t normally file a tax return because of my income level?

Even if you do not usually file a return, no payment will be made unless you do. For an example of how to fill out your tax return, please visit http://www.irs.gov/pub/newsroom/1040a.pdf.

What if I receive Social Security or veteran benefits?

If you have at least $3,000 of qualifying income from Social Security benefits, veterans’ disability compensation, pension or survivors’ benefits from the Department of Veterans Affairs, you will be eligible to receive a payment.

What if I file an extension for my tax return?

If you file an extension and wait until October 15, 2008, you will not get a check until year-end. Also, no checks will be issued after December 31.

How is this rebate going to affect my 2008 tax return?

These rebates are a form of advance payments on the 2008 taxes. If for some reason you did not get a rebate or you got a reduced rebate based on your income, you can get an adjustment on your 2008 tax return when filed in 2009. For example, you had a higher than normal income in 2007 but it drops back to a lower income in 2008. You would then be eligible for the rebate on your 2009 tax return. If your income was too low in 2007 and you received a reduced rebate or no rebate but you qualify in 2008, you can then receive the rebate.

For additional answers to some frequently asked questions about the stimulus rebate, visit http://www.irs.gov/newsroom/article/0,,id=179181,00.html.

Peter Hukki is an Enrolled Agent for JK Harris and Company, LLC. He has been an EA since 1974 and is also a practicing Tax Practitioner, completing tax returns for individuals, corporations, trusts, partnerships and estates.

Frank Hutto – CERTIFIED FINANCIAL PLANNER™, JK Harris Advisors, LLC

Some people equate life insurance with tragedy and death. However, when you think about it, life insurance truly is for the living. In fact, many financial experts generally believe life insurance to be a cornerstone of sound financial planning.

Life insurance can actually be a cost-effective way to provide for your loved ones after you are gone. For instance, if you have children or other dependents, what would happen to them if they no longer have your income to rely on to pay even the most basic of household bills?

Without life insurance, your loved ones will have to worry about burial costs, credit card debts, medical expenses not covered by health insurance and maybe even estate taxes. With life insurance, they may be able to pay off a mortgage or auto loan, supplement their retirement savings or even fund college tuition.

Not so long ago, experts recommended that families carry a life insurance policy with a death benefit of between five and seven times their annual household income. Today, however, most advisors now recommend eight to 10 times the annual household income.
Unfortunately, recent statistics show that only approximately 61 percent of adult Americans actually have life insurance, and many carry about $300,000 less than they should.

Life insurance is just one small way of making sure your loved ones are taken care of when you are no longer around to do it yourself. If you aren’t sure what kind of life insurance to purchase or even how much, it’s best to consult a professional financial advisor, such as JK Harris Advisors, LLC. JK Harris Advisors does not sell life insurance but can provide objective advice on the types of insurance you need to protect your assets and income.

Note: JK Harris Advisors, LLC, is a registered SEC company. The firm is affiliated with the JK Harris family of companies, which together comprise one of the nation’s largest organizations specializing in tax resolution and debt management issues. JK Harris Advisors does not sell stocks, bonds, mutual funds or insurance or manage investments.

David Bauman, Enrolled Agent

Tax season is here, and I know what you’re thinking. You’re thinking, “I have plenty of time until the April 15th deadline. There’s no need to rush.”

It’s true that you have nearly three months until the filing deadline. However, whether you are doing your own returns or having someone else prepare them for you, it’s never too soon to start getting your documentation and forms together. In fact, I recommend that you use the first 45 days of the new year to assemble, organize and label all of your records that will be necessary to have your taxes prepared.

You can start with records already in your possession, such as copies of your 2006 Federal and State tax returns; monthly bank, mortgage and investment broker statements; real estate rental income and expenses; property tax bills (prior and current years) medical bills; receipts for charitable contributions; and tax representation and preparation fees for 2007, just to name a few.

Next you will want to be on the lookout for forms and documentation in the mail. Starting in late January and continuing into February, you will want to begin looking for the following: W-2, 1099-INT, 1099-DIV, 1099-MISC (for self-employed people, and/or rental income), 1099-B (stock sales), 1099-R (IRA and pension statements), 1099-G (unemployment and state tax refunds), SSA-1099 (Social Security), 1099-A or C (relief of debt income), 1098 (mortgage interest) 1098-T (tuition payment statement), and letters from charities detailing your gifts throughout the year.

Now that you have an idea of what you will need, you can start gathering this information ahead of time, and you won’t have to scramble at the last minute to get it all together. This early preparation will help you or your tax preparer complete your returns correctly and have them filed by the deadline.

Good luck!

David Bauman is an Enrolled Agent with more than 20 years of tax preparation experience, 15 years as a self-employed tax practitioner and five as a Tax Manager for 1st Nationwide Bank. He also has 10 years of tax representation under his belt. He has been with JK Harris since 2002.

I can understand how difficult it can be trying to repay a student loan, especially if you cannot afford the high monthly payment amount set forth by the lending company.

And, I know that Kimberly Martin, of Greensboro, NC, knew that feeling all too well when she defaulted on her student loan and was placed under a 15 percent Administrative Wage Garnishment by the U.S. Department of Education. The IRS was even taking her income tax refund each year and applying it to her student loan balance under the Treasury Offset Program. Yet, she still owed nearly $11,000.

Thankfully she came to us, and we were able to get Kimberly into the Student Loan Rehabilitation Program, with monthly payments she can actually afford. We were also able to have the wage garnishment stopped by proving financial hardship through a hearing with the U.S. Department of Education.

“This issue has been a nightmare for years, until now,” Kimberly said.

Well, Kimberly, the nightmare is over. I am so glad we were able to help.

David Bauman, Enrolled Agent

Hoping for a quick refund on your taxes this year? Unfortunately, that is not going to happen for some taxpayers. Because of the new legislation for the Alternative Minimum Tax “patch,” as many as 13.5 million Americans will not receive their refund as quickly as they may hope.

This is going to affect anyone who files returns with the following forms: Form 8863, Education Credit; Form 5695, Residential Energy Credit; Schedule 2, Child and Dependent Care Expenses for Form 1040A; Form 8396, Mortgage Interest Credit; and Form 8859, District of Columbia First-time Homebuyer Credit.

The IRS expects its computers to be reprogrammed for the tax law changes and ready to begin processing these returns by February 11. So, that means if you use one or more of these forms, you will not be able to file your return until at least February 11.

All is not lost, however! While waiting, use the extra time to assemble, organize and label all of your records that will be necessary for having your taxes prepared.
If you would like more information about the AMT, you can go to www.irs.gov.

David Bauman is an Enrolled Agent with more than 20 years of tax preparation experience, 15 years as a self-employed tax practitioner and five as a Tax Manager for 1st Nationwide Bank. He also has 10 years of tax representation work under his belt. He has been with JK Harris since 2002.