Tennessee Board of Accountancy Offers Tax Preparation Tips

NASHVILLE – It’s tax time and the Tennessee Department of Commerce and Insurance’s Board of Accountancy has tips for even the most tenacious tax preparer.

“Although some people dread completing their tax return, it’s a great opportunity to reflect back on the past year and plan for the future,” Commissioner Julie Mix McPeak says. “If you choose to use a tax preparation company or hire a Certified Public Accountant (CPA) make sure to verify the licensure of the individual handling your personal identification information. Tennesseans can verify an accountant’s license at http://verify.tn.gov or by calling the Board of Accountancy at (615) 741-2550.”  

Board of Accountancy’s Executive Director Mark Crocker, CPA, CGMA, reminds Tennesseans to keep their tax returns for six years and more after filing.

“Even after you press submit, drop your tax return in the mail, or sign on the dotted line at the accountant’s office, it’s important to keep all tax returns, particularly complex returns,” Crocker says. “It’s important to have a record of each year. Additionally, you should always keep all loan, investment, real estate, IRA, and divorce records.”

Tips for preparing your 2013 Federal Income Tax Return from the Board of Accountancy:

• Preparing your own taxes this year? Make sure you read the IRS’s Tax Guide 2013. An online version can be found here: http://www.irs.gov/pub/irs-pdf/p17.pdf.
• Hiring a licensed and registered CPA is a great way to complete your tax return, but make sure you are working with a licensed and registered CPA. Tennesseans can verify the license of an accountant at http://verify.tn.gov or by calling the Board of Accountancy at (615) 741-2550.
• Anyone preparing a tax return at cost to the consumer must have a PTIN (Practitioner Tax Identification Number) issued by the Internal Revenue Service.  The tax preparer should have a receipt to show that they are registered with the IRS. If an individual preparing your tax return for money cannot prove that they are registered with the IRS, do not give them your personal identification information.
• If you don’t want to pay anyone to prepare your return you may be able to get assistance from VITA (IRS Volunteer Income Tax Assistance Program) or TCE (Tax Counseling for the Elderly).  You can find a VITA site at www.irs.gov or by calling 1-800-906-9887.
• Wondering how long you have to keep records?
  • For tax returns and supporting documents you should keep them six years after the return was filed. 
  • Complex tax returns and documents should be kept for the life of the taxpayer plus six years. 
  • Real estate documents should be kept for the ownership period plus six years. 
  • Investment documents should be kept for the ownership period plus six years. 
  • Loan documents should be kept for the life of the loan plus six years. 
  • IRA documents/Form 8606 should be kept for the life of IRA plus six years. 
  • Divorce documents should be kept for the life of first ex-spouse plus three years.
• If you need an extension remember that the extension must be filed by the due date of the return for which it is being filed.  An extension to file is just that – an extension to file.  It is not an extension to pay.  You must pay all taxes owed at the original due date of the return or be subject to underpayment penalties when you file the return.
• If you own a home and are paying on a mortgage, you may have enough deductions to itemize.  Generally, the home interest paid will be as much as a standard deduction, so everything else is additional deductions, i.e., real estate taxes, sales taxes, charitable contributions.
• With ever increasing costs of medical insurance, co-pays, deductibles, and medical costs in general, do not overlook a possible medical deduction.  Premiums can be deducted if they are paid with “after-tax” dollars.  The deductible is that amount over 10 percent of your adjusted gross income (AGI), unless you are at least 65 years old, then it is 7.5 percent. 
• This is the last year for the sales tax deduction.  If you have saved your receipts for all 2013 purchases, make sure you take advantage of this deduction.  If adding them up is a hassle, make it a family project.  Get the family around the kitchen table and assign each family member a pile of receipts to add up.     

The Department of Commerce and Insurance works to protect consumers while ensuring fair competition for industries and professionals who do business in Tennessee. Follow us on Facebook, Twitter and YouTube for a daily dose of fire prevention tips, consumer affairs information and much more! 

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