Author Archives: c11631804

Death and Taxes

The death of a love one is a difficult time of grief and change. In addition, settling affairs can be daunting and confusing, including tax consequences. When a taxpayer dies, certain responsibilities fall onto the personal representative (PR). Under state law, a PR is appointed by a court to administer an estate and includes both executors (when the decedent has a will) and administrators (when the decedent does not have a will). The PR will be responsible for collecting the decedent’s property, paying any creditors, distributing assets to beneficiaries, etc. The PR is also responsible for filing any tax returns and paying any taxes owed.

Though it may sound daunting, creating a will can be much easier than you may think. Most states only require the will to be declared and signed by the yourself (and spouse, if married), then signed by two witnesses. It can even be handwritten. Check your state to account for any differences.

The absence of a will can complicate matters tremendously and severely lengthen the amount of time spent in court, especially depending on the particular laws of the state you are dealing with. So do yourself and your loved ones a favor and set up a will for yourself, if not establish a trust (see an estate lawyer for proper guidance). When there is no probate and no appointed representative, the IRS allows a person charged with the property of the decedent to file the tax returns, pay tax owed and/or claim refunds. Though not specified who this person should be, it is typically the surviving spouse, the trustee of the decedent’s revocable trust, the personal representative nominated in the will or a beneficiary who undertakes the work. The IRS definition of “personal representative” differs from the state definition in that it refers to anyone filing for a decedent, whether or not court appointed.

While income received before death must be reported on the decedent’s final form 1040, income received after death may need to be reported in the following ways:

  • Estate Form 1041 – use to report income in respect of a decedent (IRD) paid to the probate estate, sale of capital assets by the probate estate, etc.
  • Beneficiary’s Form 1040 – use to report IRD paid directly to the beneficiary, sale of capital assets after they have been received from the decedent, etc.

It is important to note that a PR may be personally liable for unpaid tax if he or she distributed assets, the  estate is insolvent as a result, and the personal representative had notice of the tax claim. PR’s can request discharge from personal liability for estate, gift and income tax after returns are filed. The PR is discharged from personal liability nine months after receipt of the request by the IRS, unless notified of unpaid tax.

None of this should be construed as legal or even tax advice. For those, you will need to consult your lawyer and/or tax adviser. Your situation is unique and will require certain considerations, so let an expert guide you in the best path possible.

Thank you!


-Heritage Accounting and Tax Services

Tax Credits…in Advance?

Did the IRS send you money last year? If so, you probably received a letter or two from them recently. The IRS sent out one letter for the amount of Economic Impact Payment they sent you (EIP, aka Recovery Rebate, aka stimulus, aka stimmy check). This is what that letter looks like:

They sent out another letter for the total amount of Advanced Child Tax Credit (ACTC) they sent you. This is what that letter looks like:

If that was all there was to it, it would be pretty simple to figure out. But wait…there’s more! The IRS sent out these letters not just for you, but for your spouse as well. This means that if you received a total deposit of $2,800 for the EIP in 2021, you should receive a letter for your portion, $1,400, and one for your spouse’s, another $1,400. The same holds true for the ACTC.

In summary, we will need copies of every letter you receive from the IRS, or at least the total of all monies you received for the EIP and ACTC in 2021. Failing to report the full amount of these credits could slow down the processing of your tax return while reducing your refund or even costing you money in the end.

We will help you sort it all out.


-Heritage Accounting and Tax Services

Landlord Life

Did you have rental income in 2021? Whether you’ve been in the game for a while or you suddenly found yourself with a rental property on your hands, you probably already realize there are tax considerations involved. You may have had rental income from a vacation unit, residential unit, multi-family home, a portion of your own home, commercial property, or myriad other ways you could have received some payment from someone who used your property in some form or fashion. The IRS is going to look at several factors in determining how to tax you (or allow loss) on the property.

It may all seem daunting, but don’t lose hope; you have some wonderful tax opportunities now. But you need to report things correctly in order to take full advantage of these opportunities, and to keep the IRS satisfied (audits…yikes!) For example, you may know that you can take depreciation on a rental property, but do you know how to calculate it? Do you know your cost of the property vs. the fair market value when you started renting it? Do you know how much the land is worth (land is not depreciable)? Do you know where to report all of these things on your tax return? Many people get into all sorts of trouble in the area of depreciation alone.

But there are even more questions:

  • Is your income active or passive?
  • Can you be classified as a real estate professional?
  • Do you have multiple properties?
  • Are you using any for personal use? If so, how much?
  • Do you know which income is taxable and which expenses are deductible?
  • Do you know which are only cash flow items that don’t get reported on a tax return (i.e. rental deposits and mortgage payments)?
  • Do you know which forms to use?
  • And the list goes on…

The fact is, rental income and the tax effects of it are a complicated business, and we strongly encourage you not to go it alone here. Tax professionals have put in the hours and gained the knowledge required to make this a much simpler part of your life. Take advantage!

