Tax Season Checklist

Spring is here so tax day is near! Here are some tips to help you get on the path to filing:

  1. Give us your tax documents. It is imperative that we receive your tax information as soon as possible in order to actually file your return or even to file an extension! To get the ball rolling, drop off your documents to our office or upload them to your secure portal. If you don’t yet have the Portal, contact us  here. Even if you haven’t received all of your forms yet, be sure to gather everything that you have so that we can get started!
  1. Sign Form 8879, and any state e-File forms. After we’ve finished preparing your return, you can finds these forms in the portal (if you selected this service on your questionnaire) or in our office. Upload the signed forms back to the Portal or you can bring them into our office. We cannot file your return without these forms.
  2. Pay your tax preparation fee. If you don’t have time to come to our office, you can pay us easily here.
  3. Pay your taxes! This year your tax payments are due on April 17, 2018. If your taxes were set up to be direct debited from your bank account, ensure that these payments were withdrawn.
  4. Pay your first quarter estimates. These payments are also due on April 17, 2018.
  5. If you are considering an extension, let us know! We cannot file an extension without hearing from you first. If you believe you will owe state or federal taxes, we can use any preliminary tax information that you have to determine the amount to pay before the deadline!

Remember, an extension does not grant you permission to delay your tax payment.  Even if you think you can wait until October, the IRS requires full payment of whatever you owe by April 17th of this year; otherwise you could be charged interest and penalties.

Whether you’ve already filed or you’re on your way to filing, tax season is a stressful time for everyone. But as with all aspects of life, planning is essential to minimizing stress. So schedule a meeting with one of our accountants in May or thereafter to learn how you can benefit from tax planning. There are many ways to adjust your tax situation thus helping you keep more of what you earn in your pocket. Click here to inquire about our tax planning offer! Happy Filing!

What does THAT mean?

Did you ever hear a tax term and think: “What does THAT mean?” Well, here’s a list of commonly used tax terms, defined:

8879 – The IRS’s E-fie Signature Authorization Form. This form must always be signed by the taxpayer (and spouse if applicable) once they’ve reviewed their completed tax return, before the tax return can be e-filed. 26 states currently also have e-file authorization forms that must be signed before the taxpayer’s state tax return can be e-filed. This form does not go to the IRS; rather, it is solely for our records.

1040 – Individual Income Tax Return. This is the standard federal income tax form used to report an individual’s gross income.

1120 – Corporation Tax Return. This is the standard form used to report corporate income taxes to the IRS.

1065 – Partnership Tax Return. This the standard form used to report federal income taxes by partnerships and multiple-member Limited Liability Companies (LLCs).

ACP – Audit Correspondence Plan. If your income tax return is randomly selected for a correspondence audit, we will represent you before the IRS so you don’t have to deal with the IRS agent. This is basically audit insurance.

Estimated Tax Payments Vouchers – As the IRS requires tax payments are made throughout the year instead of all at once, our tax preparation software automatically generates these vouchers if they are deemed necessary. These estimates are for the following tax year, based on the tax returns from the prior year. See FAQ page for more information.

P&L or Income Statement – Profit & Loss. This is a financial statement that summarizes income and expenses incurred over a specific period of time.

Balance Sheet – This is a financial statement of assets, liabilities, and capital of a business at a particular point in time.

1099s – These forms report the movement of money from one entity or person to another entity or person. However, various 1099s serve different purposes as follows:

                -MISC – Subcontractor Payments

                -INT – Interest Income

                -DIV – Dividends

                -R – Retirement

K-1 – This form reports a partner or shareholder’s portion of business income, deduction, and credit. K-1 reporting varies depending on whether it comes from a trust, partnership, or S Corporation, but all K-1’s provided detailed information about the type of income, deduction, or loss so that it is accurately reported on the tax return.

