The following blog entry was contributed by: Albert Spenadel, CPA, MST, owner of Spenadel Tax and Accounting Services. He can be reached at alspenadelcpa@comcast.net.

Now that you have paid your taxes, you might be thinking about how to pay less of them when next April arrives in 2013.

How do you do that?  Who do you turn to for solid financial advice? 

First, if you like your accountant, ask him or her for a recommendation to a financial planner.  A good financial planner takes the time to listen to you and customizes a financial plan to fit your needs.  Certified financial planners, designated with the acronym CFP, have taken a series of tests and are credentialed to help you with your plan.  Some financial planners do not sell investment products, but others do offer investment choices.  The author prefers financial planners who do not offer specific investments, because they are typically can offer independent advice.  Although the author knows some fine financial planners who do offer investments, the mere fact that they offer specific investments is an inherent conflict of interest.  They might steer you to investments that may not be tailored for you that they get a fee for managing your assets.  Keep this in mind while choosing a financial planner.  Be sure to review your plan at least annually with your planner to see if it is on-track, needs tweaking or a complete overhaul.

You may want to select an investment broker the same way you chose a financial planner.  Ask your accountant first, before asking your relatives, friends or neighbors.  Why?  Your accountant typically sees the statements from the broker when filing his clients’ tax returns.
 

Here is an inside scoop:  

Accountants get inundated with requests from brokers to refer business to them.  The author, a CPA, only refers clients to brokers who have a proven track record with clients.  However, unless you ask, you cannot see the brokerage statements for your relatives, friends or neighbors.  If you ask, you might be considered being rude or obnoxious, because financial information is strictly confidential.

So far we have assumed here that you have an accountant that you trust.  What if you do not?  How do you find a good one?  Of course, you can ask your relative, friend or neighbor again.  Just because they have a CPA, Certified Public Accountant, by their name does not make them the right accountant for you.  However, you do have a much better alternative.  Simply go to your local chamber of commerce website, such as the WPBCC.  See which accountants in your community are members of your local chamber.  Talk to local business owners to see who they use.  Then, set up an appointment to meet them.  Be careful of accountants who demand a fee upfront for meeting with you.  On the other hand, do not be obnoxious and pick the accountant’s brain too much for specific advice if you are shopping for a new one.  General questions such as fees and general services offered are certainly acceptable questions to ask at the initial consultation.

All of your financial team members should have your best interests at heart first.  If they do a good job for you, pay them well.  This leads to the desired “Win-Win” scenario. 

The following blog entry was contributed by: Albert Spenadel, CPA, MST, owner of Spenadel Tax and Accounting Services. He can be reached at alspenadelcpa@comcast.net.

The filing deadline of April 17 is almost upon us.  Here are few tips to avoid the last minute panic.

1. Review your prior year return. (2010)  Look and see what W-2s, 1099s and Mortgage Interest Form 1098s that you need.  See if you filing status or sources of income have changed.

2. If you use an outside CPA, attorney or tax preparer to prepare your return, ask for an organizer.  It lists all the forms (W-2s, 1099s, etc.) that you had last year.

3. If you are self-employed or have a rental property, using a computer program such as Quicken can easily track and categorize your income and expenses.

4. If you have stock, bond or other investments, be sure you have the most recent 1099 issued.  Most of the time an original 1099 is issued by a brokerage house, but then a second or even third “Corrected 1099” is issued. Watch the dates on the statements. Keep a separate folder for these 1099s.

5. If you own stock in an S-Corporation or LLC, are a partner in a partnership or a beneficiary in a trust, make sure you have all the Schedule K-1s before preparing your return.

6. Keep track of your deductions, such as charitable contributions with donation letters from charitable organizations and out-of-pocket, or unreimbursed medical expenses.  Don’t forget your real estate tax bills, if not paid out of escrow with your mortgage.

7. If you use your car for business, be sure to keep a daily log, or at least a calendar, that you can track your business mileage.  Keep all receipts for business expenses as backup.  For each type of expense, use a manila folder and a small envelope for those small cash register receipts.  Get an annual statement from your credit card company that tracks most of your expenses by category.

8. Make sure you get letters from child care providers for the expenses paid.

9. If you use a tax advisor and are unsure whether an expense can be deducted, bring it to their attention. The worst thing a tax advisor can say is “No.”  Tax advisors are human and not mind readers.

10. Finally, if you will not have all of your information to file your tax return by April 17, 2012, then you can file an extension, Form 4868 and give yourself six months until October 15 to file your tax return.  However, you must pay 100% of your tax due by April 17, so try to make a good faith estimate.  The IRS can disallow an extension if they determine you did not make an attempt to pay, when you knew a big balance due is owed.  For Illinois, you can file the Form 505-I or go online to the Illinois Department of Revenue website and make a payment there.

Given the diversity of Wicker Park and Bucktown, the Illinois Department of Revenue (IDOR) has an important announcement regarding filing of your 2011 tax return for those covered by Illinois Civil Union Law.  If you and your same-sex partner are in a civil union, you must file either “Married Jointly”  or “Married Separately” even though this is not allowed by Federal tax law.  You will also not be able to E-file your Illinois Form IL-1040 tax return.  Instead, those taxpayers in a civil union will have to mail their tax return to the IDOR.  This will delay any refund, which still can be direct deposited, because E-filing speeds up receiving your Illinois refund.