Individual Tax Returns

Individual income tax returns can run a broad spectrum - from simple 1040's to complex head scratchers.  Here are some common tax situations where TaxCrunch can provide value for you:

• Rental Properties: Definitely an area where do-it-yourself preparers tend to rely on their tax software.  Understanding the nuances of depreciation, when to capitalize or expense an item, or simply knowing what is actually deductible - we can help.  This area can get real tricky if you have multiple properties or when you dispose of a rental property.

• Self-Employed: Whether you're a sole proprietor running a side business, an independent contractor who receives 1099 income, or an LLC with just 1 member - you'll be filing your business activity on the infamous Schedule C on your personal tax return.  Returns with a Schedule C boast an IRS audit rate of approximately 2% - mainly due to the fact many taxpayers aggressively abuse this form with generous deductions or report side businesses with constant losses (which the IRS considers a hobby instead of a business).  Taxpayers beware when filing a return with a Schedule C form.

• Employee Stock: Your employer may have provided you with an opportunity to participate in one of many types of incentive benefit plans.  These may include stock options, restricted stock and restricted stock units (RSU's), stock appreciation rights (SAR's), phantom stock, and employee stock purchase plans (ESPP's).  Nothing will make my clients' heads spin faster than when trying to make sense of the tax implications of their stock benefits.  In this area, it is critical to keep good historical records, as you'll often need to claw back many years of activity when your stock is actually sold.

• Stock Trading:  For those of you who hold taxable investment accounts and high volume trading activity - this one's for you.  Beginning in 2011, the IRS began requiring brokers to include the cost basis of the securities on their annual 1099-B forms.  This has helped tremendously - however it isn't foolproof - especially when you're selling items that were held at a previous brokerage - or just plain old investments.  Careless record keeping or hastily preparing this form can result in paying higher taxes than needed.  Special attention should be paid to day traders as well, since the sheer volume of activity screams for errors or omissions when filing.

• Multiple State Returns:  Having multiple state returns can get complex real fast.  Some states have reciprocal agreements with other states - allowing taxpayers to only pay tax in the state they live (versus paying tax in multiple states where they may work).  However, many don't - and all the states have unique tax rates and rules.  Some even require city and local taxes as well. These returns require an extra level of review to ensure compliance at all levels.