Income & Expense Spreadsheet – We have excel spreadsheets for each type of business entity (1065, 1120, Schedule C) as well as more specific spreadsheets for realtors and rental properties. Clients can download the documents, fill in the blanks and return it to us so that we can complete their tax return. These spreadsheets are especially useful for clients for whom we don’t provide bookkeeping services for. This is a useful and handy method for clients to organize their business information that we need to prepare their tax return. Clients can request these ahead of time, or you can also find them here. (link)

Tax Organizer – This is a helpful device at ensuring you have all of the information that we’ll require to successfully and accurately prepare your tax return. This packet will show you all of the tax information that was provided to our firm for last year’s tax return, leaving space so that you can fill in the corresponding information for this year’s tax return. If you would like a tax organizer, please let us know by emailing

Portal – Our online portal is our firm’s secure way of providing you with electronic copies of your tax returns. If you select “Portal” on your tax return questionnaire, we’ll upload your completed return for you to review, and you’ll receive an email when it’s ready. You can also request to use your portal as a File Exchange system to upload your own tax documents to our firm so that we can retrieve them quickly and securely.

CPA – Certified Public Accountant. CPA’s are licensed by the State and have passed the Uniform CPA Examination. They must also work in accord with ethical requirements and enroll in specified levels of continuing education in order to keep an active CPA license. They specialize in creating and interpreting financial statements. CPA’s have unlimited representation rights, so they can represent their clients on any matters, such as audits, payment/collection issues, and appeals.

EA – Enrolled Agent. They are licensed by the IRS and are proficient in federal tax planning, individual and business tax return preparation, and representation. Just like CPA’s, they too must engage in continuing education programs (72 hours every 3 years).

Bookkeeping– This is the process of recording, retrieving, and analyzing financial transactions for an entity. This could include paying suppliers, monitoring accounts receivables, developing financial reports, and recording receipts.

Financial Statements – These usually include income statements, balance sheets, statements of retained earnings and cash flows. These financial statements should coincide with generally accepted accounting principles (GAAP). These statements can be audited by government agencies, accountants, and firms to ensure accuracy.

If you have any questions about the terms listed here please feel free to contact Our team is eager to assist.

Where’s My Refund?

You’ve filed your tax return, so the countdown to receiving your refund begins!

Here’s what you should know as you eagerly anticipate its arrival.

What should happen:

Your refund should be on its way soon! The government typically issues refunds within 4-8 weeks.

If your refund will be directly deposited into your account, it’s likely you’ll receive it sooner than if you request a paper check to be mailed to you instead.

What could happen:

Sometimes, refunds can be issued even before 4 weeks. But pleasant surprises like this are rare, so don’t get too excited!

On the other hand, if your return is being paper filed or is an amended return, it could take more than 12 weeks for your refund to arrive, especially if it’s a busy time of the year!

There’s also another possibility – if you’re required to pay estimated tax payments for the current year, your refund might have been applied forward to cover some or all of next year’s estimated tax payments. But fear not! This is actually beneficial, as it’s much more convenient to have the refund applied forward instead of waiting for the refund to arrive and then immediately writing a check to the government. However, if you prefer to receive your refund now or don’t believe you will owe estimates this year, we can make this adjustment in the return only if the return has not yet been filed.

What you can do:

  • Keep the date your taxes were filed in mind should your refund take longer than expected to arrive.
  • To track your refund, click below:

Unfortunately, there’s no hard and fast way to determine the ETA of your refund. If after considering each of the above scenarios, you still haven’t received your refund, contact our office to see how we can assist.

How To Avoid A Tax Audit

As federal and state budget deficits balloon out of control, the IRS and other taxing authorities are working harder to chase every tax dollar. Your odds of getting audited or receiving other unwelcome correspondence are climbing every year!

Responding to simple written notices can be expensive and time‐consuming, and responding to an actual audit can be even more of a financial burden, potentially resulting in hefty penalties. Even if no penalty is imposed, audits are stressful and can take several years to resolve.

Read and apply the steps below to avoid an IRS audit nightmare:

  1. Allocate income and expenses wisely. Although audits are usually chosen at random, business owners have a higher risk of being audited. So don’t understate income or overstate deductions, but be reasonable with what you allocate to these categories. If the math doesn’t add up to you, then it definitely won’t add up to the IRS.
  1. Double-check all IRS documents. When you receive any IRS documents, like 1099’s or W2’s, make sure that they are accurately and appropriately included in your tax return. You may also be required to complete additional forms (i.e. Schedule C for sole proprietorships, Form 1065 for partnerships, Form 1120-S for S corporations or Form 1120 for C corporations). Don’t forget to include these to report your business income and expenses.
  1. Let Alfano & Company advise you year-round, not just during tax time. By regularly assisting you with your financials, we can prevent any behavior that could increase the probability of being audited. In case you do get audited, though, opt in for our Audit Correspondence Plan, which can be likened to annual audit insurance. For an additional fee, we will respond to written notices from federal or state taxing authorities related to this year’s tax return.

