Before you file away your tax return and all its related records, now is the time to make a final review of the material. This can be in either paper or digital form as long as you know where it is, it's securely stored, and you feel it will meet the requirements of substantiation. Here are some tips:​

The checklist

Use this checklist to help your record keeping. At a minimum, your records should include the following;

• A copy of your signed tax return and all supporting documents sent with your tax filing
• Copies of any worksheets that support your tax filing
• Canceled checks of deducted items
• Record of digital payment(s) and timing if using electronic payment systems
• Receipts supporting deducted items
• Bank statements
• Investment statements
• Form W-2s
• Form 1099s (all form types)
• Form 1095s (to support having valid health insurance)
• Mortgage statements (including annual interest paid and Form 1098)
• Form K-1 for partnerships, LLCs, or S Corporations
• Credit card statements
• Copies of any major purchases or sales (example: home closing documentation)
• Mileage logs for business, charitable and medical transportation
• Proper documentation for business meals and cell phone use
• Receipts for any charitable donations (both cash and non-cash donations)
• Support for all your itemized deductions
• Child care receipts and reporting
• Educational expenses
• Substantiation for value of large donations of property
• Proof of fair market value for any inherited items of value

Capital improvements
Now is also a good time to review your capital improvement files. Capital improvements are payments made to improve the value of your home, secondary residence, or other high value property/equipment. These records are needed to support your calculation of value and gain/loss when you sell your property. Consider creating a spreadsheet that recaps each of these expenditures.

When to toss
Don’t toss old records too soon. The typical rule is to retain federal tax records for as long as they may be needed. This is usually the later of 3 years after the filing due date or when you actually file your tax return. But be careful, state rules can differ and if your income is understated by more than 25%, the look back timeframe for a potential audit increases to 6 years. Finally, remember to keep records of fixed assets as long as you own them plus three years



"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.  
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA;  Janice Papais, CPA

Most of us go through life without being concerned with, or ever checking on, our Social Security records. We assume the money deducted each payday and an equal amount paid in by our employer is applied properly to this valuable retirement benefit.​

Ignoring is problematic
The Social Security Administration (SSA) is being inundated with fraudulent W-2s and 1099s, and doesn't have the ability to catch them all. This is creating a high degree of reporting errors, even when a tax return is not filed by identity thieves! In addition, the SSA and your employer occasionally have their own errors. Unfortunately, the only way these problems are caught is if YOU catch them. Waiting until retirement may be too late to correct an error made 10 or 20 years back. Common problems created by these errors and their impact are:
Incorrect amounts. If the SSA does not receive a W-2 wage statement from an employer, you will not see credit for these earnings. Since your Social Security retirement check amount averages your lifetime earnings, if you have earnings that are missing, your retirement check will be permanently lower!

Missing the correct length of time. In addition to receiving credit for earnings, you also need to work 40 quarters or 10 years to be fully eligible for retirement benefits. These missing earnings reports reduce your number of working quarters. Mess up here and you may not qualify for benefits at all!

The three-year correction time limit. Per the SSA, an earnings record can be corrected at any time up to three years, three months, and 15 days after the year in which the wages were paid or the self-employment income was derived. While there are exceptions for fraud and obvious clerical errors, why risk the hassle by not finding errors and fixing them when they happen?
Action to take
Thankfully, it is now easier to confirm the accuracy of your account by going to www.ssa.gov and using the SSA's online tool that allows you to review your historic earnings statements.
To use the tool, you will need to go through a signup process that includes many safety measures to ensure your identity is protected. This is usually done using a tool called ID.me and will require a valid ID and a way to take a photo of yourself and your ID.

Once you log in, review your statement for any errors. If you see an error, takes steps to immediately correct it. You can do this by contacting the SSA:
Telephone:
1.800.772.1213
By mail:
Social Security Administration Office of Earnings Operations
PO Box 33026
Baltimore, MD 21290-3026
Since you may have just completed last year's tax filing, now is a great time to get in the habit of reviewing your Social Security records. It is your future.


"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.  
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA;  Janice Papais, CPA

Please note: These age triggers outline some of the major tax events that relate to your age. In most cases the impacted year is the year you turn the age on this chart. Example: If your qualified dependent turns 17 any time during the year, they no longer qualify for the Child Tax Credit. This chart is not meant to be all-inclusive and there are exceptions to some of these age qualifications. Use this information to know when to ask for help.​

Action step: When you or anyone in your family approaches any of the ages in this chart, it's a sure sign you need to spend some time understanding the tax implications of the age event. Call if this impacts you!


