Before Disaster Strikes

In the tax industry, you could say that we have learned to expect the unexpected, especially with tax laws being updated consistently throughout the tax year. What about fires, power outages or even cybercrime? No one knows when disasters will strike, but as a taxpayer and a tax professional, you can be ready to combat problems and keep your important information safe.

Backups: Store paper client data and documents in securely locked areas. Make sure to have strong computer passwords to protect client information and be sure to back up your data daily on an external hard drive or in a cloud storage space in case of disaster such as flood, fire or power outage.

Avoid Scams: Phishing emails can look authentic, and people impersonating reliable agencies might threaten you or your clients into divulging personal information. Stand firm; if you receive an email from someone you are not familiar with, do not click on any links in the email. If you receive a threatening call, hang up immediately.

Document Valuables: Take photos or videos of the contents of your home or business, including equipment and storage areas. These visual records can help prove the value of lost items. They could help with insurance claims or casualty loss deductions on a tax return.

Emergency Plans: How well can your business come back after a disaster? Make sure to have an operations plan in place and review it annually. Just as your business changes over time, so do your preparedness needs. As you add employees or major changes occur, update your plans and inform your people.

For more information on how to prepare in case of disaster, please visit:



Missed the Deadline? Helpful Hints

The tax deadline for most taxpayers was April 18th, 2017. If for some reason your client missed the deadline without filing an extension, here are some helpful hints about what to do next.

File and Pay: For a client who owes tax, let them know they should file and pay as soon and as much as possible to minimize penalties and interest charges.

File Electronically: E-file is the safest, easiest and most accurate way to file a tax return. The IRS will send electronic confirmation when it receives the tax return and issues nine out of ten refunds in less than 21 days.

Installment Agreement: Those who need more time to pay taxes can apply for a direct debit installment agreement, Form 9465. To find that form on the Taxware Systems software, go to the Individual Tax program, Forms and Schedules line [78] Installment Agreement and fill out the information there.

Refunds: File as soon as possible to get a refund. Clients who are not required to file may still get a refund if they had taxes withheld from wages or they qualified for certain credits such as Earned Income Tax Credit. Those who don’t file their return within three years could lose their right to the refund.

If you have questions, feel free to contact us!


What to Do About an IRS Notice or Letter

If a client coming to your office receives a notice or letter from the IRS, your client might come to you for help, and you need to know how to respond. Here are some tips should your clients get a notice from the IRS.

Do NOT Ignore It: In most cases, notices from the agency can be addressed quickly and easily. It is important that the client replies right away if a reply is needed.

 Follow Instructions: Read the notice carefully. It will tell you if the client needs to take action. The notices are usually quite specific about an issue with a tax return or account. The letter should give you the reason for the contact and instructions on how to handle the issue.

Correction Notices: If the IRS has made corrections to your client’s tax return, make sure to review the information provided by the agency and compare it to the original tax return. If the client agrees with the changes and there is no payment owed, there is nothing else that needs to be done. If your client does not agree with the changes, it is important that they respond. Follow the instructions on the notice for the best way to respond to the IRS.

The Premium Tax Credit: The IRS may send a letter asking your client to clarify or verify their Premium Tax Credit information. The letter may ask for a copy of Form 1095-A, a Health Insurance Marketplace Statement. You should follow the instructions on the letter. This will help the agency verify information and issue the appropriate refund.

No Need to Visit: Most notices can be resolved without visiting the IRS in person. If questions arise, call the phone number provided on the notice. Have a copy of the tax return and the notice when you call. Also, make sure to keep a copy of the notice along with the client’s tax records.

Watch Out for Scams: Don’t be fooled by people claiming to be the IRS through calls or emails; the IRS will contact you through postal mail first, not by phone. Be aware that the IRS does not initiate contact with taxpayers through email, text or social media.

 For more tips and information about notices, please visit



Mid-Season Tax Tips

We are consistently busy in the tax industry, and as a tax professional, just as you get over one hurdle you are prepping for another. April 18th will be here before long, but don’t be caught unawares. Here are some tips to help you wrap up a successful season.

Keep Records Safe: Store client data, paper tax returns and supporting documents in securely locked areas. Make sure to also have strong computer passwords to protect client information and be sure to back up your data daily on an external hard drive in case of disaster such as flood, fire or power outage.

Stay Informed: Here at Taxware Systems we want to make sure our clients are informed and up-to-date, not just with our software but with the tax industry in general. After tax season ends, we suggest checking emails, program updates and the IRS website for important information throughout the off season.