Tax Scams – How You Can Stay Protected

Have you ever fallen victim to a scam? If not, you’ve certainly heard of others who have. How can you protect yourself and your loved ones from falling prey to this pervasive trend?

Knowledge Protects

Stay up-to-date on the latest scams. This will put you ahead of the game in terms of preventative measures. To help you, the IRS website keeps the public updated with popular tricks scammers are using.

Some tax payers have experienced receiving emails from scammers posing as the “Taxpayer Advocacy Panel” claiming they have a refund. The scammers want you to click on their links to collect your personal information. If it seems just too good to be true, it probably is.

The IRS will only reach out to you via letter. No matter how skilled they sound or how much information they seem to know about you personally, this is not the IRS.

Remember, the IRS will NEVER:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Ask for credit or debit card numbers over the phone.

Educate yourself and share it with others. This is the best way to keep you and your loved ones financially secure.

Remember, if you are ever contacted by the IRS, proceed with caution. Read here to learn what to do if you receive a notice. Forward any suspicious information to Additionally, it’s always best to have a professional take a look at the notice to investigate its validity. Please contact us regarding any notices you receive. We’re here to help!

How to Prevent Tax Identity Theft

The Federal Trade Commission (FTC) has designated January 29 to February 2, 2018 as Tax Identity Theft Awareness Week .  Tax-related identity theft occurs when someone uses your Social Security number to file a return with your name in order to collect your refund without your knowledge. The theft most likely becomes apparent when you attempt to file your return.

According to a recent Identity Fraud Study released by Javelin Strategy & Research about $16 billion was stolen from 15.4 million Americans in 2016. In the past six years identity thieves have stolen over $107 billion.

Alfano & Company understands how scary and important your concerns are with tax-related identity theft.  Following these simple tips can help you protect your information and offer help if you fall victim to fraud.

What can you to do prevent identity theft?

  • Avoid phishing emails (do not offer important numbers such as your social security information)
  • Mark out important information such as Social Security numbers and bank account information in your emails
  • Don’t ignore any notices you may receive in the postal mail.
  • File your tax return early!

What to do if you’re already a fraud victim?

  • Submit IRS Form 14039, an Identity Theft Affidavit. This will flag your account should any questionable activity occur and alert the IRS.
  • Follow IRS procedures for reporting a fraudulent return.
  • Place a credit freeze on your report.
  • Submit Form 4506-F to request a copy of the fraudulent tax return. This could help you understand how your personal information was used.

Since identity theft issues are increasingly prevalent, it is imperative that you safeguard your financial and tax information!

If you would like assistance with tax-related identity theft issues or tax fraud concerns, our team at Alfano & Company is ready to assist you!   Contact our office here

The Portal – Why You Should Choose It

Paper, portal, or both? If you’ve been a client of Alfano & Company for some time or even if you’ve just begun to benefit from our services, it’s likely that you’ve had to answer that question prior to receiving your completed tax returns. But really, what’s the best option?

What is the Portal?

Although it sounds like something taken straight out of a sci-fi film, it’s not a secret doorway leading to an alternate dimension. It’s actually much more useful than that!

In short, the Portal is a secure file sharing website which our clients can access through  Our portal offers tax preparers and clients a convenient-secure way to view documents, transfer data (like forms and notices), and convey information with a file exchange feature. Once your tax return is completed we will uploaded it to the Portal. Clients can log in and view or download their tax returns 24/7!

Why should you choose the Portal?

Many benefits come with choosing the Portal option, but here are just a few:

  • You can access the return as soon as it’s ready, instead of waiting until our office is open.
  • You can access the Portal from home or work, without needing to drive to our office.
  • If you need your tax return at a later date (for example, if you will be required to provide it to a bank for a mortgage) you don’t have to make copies of the only paper copy you received – you can simply print as many copies as you’d like from the Portal. Or send a secure copy to your banker.
  • Gone are the days you’d need to stop by our office to drop off your 8879! Now you can easily and quickly upload it to the file exchange section.
  • There is NO ADDITIONAL FEE! (If you select either the Paper or Both option there is an additional $25 fee due to the process of printing and assembling paper copies of each tax return.)

