Posted Sunday, December 1, 2024

The quality of your tax return and the timeliness of its preparation depend strongly on obtaining all your tax documents and information. Therefore, we have created the following checklist for our worksheets as secure digital forms (also available as non-fillable PDFs) and tax related documents. As more companies move to electronic delivery of their tax documents and statements, this checklist will help ensure you are not missing important tax documentation.

We need copies of the following (all pages, front and back, don’t hold out on us, please!)-

Income Tax Docs

• W-2s from Employers
• K-1s from Partnerships, S Corps, Investments, Trusts, Estates
• 1099s from Banks, Investment Brokers, Government Agencies, Contract Employers, etc.
• Cryptocurrency reports or statements showing sales and cost basis data

Home Tax Docs

• 1098s from Mortgage Lenders (the form is now required, not just the figures)
• Home Purchase / Refinance Documents, Closing Disclosure / Settlement Statements
• Private Mortgage Insurance (PMI) Premiums, Year-End Loan Statements
• Property / Real Estate Taxes Paid

Other Tax Docs and Information

• Charitable Donations (your state might allow even if you don’t itemize)
• Student Loan Interest, 529 Plan Statements
• Child Care Statements
• Identity Theft IPIN (Retrieve IRS IPIN)
• 1095-A if using Marketplace Health Insurance
• Estimated Tax Payments (yes, we need to confirm even if we’ve given you vouchers)

Energy Credits Tax Docs

• Sales order for EV or hybrid vehicle purchase
• Invoices for solar and energy improvements

New to WCG (yay!)

• Last Year’s 1040 tax return and state tax returns, all pages, don’t hold back
• Everyone’s birth dates (this is often overlooked, and not found on a tax return)

The IRS, American Institute of Certified Public Accountants (AICPA), ethical guidelines and our professional liability insurance require client engagement agreements. They can be demanding that way. Please click on the button below to electronically review and sign this agreement. It is easy and painless, and needs to be submitted prior to the preparation of your tax returns. Yes, we need one for every year. Yes, we need one even if you are a Business Advisory, Investor Patrol, or Tax Patrol Services client.

The second button is our “combo” engagement- one form for both your 1040 tax return and your business entity tax return (1065, 1120, 1120S). Fun!

Not all worksheets are required. They are only used when the data is not found elsewhere (such as charity or rental property) or if you need to update things (such as banking information for direct deposit).

Contact Info

Please submit your contact information if you are new to WCG. Even if you are a returning client, please confirm your mailing address, phone numbers, email and banking information for tax preparation completeness.  Also, the IRS and several states are requiring that a government issued ID be electronically submitted with your individual tax returns to curb identify theft.

Home and Family Worksheets

For child care, we need a statement from the provider which includes their EIN. For 529 plans, we need a statement as well showing the name of the plan and account numbers.

Tax Questionnaire

Please review the tax questionnaire form below to detail medical, ACA, retirement contributions, divorce stuff, tax payments, etc. Please don’t overlook this. This is where we dump all the other stuff we can’t squeeze into a more relevant organizer or worksheet. Simply review the Yes / No questions with free form boxes for your colorful explanation. Piece of cake! Yes, it will seem repetitive at times.

Expats

For our expatriates living and working overseas, we have a special Sending Docs Checklist addendum for you. Please click on the button below for supplemental information.

It is not enough to supply a statement from your property manager or online rental management system. These are really good starts, but we need additional information such as historical data, the type of rental (short-term, long-term), your participation in the rental, among other things.

New to WCG

• Prior year depreciation schedules showing cost basis and service dates (this can be a challenge)
• List of improvements, completion dates, values, if depreciated in earlier years
• Form 8582 or similar detailing any disallowed passive losses from prior years on your rental properties

New Rental Setup

• Closing Disclosure / Settlement Statements or HUDs for purchases, refinances and/or sales (if available)
• Acquisition costs (often overlooked)
• List of improvements getting the rental ready for service

Revenue and Expense Data

The first two buttons will help you organize your rental expenses including required questions to ensure we are reporting the activity correctly. The Excel version is called our Simplified Rental Ops, or the SRO.

Rental Property Sale

If you sold a rental property, please review the information below and submit the Property Sale Worksheet to minimize capital gains. If you are performing a 1031 like-kind exchange, let’s chat!

Rental Property Light Reading

WCG has a team of real estate CPAs ready to assist you with your rental property and real estate investments. Very few tax professionals and CPA firms specialize in real estate to provide you solid consultation, tax planning including tax reduction strategies, and tax return preparation. From real estate investors to casual landlords, we can help. Here are some selected excerpts from our new book I Just Got a Rental, What Do I Do?

