Do It Yourself Tax Research

These days, it seems everyone is into the “do it yourself” mode. Whether it’s doing your own legal work or adding on to the house, it seems there are resources to help any do it yourselfer achieve his or her goal. This month, we’re going to look into do it yourself tax research. The object is not to keep you from calling your CPA if you have a question, rather it’s to empower you to make your discussions with a CPA more productive. This article is intended to give you a list of resources when you have tax questions.

Government Websites

Believe it or not, one of the best places to go for tax information is to the taxing authorities. Most, if not all, taxing authorities have fairly informative websites. The following links will take you to the major government websites.

Internal Revenue Service – No matter what you think about the Internal Revenue Service, the fact is it has a fairly informative website. Of course, you will find all the necessary tax forms you may need at the site, but there is also a wealth of information available to answer many of your questions. The following links are of particular interest.

• In addition to forms, IRS publications assist the taxpayer in understanding tax law. Whether you need to know about employment taxes or how to depreciate your new computer, you can find answers in IRS publications.
• The IRS website has a section devoted entirely to individual taxpayers. This section of the helps you determine how much you should withhold from your paycheck for taxes, how to get a copy of a past return and an abundance of other information. There are sections devoted entirely to farmers, international taxpayers, military personnel, parents, the self-employed, seniors and retirees, and students. Most importantly, the site contains the portion of the law describing your rights as a taxpayer.
• If you are a small business owner, the IRS website has a section devoted entirely to businesses. Here you can find answers to most of your questions. The form in which you do business doesn’t matter. Whether you are self-employed, in a partnership or operate as a corporation, information in this section can get you headed in the right direction.
• One of the more useful sites for individuals is the area devoted to charities and non-profits. Not only does this section provide valuable information for charitable organizations, but it also provides a way to determine if donations to a particular organization are deductible.
• If your tastes spread to reading, regulations and other IRS pronouncements, this site is also for you. Unless you really need something to cure insomnia, though, you should probably skip this section.

AICPA – The American Institute of Certified Public Accountants is not a governmental organization, but its website has a comprehensive list of state departments of revenue. It should come as no surprise that state tax laws do not always follow federal laws and regulations. For that reason, it is wise to check your state’s department of revenue for information on tax issues. For example, the maximum amount of equipment you can elect to expense for federal purposes is $108,000. However, Arkansas recognizes only a $25,000 deduction. In determining the effects of a purchase on taxable income, state taxes can be significant.

Private Organization Websites

The Tax Foundation – Though not a site for research on specific tax questions, the Tax Foundation’s website offers a wealth of information, including state-by-state tax rates and the tax cost of doing business in a state, updates on current tax legislation and numerous research articles on tax policy.

Webtaxcenter.com – Webtaxcenter.com is a site sponsored by a free e-filing service. Well, sort of free anyway. The site has good information regarding deductions, common mistakes made by taxpayers, tax news, and tax tips. The drawback is that the site pushes its “free” e-filing service, which is a valuable resource for taxpayers with very simple returns, but a disservice to taxpayers with more complicated returns.

Taxsites.com – Taxsites.com is the web address of Tax and Accounting Sites Directory. The directory contains a comprehensive list of tax information to help you answer your tax questions.

This article gives you resources to find your own answers to tax questions without incurring the cost of professional advice. It’s about empowering you so that discussions with your tax adviser can center more on substance rather than a recitation of the rules. While these sites do provide valuable information, remember that electing a tax strategy can affect other facets of your tax and financial picture. For that reason, if you are in the midst of a transaction and want to know how it will affect your taxes, do a little research and then give us the call. Together, we will determine the best course for you to take.

Happy Labor Day!

These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.

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