One more thing: if you are looking to get out of a rental property, there are some definite tax advantaged ways to sell it. You can save thousands or more if you structure the sale properly, even to the point of paying no tax now…potentially. All it takes is thinking just a little outside the conventional way of selling property. For example, whether you seller finance, 1031 exchange, lease option, or even convert it to your main home, you have options that your tax professional can help you sort through. But you have to make all these decisions before you sell the property, because after the sale is done, you’re locked in. So contact us BEFORE you decide to sell your property so we can see what option is right for you.

Until then, happy landlording!


-Heritage Accounting and Tax Services

Time for Taxes!

As we approach another tax season, it’s time to ensure that you are well prepared for it. Of course, there will always be areas unique to your situation, but there are a few items that we see year after year that may affect you. So as you are gathering your information together to bring to your tax preparer, keep these things in mind to minimize the complications in preparing your return, and in turn, this will help minimize the cost to you!

Tax Forms:

It is usually pretty easy to remember your W-2 when it comes to preparing your tax return, but there are plenty of other forms the IRS requires that you may have received. These forms typically include forms that begin with numbers like 1095, 1098, 1099, K-1, etc. Be sure to bring all these with you for your tax preparation.

Health Insurance:

You are no longer required to carry health insurance coverage for each member of your family for the entire year. However, if you purchased health insurance from the marketplace, we will need a copy of the 1095-A you receive for the year. On a related note, let us know if you made any contributions to or received any distributions from a health savings account during the year.

Charitable Contributions:

Typically, when you donate non-cash items (i.e. clothes, furniture, books, etc.) to places like Goodwill and Salvation Army, they will give you a receipt signifying that you made a donation. What they often do not include on these receipts is item descriptions, the value of what was donated, and sometimes even the date of the donation. You will need to provide all of this information if the total of the donations is over $500 for the year. We cannot determine the value of the items, since only you know what was given, how much was given, what condition it was in, etc. Note that if you donate a vehicle with a value over $500, you cannot claim a deduction unless you attach to your return a copy of the contemporaneous written acknowledgment you receive from the donee organization. Also, any one item or group of similar items you give that have a value of over $5,000 will generally need a written appraisal.

Employee and Business Expenses:

If you are an employee and have job expenses you paid for personally, note that these expenses are not tax deductible for tax years 2018 and forward. If you are in this position, you may want to consider talking to your employer about being reimbursed for them. If you own rental property, a farm or a business, these expenses are deductible inasmuch as they are business related. It is vital to keep some sort of record for all your business expenses. For tax preparation, we prefer for these expenses to be categorized and summarized for the year. A special consideration for mileage and meals is that you need to document the what, who, when and business purpose of the expenses. While we don’t need the details to prepare your taxes, you need to keep this information stored and accessible in case of potential audits.


You can claim your child as a dependent if he/she is under age 19 (or a full-time student under age 24) if you provide more than half of his/her support during the year. You may also be able to claim older children, other dependents in your home or those in certain care facilities, depending on the circumstances. If you have children, parents or other dependents you would like to claim on your tax return, we will need to know the name, SSN, birth date, and how many months they lived with you during the year, for each dependent. If you have a joint custody agreement, you may also need to provide a copy of your Form 8332. If you or your dependent(s) paid tuition for higher education during the year, you will need to provide both the 1098-T from the institution and receipts substantiating your payments and/or loans. Lastly, for 2021, you will need to provide how much you received in the Advanced Child Tax Credit. These were sent out monthly, depending on how many children the IRS expects you to report on your 2021 return. We need to reconcile this on your tax return.
Note: you will also need to provide how much you received in stimulus payments for 2021.

Direct Deposit:

If you are receiving a refund and would like to have it direct deposited into your account, we will need to know the account number, routing number and whether it is a checking or savings account. If you owe and would like to pay through direct debit, we will need the same information as well as what date you would like to pay the balance due (not later than the due date of the return). Please include this with all of your other tax information.

We look forward to helping you with your taxes this season and want to make your experience as pleasant as it can be. Our goal is your tax compliance while paying as little tax as is feasible. If you have any questions about any of these items, please let us know.


-Heritage Accounting and Tax Services, LLC

Christmastime Is Here!

As we surround ourselves in the holiday season, gather with friends and family, and remember the birth of Jesus this Christmas, we also prepare for the end of another year. And as we approach another tax season, we would like to help ensure that you are best prepared for it by giving you some information you should find quite helpful. Of course, there will always be areas unique to your situation, but here are a few items that we see year after year that may affect you:

Health Insurance:

You are technically still required to carry health insurance coverage for each member of your family for the entire year, though there is no longer any penalty for not doing so. Importantly, if you purchased health insurance from the marketplace, we need a copy of the 1095-A you receive for the year. On a related note, also let us know if you made any contributions to or received any distributions from a health savings account during the year.

Charitable Contributions:

Depending on how much you give to charities during the year, you may have a significant tax benefit from these donation. In order to take the benefit, your own records (bank statement, check copy, credit card statement, etc.) will suffice for cash contributions less than $250, but any cash contributions over $250 require a receipt from the donee organization. Also, if any goods or services were received (i.e. charity dinner), you should have a receipt from the organization stating the value of that good or service. You need a receipt for all non-cash donations such as clothing, household goods, etc. Remember, it is up to you, to determine the value of the goods you donated; the donee organization, your tax preparer, the IRS, etc. cannot determine a value of these goods for you. If you need assistance in the valuation, many tools are available like the valuation guide on Goodwill’s website: . We also have this guide available on our website at . While we don’t need the receipts in order to prepare your return, we do need to know, at minimum, what was donated, the donation date, the donee and the value of the goods donated. We need this information for each donation throughout the year.