If your business requires a separate business tax return such as a Partnership (1065), Corporation (1120) or S Corporation (1120S), we have a separate list of steps. Please use this link to get started on business tax return preparation. The worksheets below will help you gather the information for your business activities to be reported on Schedule C of your individual tax return (Form 1040).

The first three buttons ask for your business activities (revenue, expenses) in different formats. Dealer’s choice! The Excel version seems to be popular (what we call the Simplified Business Ops, or SBO for short).

Here are some important dates and considerations for us to help manage expectations-

Tax Docs – Monday, March 10, 2025

All tax documentation must be received for us to guarantee an on-time filing (we routinely receive documentation well into September and still complete the tax returns on time- we just can’t promise it).

Efile Auth – Monday, April 7, 2025

All eFile authorizations and fee payments must be received.

Filing Day – Tuesday, April 15, 2025

The filing deadline for all individual tax returns.

Our turnaround times vary throughout the year. We will also update you with email and text alerts along the way. But! Around March 1 and again September 1 or so, our attention is engulfed with business entity tax returns (S Corps and Partnerships) which are due March 15, and September 16 for extended tax returns. The earlier you can track down W-2s, 1098s, 1099s and other tax documents, the better for everyone. We hope you understand as we attempt to balance firm resources with client needs and filing deadlines. Having said that, we have a small, dedicated team who primarily prepares individual tax returns (Form 1040) to help offset this logjam.

We have a soft-close at 4:05PM on Fridays to enjoy a beer, chips and salsa, and to unwind a bit. Apparently having fun before 4:00 is frowned upon in our establishment. Back at it on Saturday!

You might need a tax return “rushed” for various reasons. If we do not have substantially all the required information to prepare a tax return by our document cutoff date of Monday, March 10, the following minimum rush fees based on complexity may apply-

• After March 10, $250.
• After March 24, $500.
• After March 31, $750.
• After April 7, Not available.

These fees might be waived or increased depending on your situation. Please note- we are not saying you must pay this rush fee if you miss a cutoff; we only charge it if you want a guaranteed timely filing once we are past the Monday, March 10 document cutoff. Having said all this, nothing good happens when people are rushed at the last minute. We will accept the rush arrangement on a case-by-case basis.

Extensions

If you want to extend your tax returns, a few things to keep in mind. First, we must get written approval from you to extend your tax returns. We cannot legally file an extension without permission. So, if we don’t hear from you, an extension will not be filed. Failure to file is a huge penalty (5% per month based on tax due).

Second, an extension to file is NOT an extension to pay. Taxes are due Tuesday, April 15, 2025. If you want to determine your general tax liability so you may send a payment with the extension, please use the link below for instructions. Failure to pay is a smaller penalty (0.5% per month based on tax due).

Click here to extend your tax returns.

A few more things… Failure to file and failure to pay penalties do not apply when you are receiving a tax refund. We must receive your tax return extension authorization by Monday, April 7, 2025. Also, please don’t believe your produce clerk or the guy you met on the train; while they mean well, tax return extensions do not increase your audit rate risk. That is just gibberish.

Critical Note: Extended tax returns will be completed in August or September provided we have everything we need from you. If you need them prepared sooner, please contact us. May, June and July are reserved for 2025 tax planning.

Our turnaround time increases to 12-15 days during the off-season to accommodate for mental breaks and vacations. Frankly, our motivation wanes slightly after April 15 but we bounce back fast.

Here is the timeline for tax returns-

	Individuals / C Corps 1040 / 1120	Partnerships / S Corps 1065 / 1120S
Tax Documents Due	Mon, March 10	Mon, February 10
eFile and Fee Payments Due	Mon, April 7	Mon, March 10
Filing Deadline	Tue, April 15	Mon, March 17

Please note the Monday, March 10 deadline for 1040 tax documents and financial data. This date can creep up on everyone quickly given typical life distractions.

If You Owe Taxes

If money is tight, our recommendation is to file your tax returns and then work out a payment plan with the IRS. For any amount under $50,000 the process is done via phone or online, and the terms are generally 6% for 60 months (might be less depending on the amount). There are other devils in the details such as set up fees, automatic ACH, accruing penalty and interest, etc. However, the installment agreement with the IRS does not show on your credit report and is a quick way to get out of a bad situation.

Under no circumstances should you not file your tax returns. File on time, and then figure out the money later. As mentioned before, the failure to file penalty is huge.

College Interns

WCG CPAs & Advisors gives back to our accounting community by routinely hiring college students to provide seasonal tax support to our Tax Accountants and Tax Managers. We encourage them to communicate directly with you, the wonderful client, to gather necessary information and keep things moving along. Everyone was new at some point in their careers, so please try to extend extra grace and patience as our Tax Support Team interacts with you. If at any time communication is breaking down, please reach out to your Client Manager directly.