Undoubtedly you may hesitate at the idea of sending your tax and financial documents to some kind of cloud because there’s no guarantee your information will be safe. However, sending and receiving documents or tax returns through the portal is much safer than sending this information via email! You can be assured that “your information and data are secured in a network of data centers that are among the most advanced and secure in the world” (

Set up is easy too! If you’d like to start using the portal for your 2017 tax return, contact us! We’ll guide you through the simple process of setting up the portal and uploading your documents in no time!

Retirement Planning – Which Plan is Right for You?

Goodbye, 2017… Hello, 2018!

But wait… the end of the year means … tax season is soon to follow!

Yes, taxpayers will soon be making some pretty hefty decisions. And if you’re retiring, even more so! How can you plan for retirement now? Here are some hints and tips to help you make smart fiscal decisions as the year draws to a close.

What kind of retirement plan should you choose? 

Today, many companies offer both a traditional 401(k) and a Roth 401(k). Here’s how to know which one’s for you:

  • If you are in a lower tax bracket, you might prefer the Roth 401(k). You’ll receive rather significant tax-free withdrawals in retirement.
  • On the other hand, if you are currently in a higher tax bracket and want an immediate tax reduction, you might want to opt for the traditional 401(k). However, even if you are in a higher tax bracket now, you might still want to have a source of tax-free cash flow during retirement. If that’s the case, then go for the Roth 410(k) plan.

In 2017, the maximum you can contribute to a 401(k) is $18,000, plus an additional $6,000 if you are over the age of 50. If you don’t want to maximize these amounts, might consider paying off your credit card bills. Remember, credit card interest is not tax deductible, so it’s beneficial to pay down those credit card balances now. With regards to a home mortgage or student loans, the decision may not be so cut and dry, as these types of interest can be tax deductible.

What if your company does not offer a retirement plan? 

Open and fund an IRA account. Keep in mind, the due date to do so is April 15th, regardless of when you file your taxes.

For IRA withdrawals, IRA owners must take distributions after the age of 70.5. Carefully plan out how much you’d like to withdraw before year-end to keep taxable income low. With the money you withdraw, you could give it to your loved ones, reinvest it elsewhere, move it to a Roth IRA (for a tax-free future), or simply spend it on yourself!

Just like a 401(k), you can choose between a traditional IRA and a Roth IRA. Depending on which tax bracket you find yourself in, the benefits to opening either a traditional IRA or a Roth IRA or similar that of traditional and Roth 401(k)’s. In short:

  • If you are in a lower tax bracket, consider opening a Roth IRA.
  • If you are in a higher tax bracket, consider opening a traditional IRA.

When should I make charitable contributions?

To answer this question, you might want to consider when you’d like to experience a tax deduction. If you write a check to your favorite charity in December, your tax deduction is soon to follow in April! However, should you decide to wait until New Year’s, you’ll have to wait a year before receiving the tax benefit.

Furthermore, if you have stocks or stock funds that have gained value over time, you could choose to give appreciated securities to your favorite cause instead of a check. You’ll still be making excellent use of your funds while helping those in need!

We understand that retirement planning can be complex and confusing. Your financial future is as important to us as it is to you, so feel free to contact us if you’d like further tax planning assistance!

When Does Tax Season Start?

While you may be planning to spend the last moments of December 31st counting down to the New Year (Yay, 2018!), we at Alfano & Company will spend them counting down to the new tax season (Yay, 2017 taxes!).

It’s natural to feel that tax season doesn’t start until sometime in April. After all, you have until April 16th to file your return and so surely you can just quickly take care of it a couple of days before the deadline, right? Or you might think you should file on January 1st – after all, you don’t want to wait too long for your tax refund! However, the real start of tax season falls somewhere in between.

You can certainly start gathering your tax documents in early January if you so wish. However, if you’re waiting on a W2 or 1099 from an employer don’t expect to receive it right away. Employers have until January 31st to mail these tax forms to you, so you might be checking the mail box every day until early February before you can provide everything to your tax preparer.

