We Prepare Tax Returns!

We prepare most type of tax returns:

Individual. 

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

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Client Testimonials

I used Gary’s services to file my 2012 income tax return. This was my first year having an accountant do my return, as I have always done it myself using TurboTax. However, this year I had cancelled debt from my old primary residence which I was forced to convert to a rental property after relocating out of state.

While it didn’t cost me anything to do the short sale, the income tax consequence from the cancelled debt, roughly $50,000 in my case, was enough to move me from the 15% tax bracket to the 25% tax bracket.  Needless to say, I was concerned about that.

Finances were already tight and my husband and I are expecting our first child this fall. So the possibility of owing income tax was stressing me out. However, Gary was great at relieving my fears.

He is extremely knowledgeable, answered all my questions and was very thorough. I knew I was in good hands. He kept in constant contact with me throughout the process, keeping me updated on the progress of my return and letting me know what paperwork he needed to complete my filing.

In my mind, best case scenario would have been to not owe any taxes. Second best would be to only owe a little. Well, you can imagine my surprise and delight when Gary told me I was actually due a refund of a little over $2,700.00!

To top it all off, I found Gary’s fee for service to be fair, competitive and affordable; especially given the complexity of this type of return. I am so glad I did not try and go it alone this year. I am extremely pleased with Gary’s service and would recommend him highly to anyone, in fact I already have. If you have cancelled debt from a short sale or foreclosure, don’t freak out. Take a deep breath and call or email Gary. I am grateful I did.

Angie Falke of Holiday, FL

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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CPA Tax Preparer comments on Standard Deduction vs. Itemized Deductions | Schedule A of Form 1040

CPA Wilmington NC discusses Form 1040 tax preparation

Gary Bode, CPA: the IRS inadvertently made this issue more complex by expanding the Standard Deduction. If you wander out of your comfort zone during tax preparation, consider giving us a call for a free initial consult at 399-2705.

During Form 1040 tax preparation, you can choose to use the IRS Standard Deduction or your Itemized Deduction (as prepared on Schedule A). Which ever allows you the highest deduction. With lots of IRS conditions and exceptions of course. For example, some folks, like non-resident aliens, can’t use the Standard Deduction. But we’ve never found anyone who willingly wants to use their Itemized Deduction if it is less than the Standard Deduction!

Most CPA tax preparers complete Schedule A for Itemized Deductions, just to see if that exceeds your Standard Deduction. Why? Because Schedule A has multiple sections, each with its own rules.  It’s a little hard to eyeball sometimes, even for CPAs. And the IRS recently expanded the Standard Deduction, further complicating things. One rule of thumb, younger folks with mortgage interest expense, and, older folks with high medical expenses usually benefit from preparing Schedule A. Per the IRS: whether to itemize deductions on your tax return depends on how much you spent on certain expenses last year. Money paid for medical care, mortgage interest, taxes, charitable contributions, casualty losses and miscellaneous deductions can cut your taxes. If the total amount spent on those categories is more than your standard deduction, you can usually benefit by itemizing. Good news, your Itemized Deductions no longer phase out as your Adjusted Gross Income increases.

By trying to give more taxpayers breaks, the IRS made tax preparation more confusing.  If you wander out of your comfort zone during Schedule A preparation, give us a call for a gratis initial consult.  We’re a CPA firm in Wilmington NC but we have a virtual office for long distance Clients.  (910) 399-2705.

How Does a Deduction Work?

Briefly, a deduction reduces your gross income and eventually your taxable income. But the actual tax it saves is only a percentage of the deduction. While the tax rate is actually progressive, a simple example here assumes an aggregate constant rate of 30%. So a $1000 deduction saves $300 in taxes.

How much is the IRS Standard Deduction?

It depends on your filing status.  The IRS usually adjusts it for inflation.  For folks older than 65, it is higher.  Same with legally blind folks.  In some cases, you can file Schedule L to increase the Standard Deduction.  But generally, for, 2013:

  • Single     $6,100.
  • Married Filing Jointly   $12,200.
  • Head of Household   $8,950.
  • Married Filing Separately  $6,100.

Per the IRS: Married Filing Separately

When a married couple files separate returns and one spouse itemizes deductions, the other spouse cannot claim the standard deduction and therefore must itemize on Schedule A to claim their allowable deductions.

Again, we’re a CPA firm in Wilmington NC.  Although we serve a broader geographical base through our virtual office. We offer tax preparation services, including Form 1040, Schedule A and Schedule L.  Plus all the business tax returns like Form 1120 for C Corporations, Form 1120-S for S Corporations, Form 1065 for Partnerships.  Also Form 1041 for Estates and Trusts, Form 706 etc.  Plus Forms 941 and 940 for employment/unemployment taxes.  And all NC tax forms as well.  We offer a free initial consult.  Please see our posts to gauge our ability, proactive philosophy and level of customer service.  Give us a call at (910) 399-2705.

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2 comments to CPA Tax Preparer comments on Standard Deduction vs. Itemized Deductions | Schedule A of Form 1040

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