Sunday, January 22, 2017

Guest Minda Cutcher: Getting Prepared to File Your Tax Return

Hi, Friends.

How's your year going so far? We've been busy, keeping out of trouble. 

Minda Cutcher is a financial advocate for seniors in the San Jose area of Northern California. She gave us information that was very helpful when we were helping Terry move.

Minda's website has a lot of great information about her services and some articles of interest on her blog page. With her permission, I'm posting one of her articles as taxes may be on your mind.

"One of the things I do for clients is help them gather and organize documents needed to prepare their income tax return, or to provide to their tax professional. With April 15 on the horizon, I thought it might be helpful to do a little refresher on the basic documents needed for taxes, especially as it applies to seniors.

Since nearly 60% of taxpayers use professional help to prepare their taxes, I’ve also included some information about the different types of tax professionals, and resources where seniors can get free tax advice and return preparation.
Tax Documents
Hopefully, after my last two blogs about managing critical documents, you’ll be able to assemble these rather quickly.  Everyone’s tax situation is different, so you may find you need additional documents to the basic ones listed here. A good place to start is by looking at your return for last year.  Check with your tax professional if you have any questions or concerns.
  • Income statements, including W-2s, 1099s, 1099-R, Form SSA-1099, Form RRB-1099, 1099B. These statements are supposed to be sent out by February 1. If you have misplaced your SSA-1099, you can request another one using your online social security account.
  • Documents related to the purchase or sale of a home, such as closing costs, etc. Some moving expenses or modifications to a home to make it safe and accessible for an elderly person MAY be deductible as well.  Gather the receipts, and check with your tax professional.
  • Receipts for any tax deductible expenses, donations, etc.
  • Records of deductible mileage, for example a log of miles driven for medical purposes or volunteer activity for qualified charitable organizations.
  • Medical bills – receipts for co-pays from doctors, dentists and other medical professionals; In home care agencies or private pay caregiver costs; patient portions (responsibility) for hospital stays, prescriptions, medical supplies, prescription eye-wear, hearing aids, etc.
  • Health and/or long term care insurance premiums – don’t forget if your parent is living in an assisted living or skilled nursing facility some or all of their “rent” could be deductible as a medical expense
  • Auto registration statement (a portion of your fees may be deductible)
Choosing a tax professional
The best type of tax professional for you – Enrolled agent, CPA, or Tax Preparer (see each described below) – depends on your particular situation.
Enrolled agent. Enrolled agents are licensed to practice by the federal government (“enrolled”) and authorized to appear on behalf of the taxpayer (“agent”) before the IRS. Enrolled agents advise, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any other entities with tax-reporting requirements. Enrolled agents earn their license by passing a comprehensive tax code examination, or by having worked at the IRS for at least five years in a position that regularly interprets and applies the tax code and its regulations.  Additionally, to maintain their status, Enrolled Agents are required to complete 72 hours of continuing education, reported every three years.  Prior to being licensed, Enrolled Agents must also go through a rigorous background check by the IRS.
CPA. CPAs are licensed by state boards of accountancy and may or may not specialize in taxation. CPAs have completed a course of study in accounting at a college or university and have passed the Uniform CPA Examination. They must also have met the experience and good character requirements set by their state board of accountancy, and must comply with ethical standards and continuing education requirements to maintain their active CPA license. Like Enrolled Agents, CPAs have unlimited representation rights, which means they may represent their clients on any matters including audits, payment/collection issues, and appeals.
Tax Preparer. Unlike Enrolled Agents and CPAs, non-credentialed tax preparers have only limited representation rights for their clients.  As of January 1 this year, only tax preparers who have completed an 18-hour voluntary program –the Annual Filing Season Program – will have any representation rights at all. Participants who complete the program, which includes a 6-hour federal tax law refresher course with test, receive an Annual Filing Season Record of Completion from the IRS and are included in a public database of return preparers.
Free tax resources for seniors
Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly provide free help for low-income taxpayers and taxpayers age 60 and older to fill in and file their returns.  AARP (American Association of Retired Persons) also offers free tax assistance at their Tax-Aide sites, located across the country.
Whomever you choose, keep these things in mind:
  1. Check their qualifications. All paid tax return preparers must have a Preparer Tax Identification Number (PTIN). This is a number issued by the IRS that tax preparers must renew and pay a fee for annually.
  2. Check for disciplinary actions and license status via the Better Business Bureau, state board of accountancy or IRS Office of Professional Responsibility (Enrolled Agents).
  3. Review the entire return with the person who prepared it before signing it. Be sure you understand everything. Ask questions if you don’t.
  4. Be sure that the person you hire to prepare your return signs the tax form and includes their PTIN. This is required by law.
  5. Remember that you are legally responsible for what’s on your return even it if is prepared by someone else."
I hope this information is useful for you. Please check on Minda's site for additional articles. 

Best wishes,


Sunday, January 8, 2017

Don't Make Me Raise My Voice All Day

Dear Friends,

How are you? Are you finding ways to learn new things, keep busy, stay active, meet new people and talk with old friends?

In my October 2016 posts about Terry, an elderly relative, I mentioned some health issues. One thing we noticed for years was Terry's hearing problems. Terry misunderstood things we were saying and we had to repeat ourselves and project our voices. Frankly, at the end of a visit, we were tired and aggravated. 

Terry had enjoyed a conversation with other elderly relatives who were happy to have hearing aids. Following a family event where Terry sat quietly and didn't engage in conversation, we had a conversation that seemed to hit home. 

We talked about how much you miss in life when you can't hear people around you, have to have the TV at a very loud volume, miss out on music, can't hear sounds indicating danger such as a smoke alarm.

Although we thought that was enough to make one take action, nothing happened. We all went to lunch and Terry couldn't hear her son talk and had to have a lot more help than necessary just because of this correctable hearing issue. 

Finally Terry got a prescription and went to Costco for hearing aids. (Not all Costcos have this specialty department so check their website.) Terry had learned from a friend and the audiologist that Costco had the best prices.

Because I drove Terry to Costco for the selection and returned to get the hearing aids and learn how to work with them, I was in for a real surprise.

There are many types of hearing aids and Terry chose the smallest ones. These are expensive, but the real surprise was that the battery door has to be opened every night and batteries must be changed weekly. There is a small rubber tip at the ends of the wires that go into the ear, and those tiny tips accumulate wax and must be cleaned regularly. There is a tool that comes with the kit and there are replacement tips to insert into the device.

In Terry's case and people of that age, you're giving complex instructions to people who may have cognitive issues, arthritis or trembling hands. I can't understand what the manufacturers are thinking.

If you or someone you know is going to get hearing aids, be sure to first understand the various device options and requirements, and see if the owner can remember instructions and take care of this device.

When the batteries are changed and the tips are clean, Terry enjoys hearing conversation and being able to participate more fully in activities.

There is an excellent page about age-related hearing loss on the National Institute on Deafness and Other Communication Disorders page including a quiz to see if you may have a hearing problem. You can click on the main page for additional information. I've included the link on this page on our site.

Take care,