Tax Preparation and Personal Finance Management Tools

Whipplewood Tools

WhippleWood CPAs wants all their clients—and potential clients—to be as knowledgeable as possible about personal finance management and tax preparation. To this end, we go the extra mile by providing a wide range of tax help tools and educational materials. Of particular interest and concern to most taxpayers is what document records they should retain, and for how long. Learn all you need to know about storing important tax records with our detailed Records Retention Guide.

2016 Year-End Tax Planning Guide

tax-plan-tool

A guide to help make year-end tax planning a little easier for 2016. This tool highlights various provisions and other potential opportunities for lowering individual and business taxes. Before acting on any of the information presented in the guide, be sure to obtain professional advice.

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My1040 Data (Tax Notebook)

Log in to My1040 Data to create, customize and track tax notebooks, as well as upload data and download completed tax notebooks.

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YEAR-END FORMS W-2 and 1099: IMPORTANT INFORMATION

It’s that time of year. As you consider 2017 tax planning, 2016 payroll, and 2016 1099 reporting, we’ve put together a general summary of essential information to help answer any questions you may have.

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Online Client Tax Organizer

Use this tax organizer to help pull together all your tax information. This basic tax organizer is designed for new clients, who can print and complete the organizer and then fax or mail it to the office. Current clients should contact the office to request a pro forma tax organizer that includes prior year information and carryover data.

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2016 Tax Year Engagement Letter

The engagement letter is used to confirm and specify the terms of our engagement with you and to clarify the nature and extent of tax services we will provide. In order to ensure an understanding of our mutual responsibilities, we ask clients to confirm the arrangements listed on page 8 of this document.

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Sample Capitalization Policy

A sample capitalization policy to modify to meet your needs. Using this policy will establish guidelines for determining whether expenditures should be capitalized as fixed assets or expensed at the time the expenditure was made. This sample policy is intended to be IRS compliant.

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Sample Expense Reimbursement Policy

A sample expense reimbursement policy to modify to meet your needs. Using this policy will establish guidelines for reimbursement of employees’ reasonable business expenses.

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Record Retention Guide

Storing Tax Records, How Long Is Long Enough?

Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the “three-year law” and leads many people to believe they’re safe provided they retain their documents for this period of time.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), or believes there may be indication of fraud, it may go back six years in an audit. To be safe, use the following guidelines.

Business Documents to Keep for:

1 year

Business Documents to Keep for One Year

  • Correspondence with customers and vendors
  • Duplicate deposit slips
  • Purchase orders (other than Purchasing Department copy)
  • Receiving sheets
  • Requisitions
  • Stenographer’s notebooks
  • Stockroom withdrawal forms

3 years

Business Documents to Keep for Three Years

  • Bank statements and reconciliations
  • Employee personnel records (after termination)
  • Employment applications
  • Expired insurance policies
  • General correspondence
  • Internal audit reports
  • Internal reports
  • Petty cash vouchers
  • Physical inventory tags
  • Savings bond registration records of employees
  • Time cards for hourly employees

6 years

Business Documents to Keep for Six Years

  • Accident reports, claims
  • Accounts Payable ledgers and schedules
  • Accounts Receivable ledgers and schedules
  • Cancelled checks
  • Cancelled stock and bond certificates
  • Employment tax records
  • Expense analysis and expense distribution schedules
  • Expired contracts, leases
  • Expired option records
  • Inventories of products, materials, supplies
  • Invoices to customers
  • Notes Receivable ledgers, schedules
  • Payroll records and summaries, including payment to pensioners
  • Plant cost ledgers
  • Purchasing Department copies of purchase orders
  • Sales records
  • Subsidiary ledgers
  • Time books
  • Travel and entertainment records
  • Vouchers for payments to vendors, employees, etc.
  • Voucher register, schedules

Forever

Business Records to Keep Forever

While federal guidelines do not require you to keep tax records “forever,” in many cases there will be other reasons you’ll want to retain these documents indefinitely.

  • Audit reports from CPAs/Accountants
  • Cancelled checks for important payments (especially tax payments)
  • Cash books, charts of accounts
  • Contracts, leases currently in effect
  • Corporate documents (incorporation, charter, by-laws, etc.)
  • Documents substantiating fixed asset additions
  • Deeds
  • Depreciation schedules
  • Financial statements (year-end)
  • General and private ledgers, year-end trial balance
  • Insurance records, current accident reports, claims, policies
  • Investment trade confirmations
  • IRS Revenue Agents’ reports
  • Journals
  • Legal records, correspondence and other important matters
  • Minutes books of directors and stockholders
  • Mortgages, bills of sale
  • Property appraisals by outside appraisers
  • Property records
  • Retirement and pension records
  • Tax returns and worksheets
  • Trademark and patent registrations

Personal Documents to Keep for:

1 year

Personal Documents to Keep for One Year

While it’s important to keep year-end mutual fund and IRA contribution statements forever, you don’t have to save monthly and quarterly statements once the year-end statement has arrived.

3 years

Personal Documents to Keep for Three Years

  • Credit card statements
  • Medical bills (in case of insurance disputes)
  • Utility records
  • Estate planning
  • Expired insurance policies

6 years

Personal Documents to Keep for Six Years

  • Supporting documents for tax returns
  • Accident reports and claims
  • Medical bills (if tax-related)
  • Property records/improvement receipts
  • Sales receipts
  • Wage garnishments
  • Other tax-related bills

Forever

Personal Records to Keep Forever

  • CPA audit reports
  • Legal records
  • Important correspondence
  • Income tax returns
  • Income tax payment checks
  • Investment trade confirmations
  • Retirement and pension records

Special Circumstances

How Long to Keep Personal Documents in Special Circumstances

  • Car records (keep until the car is sold)
  • Credit card receipts (keep until verified on your statement)
  • Insurance policies (keep for the life of the policy)
  • Mortgages/deeds/leases (keep six years beyond the agreement)
  • Property records/improvement receipts (keep until property sold)
  • Sales receipts (keep for life of the warranty)
  • Stock and bond records (keep for six years beyond sale date)
  • Warranties and instructions (keep for the life of the product)
  • Other bills (keep until payment is verified on the next bill)
  • Depreciation schedules and other capital asset records (keep for three years after the tax life of the asset)