Say you miraculously receive all of your tax forms the first week of the year; you can file then, right? Not quite. The IRS doesn’t open their virtual doors until January 22nd so you won’t be able to e-file until then. [Jan 22 filing date NOT confirmed – check IRS press release for actual date sometime in December]

Even if you file right on January 22rd, you may experience some difficulties retrieving your refund. Last year Congress passed a law that requires the IRS to hold refunds on tax returns where the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) is being claimed. The IRS must hold the entire refund amount until at least February 15th.

However, just because there’s a lot to wait for in the early stages of tax season it doesn’t mean you should procrastinate and file in April instead. By waiting until April you’re up against the rush of the deadline. There’s a chance you’ll have forgotten to provide your tax preparer with all necessary tax documents, and by the time you gather the remaining information needed to file your return you can end up running out of time!

What do we suggest?

Start gathering your documents as soon as they start arriving in the mail. Make sure you keep them in a safe place so that you don’t have to search your house for your W2 10 minutes before your scheduled appointment with your tax preparer. Schedule your appointment for some time during the second half of February; at this time of year Alfano & Company will be open on Saturdays and certain evenings, so we’ll be more than able to meet with you a time that works well for your schedule! This will give your tax preparer ample time to work on your return, ask for any missing information, and still have plenty of time to complete your return before the deadline. You’ll feel at ease knowing that your tax preparer didn’t feel rushed when working on your tax return!

At Alfano & Company, we’ll need your tax forms by March 19th. Even if you don’t have everything ready by this date, please provide us with everything you currently have at that time. This will allow us to begin work on your return before the April rush begins.

If you’re wondering what tax information we’ll need, you can find a handy list here. And when you are ready to schedule your appointment, click here. We look forward to working with you this tax season!

Micalah Bowden, Office Manager

Charity Scams-Beware!

In the wake of the tumultuous hurricanes, many simply want to help. Open hearts and open hands are truly appreciated during these times. However, scammers exploit this kindness.  The ESET security community comments: “The United States Computer Emergency Readiness Team (US-CERT) issued an advisory … warning the public of the danger of falling for Hurricane Harvey-related charity scams. Merciless scammers have no qualms about exploiting people’s kind-hearted nature by spreading their attacks via social networks and email, linking to counterfeit charity websites designed to steal the public’s payment card details.” How can you be generous without being taken advantage of? You must be on guard.

Donating Tips

    • Donate to charities you know and trust with a proven track record of dealing with disasters.
    • Be alert for charities that seem to have sprung up overnight in connection with current events. Check out the charity with the Better Business Bureau’s (BBB) Wise Giving AllianceCharity NavigatorCharity Watch, or GuideStar.
    • Designate the disaster so you can ensure your funds are going to disaster relief, rather than a general fund.
    • Never click on links or open attachments in e-mails unless you know who sent it.You could unknowingly install malware on your computer.
    • Don’t assume that charity messages posted on social media are legitimate. Research the organization yourself.
    • When texting to donate, confirm the number with the source before you donate.The charge will show up on your mobile phone bill, but donations are not immediate.
    • Find out if the charity or fundraiser must be registered in your state by contacting the National Association of State Charity Officials. If they should be registered, but they’re not, consider donating through another charity.

When searching online for information The ESET security community advises: “Visit legitimate news outlets if you want to keep up-to-date with developing news stories. There are many bogus fly-by-night news sites on the web who will publish anything in the hope of earning some advertising revenue…. Donating through a scam site not only benefits criminals, it also deprives charitable financial support from the people who need it the most.

Always be wary of links that offer you dramatic video footage of a news story. Malicious hackers and scammers know that the public finds it hard to resist clicking on such links, and might have planted malicious content.” Exercising discernment will ensure your generosity goes to those in need. Is the IRS offering benefits to donators?

IRS And Your Donation

On September 5, 2017 The IRS announced that a special relief designed to support leave- based donation programs to aid victims of Hurricane Harvey is in place. How does this work? The article taken from explains, “Under these programs, employees may forgo their vacation, sick or personal leave in exchange for cash payments the employer makes, before Jan. 1, 2019, to charitable organizations providing relief for the victims of this disaster. Under this special relief, the donated leave will not be included in the income or wages of the employees. Employers will be permitted to deduct the cash payments as business expenses.” Need help on how to make these deductions for yourself or as an employer? Contact us today.

Laura Boykins Marketing Coordinator