As tax deadline looms, professionals offer tips

CPA Mary Miller works hard in her office Tuesday at Miller Verchota Inc. in Crystal Lake.
CPA Mary Miller works hard in her office Tuesday at Miller Verchota Inc. in Crystal Lake.

Mary Miller logs a lot of work hours during tax season.

The certified public accountant at Crystal Lake-based Miller Verchota Inc. works between 100 and 110 hours a week for almost three straight months preparing federal and state income tax returns for area residents.

During her more than 12 years as a CPA, she saw someone pay about $500,000 in taxes, while helped another receive more than $19,000.

“We’re crazy people who love what we do,” said Miller, who works alongside her husband at the accounting firm. “The next few weeks are going to be crazy, and people need to be prepared because there isn’t much time left.”

The deadline to file income-tax returns is April 15, and a late start because of the Internal Revenue Service updating its system because of recently approved legislation has residents and tax professionals making a mad dash to the finish.

As the deadline looms, being educated about the filing process could mean the difference between a good or bad experience, area accountants agree. That includes being prepared and well-versed in items residents otherwise might not have known they could claim.

Whether using a tax professional or filing on their own, residents need a plan and should consult a checklist of requirements before beginning the process.

That could start with visiting www.irs.gov, www.revenue.state.il.us or any number of websites for local and big-box accounting agencies.

“You need to have everything ready to go,” Miller said. “Time is of the essence.”

Procrastinating any further also could be detrimental to the process.

“People who suspect they are going to owe tend to put it off,” said Mickey Broman, CPA at Broman & Kosar Ltd. in Crystal Lake. “It’s better to know as early as possible because if you do owe, you know how much and know your options.”

A resident’s knowledge of what he or she can claim on a return also can make a huge difference in the final financial outcome.

One item is the education credit, where filers can receive $2,500.

“Most people think that because a tuition statement comes in their child’s name, they are not capable of taking that credit,” Miller said. “That’s only true if you file as a dependent.”

Residents also are eligible for up to $500 through an energy credit if they made energy-efficiency improvements to their homes.

Other important items include charitable contributions and brokerage statements.

In order to claim charitable donations, residents must have a record of that transaction. For donations of more than $250, an acknowledgment from the charity that also must state that no goods or services were provided in exchange for the donation is required.

Brokerage statements for fees residents may have paid to the brokerage house also may be deductible.

“We try to keep all our customers from owing,” Broman said. “The goal is to make the tax liability and payment as close as possible.”

Forgiveness for credit card debt is also available for residents with a 1099-C form. That also includes some short sales and foreclosures.

“Anyone who gets that form, they need to see a tax professional to see if it is taxable income for them,” Broman said.

Residents earning less than $57,000 a year who don’t need a tax professional to file their taxes can do so for free through the IRS website. Those who feel they need more time also can get a six-month extension, and state returns can be filed at www.tax.illinois.gov.

More and more residents also are filing their own taxes with advancements in online taxing capabilities through companies such as TurboTax and H&R Block, Miller said.

McHenry County College also offers the free Volunteer Income Tax Assistance Clinic for qualified residents earning less than $50,000 a year.

Where to turn for tax tips

• Internal Revenue Service: www.irs.gov

• Illinois Department of Revenue: www.revenue.state.il.us

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