K-1s and States, Local or Other Taxing Jurisdictions

K-1s used to be only for the rich and shameless. However, with the rapid rise in various investments beyond mutual funds, ETFs, stocks and bonds, K-1s are becoming very common for the casual investor. typically allocate 30 minutes of “K-1 bucks” as part of your tax return preparation fee. Afterwards, our additional fee is based on an hourly rate of $250. This is the only additional fee that WCG adds based on time spent. We are not an hourly rate time billing sort of firm… our fees are based on value received or impact created. Over the years we’ve seen K-1s and their complexity dramatically increase, but given the variable nature of each investment, a hybrid method of fee range + hourly rate is prudent.

Additional state, local or other taxing jurisdiction income tax returns might be required because of changing residency and / or various business activities including K-1s. It is common for an investment into an entity to create a state income tax return filing obligation for its owners (investors). We expect 1-2 state, local or other taxing jurisdiction tax returns as a normal course of tax return preparation. Should additional tax returns be required or if complex state income apportionment is required, additional tax return preparation fees will be necessary. Generally, this fee is $100 to $250 per state, local or other taxing jurisdiction income tax return.

Security and Privacy Procedures

Your security and privacy are very important to everyone at WCG. Please review the various policies and procedures which are implemented to protect your confidential information.

We provide worldwide tax preparation service and your ability to communicate with us is critical to everyone’s success. And your comfort level in sending sensitive and personal information is our top priority so we have implemented three ways to safely and securely send your tax documents to us:

Sharefile

Since 2007 we have used ShareFile to provides secure, online document exchange. Sharefile will allow you to securely upload your tax documents to our office. As more companies electronically provide year-end tax statements and forms, and as scanners become more user friendly, uploading these files will save you time and resources. In addition, Sharefile will be used to deliver your tax returns for review prior to eFiling.

Note on Scanning: Do what you can, but know that creating and submitting a PDF for each tax document is our selfish preference should you be wondering. We drag each tax document into various folders in your electronic tax binder.

Most operating systems have a PDF printer already installed- if not, please do an internet search for free PDF printers (we use Cute PDF ourselves). This is a very handy tool which installs a PDF printer allowing you to print anything to a PDF file. Screen shots, online activity, Excel spreadsheets; anything you normally print to paper can be saved as a PDF. This is especially useful for bank website or other dynamic websites where you cannot directly save the information.

We understand not everyone will be comfortable using Sharefile and therefore we will accommodate all reasonable requests accompanied with cash or booze for alternative ways of sending your tax documents to us.

Otherwise, you can access Sharefile using this link.

Secure Fax

While super duper rare, if you decide to fax your tax documents our toll-free fax number is 855-345-9700. We will email you and send a text message alerting you that your fax was received. We will also upload your faxed documents to Sharefile should you need this information again in the future. Please provide a cover letter with all faxes. If you want to be a superstar and have our tax support team think you are the best client ever, you should initial and number each page. But that is not required.

Mail

If you do not have access to a fax machine or scanner, you may also mail your information to us. We encourage the use of FedEx or UPS. Send us copies, please! Our mailing address is:

WCG CPAs & Advisors
2393 Flying Horse Club Drive
Colorado Springs, CO 80921

Road Trip

Our Colorado Springs offices are open Tuesday-Thursday during tax season. If making a road trip to our office, tax preparation seems to improve dramatically with donuts. You can also hang out and have some coffee in our social lounge. Fun!

Note: The ability to maintain our competitive fees relies on receiving soft copies (faxes, scans, emails) or hard copies of your originals. If you send us original documents and do not want them returned to you we will maintain them in our office for three years. If you want originals sent back to you, please understand that we do not have extra resources during tax season for this activity- we can only return originals in May or November.

All tax documents and work papers that you provide as hard copies will be scanned and uploaded to your Sharefile.

Let Us Know

Lastly, you can use any combination of these methods- if you want to upload some documents and fax others, we are flexible. However, it is difficult to know when clients are done sending their tax documents. So, please send an email to [email protected] with a “G2G” or give us a shout at 719-387-9800 to let us know you are done. We love phone calls from our clients- voices, stories, weather updates, the latest disaster your kid created, random tax questions- all good stuff!

Also, if you are waiting on one last tax document such as a rogue K-1 or 1099, please send what you have. We will prepare a preliminary tax return and simply drop in the late document at the last minute.

Appointment

Over 80% of our tax clients live outside of Colorado, therefore we are proficient in preparing your tax return without a face-to-face appointment. However, if Colorado Springs is convenient for you or if you would like to videoconference via Teams, please call or email us to schedule. If an appointment is inconvenient, remember you can always mail, fax or scan your tax documents to us.

