As April 15 draws closer, local taxpayers directed questions about their returns to an annual panel of accountants hosted by The Buffalo News.
Eleven volunteers answered questions via phone and computer over a four-hour period on Tuesday, offering free advice. The New York State Society of Certified Public Accountants coordinates the panel.
Taxpayers took advantage of the opportunity, asking about everything from student loans and dependents to deductions and income tax rates.
A questioner named John said he owed $3,300 to the IRS but can only afford to pay $2,000. What to do?
Mark Janulewicz, a partner at Lumsden & McCormick CPAs, advised him to pay the IRS as much as possible; the filer will still accrue interest and penalties until the amount is paid in full, but he can also use a special form – 9465 – to get organized.
“It puts you on a monthly payment plan,” Janulewicz said. “It avoids you any nasty notices, also.”
Joe Kabacinski, an assistant professor of accounting at D’Youville College, was asked about a home-office deduction for a man who uses a computer to work from an apartment that he rents.
If that residence is his primary place of business, and he is an employee of a company that does not provide him an office, then he should be able to get the deduction, Kabacinski said. “If he is self-employed, then he certainly would be able to take the deduction.”
This was Kabacinski’s fifth year as a volunteer on the panel. “People get paralyzed when they think about having to do their taxes, and it can be pretty onerous, so we’re doing a pretty vital service here.”
Another person asked if it taxes have to be paid on the sale of a home. Someone single who owns the home and has lived in it for at least two out of the last five years, doesn’t have to pay tax on anything up to a $250,000 gain, “which is quite liberal for an area like this,” Kabacinski said. Those who are married and filing jointly can exclude a gain of up to $500,000 gain, “so you can exclude quite a bit of gain.”
Some of the questions were straightforward, while others were more-complex topics that sent the accountants to their reference materials. “It keeps you on your toes,” Kabacinski said.
Rosemarie Steeb, principal with Chiampou, Travis, Beesaw & Kersher LLP, sent out tips on The News’ website about some “overlooked deductions.”
For instance, if you are able to itemize your deductions, and you volunteer for a qualifying charity, the expenses you incur as part of those volunteer efforts are deductible, she said. An example: the expense of driving to and from board meetings for a group you volunteer for.
Someone asked Steeb how many years of tax returns must be kept. Her reply: the statute of limitations is three years, but the IRS suggests keeping records for seven years. “If a fraudulent return is filed, there is no statute of limitations,” she said.
Tim Hoelscher, owner of Timothy J. Hoelscher CPA, who coordinates the accountants society’s panel, said he received a few questions related to what happens when a family member dies, such as IRA distributions and how to handle cancelation of debt.
Also volunteering for the panel were: Peter Bellanti, senior tax manager, Amato, Fox & Co. PC; David Lever, supervising senior accountant, Tronconi, Segarra and Associates; Bruce Zgoda, owner of Bruce M. Zgoda CPA; Dennis and Jane Jewell, partners at Jewell & Disimone CPAs; Todd Zgoda, tax manager, Bruce M. Zgoda CPA; and Christine Learman, owner, Christine A. Learman, CPA.
Separately, Daemen College is offering low- and middle-income families free income tax assistance in their neighborhoods through the “Income TAXi,” staffed by trained Daemen accounting students.
The service will be available 10 a.m. to 2 p.m. at the Eden Library on March 22; the Cantalician Center on March 29; the Schiller Park Senior Center on April 5; and state Sen. Tim Kennedy’s office, 2239 S. Park Ave. in Buffalo on April 12. Appointments are recommended by call 211, the region’s human services information and referral number.