Increasingly, tax professionals are being targeted by identity thieves. Outlined below are a series of “best practices” that Keystone Tax Solutions recommends preparers using the software implement to protect their computers and the client data stored on them. Run a single, reputable security package; but, do NOT assume it will be enough…

Issue Number:    IRS Protect Your Clients Tax Tip Number 1 Due to the sensitive client data held by tax professionals, cybercriminals increasingly target the tax preparation community. Thieves use a variety of tactics, from remote computer takeovers to phishing scams. The IRS, state tax agencies and the private-sector tax industry ask…

Community property laws apply to married individuals living in community property states who file separate federal tax returns.  Each spouse must report half of combined community income and deductions in addition to his or her separate income and deductions.  For example, each spouse reports half of their own W-2 wages…

The IRS requires that all paid preparer information is included on every return prepared for compensation.  To ensure that the correct firm and preparer information prints on the bottom of the second page of Form 1040, you must enter a Preparer Code.  If you need to change the preparer code…

Depletion is the using up of natural resources by  mining, drilling, quarrying stone, or cutting timber. The depletion deduction allows an owner or operator to account for the reduction of a product’s reserves. There are two ways of figuring depletion: cost depletion and percentage depletion. For mineral property, you generally…

Form 1099-SA is provided to a taxpayer that has received certain distributions from a Health Savings Account, Archer Medical Savings Account or Medical Savings Account. These payments should be addressed when filing the tax return and may be subject to taxation. The following items are reported on a Form 1099-SA:…

Household Income Below Filing Threshold A taxpayer is exempt from the requirement to have minimum essential health care coverage and is not subject to the Shared Responsibility Payment if either their Household Income or their Adjusted Gross Income is deemed below the filing threshold for their applicable filing status. For…

The exchange of property for the same kind of property is the most common type of nontaxable exchange.  To be a like-kind exchange, the property traded and the property received must be both a qualifying property and like-kind property.  Additional requirements apply to exchanges in which the property received is…

If You Are E-Filing the Tax Return From the Main Menu of the Tax Return (Form 1040) select: Mark the Return Electronic Direct Deposit Input the Routing Transit Number (RTN), Account Number, the Type of Account, and the Bank Name. (To reduce the possibility of an error, you will be prompted to enter the…

Select the Tax Returns Menu from the Main Menu of the program.  This screen will provide you the option to create a new return or edit an existing return. To create a new tax return, enter the Social Security Number of the taxpayer and press the < ENTER > key.  The program will guide you through entering…