"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.  
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA;  Janice Papais, CPA

Before you close this year's tax file there is still some work to do. If the IRS or state revenue department selects your return for review, you will need to be prepared. Here is what you need to do now:

1. Keep a copy of your Form 1040 indefinitely. Do not toss or destroy any of your 1040s. You may need them to correct historic Social Security earnings statements or to prove that you filed a tax return.
2. Supporting documents need to be retained for three years. Records to support your tax return (i.e., W-2s, 1099s, K-1s, receipts, canceled checks, bank statements and mileage logs) should be kept for a minimum of three years from the later of the tax filing due date, the date you filed your taxes, or the date you paid your tax in full. This approach ensures that your records are available for a potential IRS audit.
3. Property and investment records need to be held longer. To prove your cost basis and taxable gain or loss, all records relating to property that you own (your home, rental properties, stocks, bonds and other investments) need to be kept for at least three years after it's sold or disposed.
4. Be mindful of other record retention requirements. The three-year period is the federal guidance for standard returns. There are other factors that should be considered, including:

• State record retention requirements (often six months to one year longer)
• Requirements for insurance, banking, or estate management
• Additional federal requirements for tax returns including unreported income (six years), worthless securities (seven years) or bad debt (seven years)
• No audit time limit for fraudulent returns

A specific filing system is not required, but organization is key. The ability to easily find your documents in the event of an audit will make the process much simpler. Here are some tips:

• File records by year rather than income or deduction type.
• Within the file, order your records to match the flow of the Form 1040.
• Consider scanning your files to create a digital file as a backup.
• Create 2025 files now to save documents for the current year.
• Shred old documents; don't just throw them away.


If you are unsure whether to retain or shred something, keep it unless you know the document can be replaced.




"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.  
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA;  Janice Papais, CPA

WASHINGTON —The Internal Revenue Service reminds self-employed individuals, retirees, investors, businesses and corporations that April 15 is the deadline for first quarter estimated tax payments for tax year 2025.​

Because federal income taxes are pay-as-you-go, the law requires individuals who don’t have taxes withheld to pay taxes as their income is received or earned throughout the year. Most people meet their tax obligations by having their taxes deducted from their paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation.

Taxpayers who are self-employed or in the gig economy are generally required to make estimated tax payments. Likewise, retirees, investors and others frequently need to make these payments because a significant portion of their income is not subject to withholding.

When estimating quarterly tax payments, taxpayers should include all forms of earned income, including part-time work, side jobs or the sale of goods or services, commonly reported on Form 1099-K.

Income such as interest, dividends, capital gains, alimony and rental income is normally not subject to withholding. By making quarterly estimated tax payments, taxpayers can avoid penalties and uphold their tax responsibilities.
Certain groups of taxpayers, including farmers and fishers, recent retirees, individuals with disabilities, those receiving irregular income and victims of disasters and terrorist attacks are eligible for exceptions to penalties.

Paying estimated taxes

Taxpayers can rely on Form 1040-ES, Estimated Tax for Individuals, for comprehensive instructions on computing their estimated taxes.

IRS Online Account streamlines the payment process for taxpayers making estimated payments. There, they can make and view their payment history, monitor pending payments and access pertinent tax information.

 Taxpayers have several options to make an estimated tax payments, by mail or pay online with IRS Direct Pay, debit card, credit card, digital wallet or the Treasury Department's Electronic Federal Tax Payment System.

To pay electronically and for more information on other payment options, visit Make a payment. If paying by check, be sure to make the check payable to the "United States Treasury".

Publication 505, Tax Withholding and Estimated Tax, offers detailed information for individuals navigating dividend or capital gains income, alternative minimum tax or self-employment tax, or who have other special situations.

Tax Withholding Estimator

The IRS recommends taxpayers use the Tax Withholding Estimator tool to accurately determine the appropriate amount of tax to withhold from their paychecks.

Regularly monitoring withheld taxes helps mitigate the risk of underpayment, reducing the likelihood of unexpected tax bills or penalties during tax season. It also allows individuals to adjust withholding upfront, leading to larger paychecks during the year and potentially smaller refunds at tax time.

Online resources

• Watch IRS YouTube videos on Estimated Tax Payments – English | Spanish | ASL.
• gov offers tax assistance 24/7. Get answers to common questions and access online tools and information, such as the Interactive Tax Assistant, Tax Topics and Frequently Asked Questions.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.  
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA;  Janice Papais, CPA

As the payment alternatives continue to evolve in the economy, so too are the payment options available to you to pay your tax bill. Here is what's available to you this tax filing season along with each option's related costs.​

Various payment methods to pay taxes

1. Electronic funds withdrawal. This comes out of the checking or savings account noted on your 1040 tax return. There is no charge for this service.
2. Send in a check. Use an IRS voucher for this. Write your check out to the U.S. Treasury and send it via certified mail.
3. Pay with a credit card. The IRS provides two vendors (called merchant banks) for this service: Pay1040 and ACI Payments. There is an interchange rate charged to you ranging from 1.75% to 1.85% with a minimum fee of $2.50.
4. Pay with a debit card. Again there are various services that provide this with a fee of $2.10 to $2.15.
5. Pay by digital wallet or cash. This usually involves a $1.50 fee
6. Drop off cash payment, including to one of 60,000 locations. Yes, you can still bring in your tax payment to designated locations and pay in cash. If this is the option you take, you will need an appointment. Details can be found here.
Available payment suppliers
Debit/Credit: Visa, Mastercard, Discover, American Express, Star, Pulse, NCYE, ACCEL, AFFN, Cirrus, Interlink, Jeanie, Shazam, Maestro
Digital Wallet: Click to Pay, PayPal, Venmo
Cash: Vanilla Direct