Deadlines: While the business returns and extensions deadline passed on March 15th, there is still time to prepare for the individual extensions by April 18th. Remind your clients not to wait until last minute to file and to bring all applicable documentation to their tax appointment.

Extensions: Make sure to file individual extensions by April 18th. If a payment needs to be made with the extension, you can do that by going to Forms and Schedules and filling out [29] Form 4868. Keep in mind that extensions allow the client more time to file, not time to pay. An extension will allow six months for the client to file.

Questions? Feel free to contact us!


Top Taxware Questions Answered

At Taxware Systems, we want to help you get tax returns processed quickly and efficiently. Here are the top questions we’ve received during tax season and their answers.

Q: The 8863 amount is not appearing on the 1040! What’s going on?

A: The IRS has added new due diligence requirements recently, not just for Earned Income Credit but also for the American Opportunity Credit and Child Tax credits. The new due diligence can be found in the top left hand corner of the 1040 Line Input, line [03] Due Diligence with a red X if it is required. The questions that need to be answered will be in red. Once the questions are filled out, the box will have a green check mark if the client qualifies.

Q: How do I delete a form?

A: To delete a form that you do not need, simply go to Forms and Schedules and click [88] Clear Forms. Double click on the form that you do not need and it will disappear from the list.

Q: How do I e-File?

A: If you are using the A2A system, our standard way of e-filing, you can do that by clicking on [20] E-File in the Summary Menu. Then go to [02] Print 8879. After the 8879 is printed, the A2A E-File button will light up. Click on the button and a prompt will ask if you want to transmit. Click yes and that is all you need to do. You can check the status of the return by clicking on line [10] ELF Tracker from the main menu.

Q: When I make a change to my preparer or ERO information, it doesn’t reflect on the tax return…

A: Preparer and ERO information are set up outside of your tax returns and are often set up as defaults. To reflect a change made in the ERO or preparer information after starting a tax return, simply re-select the ERO or preparer on lines [04] and [05] of the basic information for that return.

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


Tax Time Tips Part II

In the midst of tax season, we in the industry are hard at work trying to get returns filed quickly and correctly. Here are some hints to help you and your clients even after they walk out the door.

Where’s My Refund: The “Where’s My Refund” tool, found on the IRS website, is a quick and easy way for taxpayers to check the status of their refund after they have filed. Note: “Where’s My Refund” is updated every 24 hours, usually overnight. To find out the status of a refund, please visit:

Don’t Delay: Remind your clients not to wait until last minute to file. If the client rushes in just before the deadline, they could forget an important form or make mistakes that could delay a refund.

File an Extension: If a client is not ready to file by the April due date, you can help them by filing an extension. Note: Filing an extension will give your client more time to file, not more time to pay taxes owed. For individuals, if your client owes taxes and wants an extension, make sure to e-file or mail a Form 4868 with a payment by the April deadline.

Health Care: To reconcile advance payments for the Premium Tax Credit and health care from the Marketplace, the client will need to fill out a Form 8962. A Form 1095-A from the Marketplace will help them complete that form. Filing a return without reconciling payments may affect future payments.

If you have questions, feel free to contact us!


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!


A Guide to Amended Tax Returns

Whether a taxpayer has minor or major changes to a tax return that has already been filed, fixing the return can be complicated. Taxware Systems is here to help. Here is a quick guide to help you create an amended return using our software.

First, here are a few things you need to know:

When to Amend: You should amend a tax return when you need to correct a filing status, add or remove dependents or change total income. Another reason to amend would be to claim deductions or tax credits that you missed on the original tax return.

When NOT to Amend: Sometimes you do not need to amend the tax return. The IRS will correct some mistakes, such as math errors, for you. If you forgot a required form or schedule, the IRS will send you a notice about the missing forms.

Form 1040X: Use a Form 1040X to amend a tax return that has already been filed. The 1040X has three columns. Column one should have the amounts from the original return, column two should have the increases or decreases (changes) that you are making to the return, and column three should have the corrected amounts. Make sure to explain the reasons for the changes on the back of the form.

To learn more about amended returns, please visit

When you are ready to amend a return with the Taxware Systems software, pick the return from the Recall Current list and go to the Summary Menu. On the right hand side of the page, click on the [23] 1040X Amended button and instructions will appear.

Before you amend the return, make sure that the current data matches the return at the time it was originally filed. Once that has been verified, click on Save Current as Original. Then, make the necessary changes to the return. After the return has been adjusted, return to the amended instructions and click on Calculate/Adjust/Explain to write notes about the changes made on the return. Finally, print the 1040X. Note: An amended return cannot be electronically filed. You must file the return on paper.

Questions? Email or call us at