  PO Box 2214 Oregon City OR 97045 503-656-0699 |
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Date last modified:
12/27/07 |
November 2007 Newsletter Gathering Your Tax Information As we come to year end, it is time to remind you that in order to claim charitable contributions you must maintain "proof" of the donation. The documentation can be a receipt, cancelled check or acknowledgement letter. Donations of clothing and household goods to groups like Goodwill, must be substantiated with a receipt, list of items donated and value you are claiming. We need to see your proof when we prepare your 2007 and future returns.Did you buy a new appliance, windows, doors, furnace, new hybrid car or other energy-efficient device? There are valuable tax credits for some purchases. For your federal return, we need the "Manufacturer’s Certification" for energy upgrades to your personal residence. Ask your contractor for the energy specs for your purchase. Car credits are tied to model and date of purchase. Bring your bill of sale showing the model purchased and the date of purchase. Oregon offers a wealth of credits – you MUST APPLY for them prior to claiming the credit on your return. Go to the Newsletter link on our website to connect with websites providing additional information and forms you will need.If your business maintains Inventory, you are expected to do an "end-of-year" inventory count. Detail inventory on hand and your cost (not the sales value). Retailers, resellers and manufacturers will likely have inventory. Trades people and consultants generally don’t have inventory.Tax documents will begin arriving at your home in January; most envelopes will say "Important Tax Documents". SAVE the documents in a safe place. W-2s and 1099s are supposed to be mailed by January 31. Brokerage statements may be corrected in February or March. K-1s from partnerships, S-Corps and trusts often won’t arrive until after March 15. If you have changed your address during the year, be sure former employers have your current address. The same applies for banks and investment accounts that may be sending you income reporting documents.Bring us the closing statements from all new home loans acquired during 2007 – this means the final statement from new home purchases, home equity loans and refinancing existing loans. If you sold a home during 2007, bring the closing statement from that transaction.
Kick Up Your Heels! The state of Oregon will send out "Kicker" checks in mid-December. To estimate what you might receive, refer to your 2006 tax return. Kicker checks will be 18.6% of tax before credits. To find your 2006 tax, look at line 29 on Form 40, line 13 on Form 40S, line 51 on Form 40N or line 50 on Form 40P.You will receive a kicker if you had tax on your 2006 income, filed your 2006 return on time and do not have any outstanding tax or other state debts. You will not receive a kicker if you did not file a tax return or had no tax on your income. If you filed your return near the October 15 extension deadline or later, your kicker may be delayed. If you changed your address since your taxes were filed, your kicker may be delayed. If you have divorced or separated since filing your 2006 return, only one person (either the person still at the original filing address or the first person on the return) will receive the kicker check. Kicker checks will be mailed, not directly deposited. Kicker checks must be claimed as income on your 2007 federal tax return if you itemized your deductions in 2006. Employment Issues Taxing authorities generally adopt a conservative point of view as to whether a worker is an employee or an independent contractor. To be classified as an independent contractor, a person must have control over the job and any subcontractors, decisions made in doing the job and control their own hours; you cannot set the time of day a contractor must work. An independent contractor must appear to be in
business for him- or herself, which means having a business card, licensing and
insurance, advertising and serving multiple clients. Independent contractors
must fill out a W-9 form (similar to a Independent contractors pay all their own taxes; an employer pays certain taxes for its employees and does withholding of some taxes. If you have questions about how to classify a worker contact us or the Oregon Department of Employment. Upcoming Tax Deadlines ¨ 4th Quarter Oregon Personal Tax Estimates due December 31, 2007, if you itemize your deductions.¨ 4th Quarter Federal Personal Tax Estimates due January 15, 2008; Oregon due same day if you do not itemize your deductions.¨ 4th Quarter Federal and State Payroll Taxes and 2007 FUTA tax due January 31, 2008.¨ W-2s and 1099s mailed out by January 31, 2008.¨ 2007 Personal Tax Returns will be due Tuesday, April 15, 2008. Don’t wait until the last minute to file!Short Takes ¨ New for 2008…we now are able to take debit and credit cards. Cash and checks are still welcome!¨ Selling items on Ebay, or similar websites, may not be a "tax-free" transaction. If you are a casual seller, you may have capital gain income; personal losses are not reportable. Regular sellers must report income as a business activity or hobby.¨ When you send a check to the IRS, state or local taxing authority, be sure to write the tax year and form number on the memo line of your check, even if you send the check with the tax return or payment coupon. Otherwise, your payment may not be applied to the tax you are paying. You won’t know this has happened until you receive a letter and bill for tax due plus penalties and interest.
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