Growing Pains

We are a growing company and every year we retool our procedures in the name of improving the client experience. The unfortunate thing about our business is that we don’t know our process is broken or needs improvement until about March 26, and the devil we created is the devil we live with until April 15. Each year we attempt to improve our process for you- the feedback you provide is tremendous, and we appreciate all the comments and suggestions.

Rest assured that anytime you feel your needs are not being met, please contact Jason Watson directly. We will stop, listen and work with you one on one to resolve. If we stink at something, we want to know. We’ll make it right, right away.

Here is a timeline of what to expect. Life is all about managing expectations and we attempt to do that here:

Assembly

• You send us your tax stuff and we alert you through an email and a text message that it is received.
• Tax Support reviews it for obvious missing information or items, and contacts you if necessary.
• Your electronic file is assigned to a two-person team based on legacy for returning clients, or type and complexity for new clients. We also alert you with an email and a text message.

Tax Return Preparation

• Your Tax Accountant alongside a Tax Manager or Partner prepare your tax returns. Fun!
• If there are questions or clarifications needed, your Tax Accountant contacts you via email or telephone call. You are also alerted with a text message. We try to only have one point of contact (or one throat to choke) so communications are efficient for you.

Tax Return Review and Filing

• If your tax returns are ready for review, we send a summary email highlighting concerns or questions, upload a PDF copy to Sharefile and alert you with a text message. In the homestretch now!
• If you have questions or comments, you can reply to the tax return summary email or we can schedule an appointment. We always want you to understand your tax returns and feel comfortable about the information being filed. For a scheduled tax return review, we typically allocate about 15-20 minutes for individual tax returns (40 minutes if in-person versus telephone), and 30-40 minutes for partnership and corporate tax returns.

Warning: We strongly encourage you to schedule your tax return review within 10 business days of receiving the draft copies. If you have had draft copies of your tax returns for more than 10 business days, we might not have availability to review your tax returns prior to the filing deadline. Also, we cannot review your individual tax return during April or October. Do not feel rushed! We can simply extend the filing of the tax returns until May or June, and schedule a review for that time.

Please move ‘review tax returns’ ahead of ‘call mom’ just this one time. Pretty please.

Once you review and approve your tax returns, you need to do two things:

1. Give us permission to eFile your tax returns on your behalf, AND
2. Pay your tax preparation fee. No tax returns are filed until payment is made.

When we deliver tax returns, an invoice is sent. A few hours later, an eFile authorization is also sent. Both are sent to your email from our workflow software called Canopy. You can also directly access this information and learn more here.

About 2-3 days after eFiling you will receive emails from our tax software (UltraTax) letting you know that your tax returns have been received.

It is common for states to accept your tax returns before the IRS. We get the same notifications CCd to us and alert you with a text message as well. We monitor the acceptance of your tax returns, and follow up with the taxing agencies after 72 hours if an acceptance notification is not received.

About 4-6 weeks after receiving acceptance notifications, refunds (if applicable) are directly deposited into your account.

States are routinely flagging random tax returns for manual processing which adds about 8-12 weeks to the refund and at times they will also mail a paper refund check (to curb tax return fraud).

Boom! That’s it (at least until next year). Enjoy your spring and summer!

Well, that is not entirely true. May, June and July is our tax planning season. Tax planning is automagically included with our Business Advisory, Investor Patrol and Tax Patrol Services. We will send correspondence to remind you as well.

Investor Patrol is a wonderful tax service for those who don’t need all the business advisory bells and whistles, but desire pro-active tax planning and scenario-based decision making assistance from an experienced tax consultant. Have a quick tax question? Need to know the depreciation rules as you furnish that new short-term rental? Want to kick around Real Estate Professional designation? Wondering what your April tax bill is going to be in August?

Investor Patrol is like ski patrol… you might not use it, but you sleep better knowing you have it. We offer three typical versions aptly labeled Houses, Hotels and Monopoly.

We also have Tax Patrol which is similar, but without the rental property and real estate investment mindset.

Both our Patrol Services, Tax and Investor, are specifically designed to give you the freedom to call, text or email us without the worry of being nickeled and dimed like other outdated CPA firms. And! We also provide a tax planning event (usually around May, June and July) where we gather up your financial records like paystubs, rental activities, stock sales, etc. and we create a mock tax return projecting your annual income and eventual tax obligations. We are not big on surprises… bad news in August is palatable, yet bad news on April 15 is unacceptable.

Our Patrol Services include tax preparation, estimated tax payment calculations, unlimited complimentary quick chats and a tax planning event plus IRS audit defense for any tax return that we prepare.

If you have any questions, please feel free to call us at 719-387-9800 or email [email protected]. Thanks again for your time- We look forward to working with you!!