Itemizing or Standard Deduction

Most taxpayers claim the standard deduction when they file a federal tax return, but some filers could lower their tax bill by itemizing. Here are some tips as you try to help your client file an accurate and advantageous tax return.

Figuring Itemized Deductions: Add up deductible expenses the client paid during the year, which include but are not limited to home mortgage interest, state and local income or sales taxes, gifts to charities, unreimbursed medical expenses and many more.

For full details on itemized deductions, limitations and special rules, please visit:

Know the Standard Deduction: If the client does not itemize, the standard deduction depends on their filing status. For 2016, if the taxpayer is:

Single: $6,300

Married Filing Jointly: $12,600

Head of Household: $9,300

Married Filing Separately: $6,300

Qualifying Widow(er): $12,600

To fill out a Schedule A, or itemized deductions, on Taxware Systems’ software, go to 1040 Line Input, line [40] or Forms and Schedules Schedule A at the top of the alphabetical list. Once inside the schedule A, fill in the amounts needed within the headers provided. If you have a grey box that cannot be filled in, that generally means that the amount is carried from somewhere else on the return.

After you have completed the Schedule A, click OK to save and the program will automatically calculate the amount for you. In this way, you can help your client choose the option that is right for them.

If you have questions, please feel free to contact us!


Tax Time Tips

For us in the tax industry, January through April can be hectic. We at Taxware Systems want to help you have a smooth tax season. Here are some tips to help you and your clients file returns quickly and efficiently.

Gather Records: Before their tax appointments, remind your clients to bring in all applicable records for the year, including receipts, tips and records pertaining to deductions and tax credits claimed. If they purchased health insurance or received it from their employer, your client should receive a 1095-A, 1095-B or C.

Report All Income: The client will need to report all income from Forms W-2, wage and tax statements, tips if applicable, Forms 1099 and any other income, even if they do not receive a statement. If a form that affects income is missing, the IRS will notify the client of the error.

Use Direct Deposit and e-File: When possible, suggest to the client to use direct deposit combined with e-file. It is a fast, accurate and secure way to get a refund. With direct deposit, the IRS issues nine out of ten refunds in less than 21 days.

Weigh Filing Options: If your client asks about whether the standard deduction or itemizing is better for them, show them both plans thoroughly as applicable to their tax return. We also have a comparison tool in the Taxware Systems software that allows you to compare whether filing a joint return or a married filing separate return would be more advantageous for the client.

Review the Return: Mistakes on a return can slow down a refund. In the Taxware Systems software, any errors picked up by the validity check will be indicated in red or yellow and will be in list form. Red means that the return is likely to reject because of errors that will be tagged by the IRS, such as errors in basic information. Yellow indicates that there are warnings you should probably look into, but may not be immediately rejected, such as missing preparer or state information.

Questions? Feel free to contact us!


Common Tax Mistakes

January through April can be a stressful time for us in the tax industry. We want tax returns to be done quickly and efficiently, but each return has its own complexities. To reduce stress and help tax professionals, here’s a quick guide to the most common errors on a tax return and how to avoid them using Taxware Systems’ software.

Social Security Numbers and Names: Some of the most common errors in a tax return are missing or wrong social security numbers and names. In the Taxware Systems programs, if a social security number is missing or does not have enough digits, the validity check on the Summary Menu will be red. That means that something in the basic information is incorrect, and the return will most likely be rejected. Make sure that the social security number and name on your client’s tax return matches exactly what is on the social security card.

Filing Status Errors: Another common error can be a filing status error; filing as head of household instead of single, for example. In the software, the filing statuses can be found under Basic Information Line [03]. If the filing status needs to be changed, click on the grey box with three dots next to the status and you will see the full list of options. Select the correct status by double clicking on it.

Math Errors: Most of the calculations are automatic with the Taxware Systems programs, but do make sure that the amounts you type in match the forms that your client provides.

Credits and Deductions: Many errors come about because of Earned Income Tax Credit, the standard deduction and the more complex credits. If you do need to fill out credits such as the EITC, Child Tax Credit or American Opportunity Credit, certain questions marked in red must be answered in the new due diligence found on the top left hand side of the 1040 line input. If the status of “Standard Deduction OK” needs to be changed, go to Line [25] Special Filing Categories and click on the grey box with three dots and double click on the status you need.

Note: If a return is rejected, correct the problem and transmit the return again. If a return has already been accepted with an error present, the IRS will correct simple math errors or notify you of a missing form. If there is a larger error, such as a filing status or a missing W-2, you will need to prepare an amended return.

If you have questions, feel free to contact us!