Interesting notes

• If you have an online IRS account, you can make payments within this secure setting.
• IRS offices still allow for walk up payments in cash. Just make sure you have an appointment and follow online instructions.
• There are limits to the number of credit card transactions you can make in a year. You also need to get approvals if you think payments may exceed $100,000.
• If you find you cannot pay your taxes, there are also installment payment plans.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.  
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA;  Janice Papais, CPA

Here are seven tax topics that seem innocent but can cause problems if not handled correctly.
1. Gambling winnings. If you receive a tax form at a casino for your winnings, that information is sent to the tax authorities. Since the form typically only contains the amount you won, save copies and records of any gambling losses.
2. Maturing CDs. Be careful with maturing CD’s in a retirement account that are rolled over into new CDs. Normally it is straight forward and the interest is reported on a 1099-INT. However, with increasing interest rates, many are once again using CD's in retirement accounts. So pay attention as your financial institution may provide you with tax forms showing the maturing CD as a distribution, but not report it as a rollover. You will need to account for this on your tax return. In this case, there is not a taxable event, but the IRS may think there is!
3. Retirement distributions. Make note of any distributions from your retirement accounts and note the type of account. You should receive Form 1099s for the distributions. Depending on your age and the type of retirement account, a number of tax surprises could occur if not properly recorded. This includes early withdrawal penalties, potential required minimum distribution penalties, and income tax on the withdrawals.
4. Gifts over $18,000. If you provide gifts in excess of $18,000 ($36,000 for a couple) to any one person during the year, you must fill out a gift tax return.
5. Contemporaneous documentation. The time to put together proper documentation to support your deductions is when the activity takes place. For example, if you misplace a receipt for a charitable donation, you can go back to the organization and ask for a copy of the old receipt, but a new receipt to replace the one you lost is not valid documentation. Common areas where this is important are with charitable contributions, mileage logs, and other itemized deductions.
6. Unemployment income. Unless specifically excluded by the federal government, unemployment income is taxable. Many taxpayers become surprised by an unwanted tax bill if federal withholdings are not taken out of these payments.
7. Digital assets. If you have any transactions during the year using digital assets (cryptocurrency), you have a taxable event. This is because digital assets are seen as property in the eyes of the IRS. This means long and short term capital gains come into play. And if you use digital assets to purchase other capital goods, then you have two potential taxable transactions!

The requirement to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) is now not to be actively enforced or fined per recent announcements from the US Treasury and FinCEN.
Background
The Corporate Transparency Act requires most small businesses to file a report on FinCEN.gov to report their owners with confirmed identification, or face substantial fines and penalties. There are approximately 20 exceptions to this rule, but basically if you filed business organizational documents with a state entity you probably need to file the form.
Almost as soon as the law was enacted, it began facing numerous legal challenges. The filing deadline was delayed, then re-enacted, then delayed again. Those supporting the rule believe the filings will help law enforcement more readily identify fake companies and bad players. Those against the requirement consider it government overreach and believe the information can be found elsewhere.
Current Situation
Both FinCEN and the Treasury Department say they will no longer enforce the law, nor impose penalties for any firm that does not meet the current March 21st filing deadline. Does this mean the law is dead? Not technically, as the law is not rescinded. It is just not being enforced.
What to do now

• If you have not filed your BOI form at www.fincen.gov, you will not be penalized or forced to do so at this time.
• If you wish to file your report, the site is still available and your report may be filed.
• Since the law is still in place, the requirements, penalties and fines may be reinstated. The likelihood of this happening during the current administration is remote at best.
• FinCEN will still be modifying requirements to try and identify questionable businesses, so there may be announcements in the future.

If you are interested, here is a link to the announcement from the Treasury Department.

While more and more legislation is introduced that penalizes all of us for doing things wrong on our tax returns, please remember that at its origin, tax collection in the U.S. is voluntary. In other words, the tax code is defined, we are given due dates, and the government asks us to voluntarily comply.
When you don’t, there are late filing penalties, underpayment penalties, fines, fees, interest and other imposed compliance incentives including audits. To help guide Congress and the Treasury Department, there are ongoing studies conducted to try to calculate the trends in non-compliance.
The Tax Gap
The result of this research is an estimate known as the Tax Gap. As you can imagine, calculating this Tax Gap is made very complicated due to the complex nature of the tax code. Here is the IRS’s most recent Tax Gap projection.
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