Make sure you have a business and not a hobby:

In order to take business expenses, you must have an activity that the IRS recognizes as a business. One indicator the IRS looks for in identifying a business is consistent and continuing losses. If you do not show a profit year after year, the IRS is more likely to limit or disallow the losses. On a related note, if you have not received any income from sales, you most likely do not yet have a business. Please refer to Code Section 183 for further guidance.


You may claim credits for dependents who have been under your care for most of the year, and this credit amount has increased for most taxpayers for the 2021 tax year. Please note that half of these credits may have been sent to you already from July through December of this year. We will need to know how much you received in these advanced credits so we can reconcile them on your return and keep you and the IRS on good terms. The IRS will send letter 6419 that states the amount of advance credits you received. Please note that in rare circumstances, you may need to repay some of the advanced credit. If you have children, parents or other dependents you would like to claim your tax return, we will need to know the name, SSN, birth date, and how many months they lived with you during the year, for each dependent. If you have a joint custody agreement, you may also need to provide a copy of your Form 8332. If you or your dependent(s) paid tuition for higher education during the year, you will need to provide both the 1098-T from the institution and receipts substantiating your payments and/or loans.

If you have any questions about any of these items, please call us and we will be happy to discuss them with you.

From all of us here at

-Heritage Accounting and Tax Services



With Grateful Hearts

The holiday season is upon us, and it brings with it all the busyness and anxiety of meals to prepare, family and friends to entertain, shopping to accomplish and more. In the midst of all this, let’s take some time to look around at all the wonderful things that surround us. Let’s name some things we’re thankful for and share that gratitude with others. Here are a few quotes for the season to help us all remember to be grateful for all we’ve been blessed with.

“A grateful heart sees each day as a gift. Thankful people focus less on what they lack and more on the privileges they have.”
“The grateful heart is like a magnet sweeping over the day, collecting reasons for gratitude.”
“Gratitude gets us through the hard stuff.”
-Max Lucado

“The people we rely upon most are the same people we most often take for granted.”
-Mike Rowe

“No one who achieves success does so without the help of others. The wise and confident acknowledge this help with gratitude.”
-Alfred North Whitehead

We are so thankful for all of you and wish you a very Happy Thanksgiving!

-Heritage Accounting and Tax Services <><

Extension Deadlines

As of the writing of this post, it is mid-August and the tax extension deadlines are coming up quickly!

If you were not able to file your business or personal return timely, you had the opportunity to file for an extension of time to submit your return.

The extended deadline for personal tax returns is October 15th, which will come more quickly than you think.

The extended deadline for business returns (FYE 12/31) is September 15th. That is only one month away.

Your tax preparer will need all of your information as soon as possible in order to timely file your return. For most preparers, this will mean at least two weeks before the due date.

Please also keep in mind that, although you have an extension of time to file the return, you do not get an extension on the time to pay the tax. This means that any unpaid taxes from the original due date will continue to accrue interest and penalties until paid, regardless of when the return is filed.

For any further questions, consult your tax advisor…and get that information in today!


-Heritage Accounting and Tax Services

Advance Child Tax Credit Payments

UPDATE 07/22/21:
A quick public service announcement: The Child Tax Credit scams have already started. Remember, the IRS will not initiate contact through email or text, so do not click on any links or download anything you aren’t expecting.

Additionally, if you’d like to opt out of the advance, it may be easiest for you to set up an account with the IRS as opposed to other methods.

The IRS is sending out some 2021 child tax credit payments in advance. These will be sent from July through December of 2021, up to half of the credit in total. If you have dependent children under 18 years of age, you are potentially eligible for a 2021 child tax credit of $3,000 ($3,600 for children under 6), therefore receiving monthly installments of $250 or $300, respectively. However, this will lower your tax credit on your 2021 tax return by the amount you receive in advance. Additionally, if your situation in 2021 is different enough from what it was in 2020, you may end up having to pay some or all of this credit back when you file your 2021 tax return.

If you have questions regarding these payments, you can find many resources at the IRS website here.

We would also love to talk with you regarding any changes you’ve had, and we can provide estimates if necessary.


-Adam Greene
Heritage Accounting and Tax Services

Of Taxes, Viruses and 2021

A quick update regarding this tax season and ongoing virus concerns…

First and foremost, we appreciate your business and look forward to working with you this year! We are flexible and will work with you to get your tax returns prepared in whatever way makes you most comfortable. We have a number of options available including the following:

  • You can drop off your information
  • Send your information in to us
  • Schedule a phone call or other remote appointment
  • And we are still available for traditional sit-down appointments as well

We will remain open and running strong throughout the tax filing season, but don’t expect any extensions this year. Congress has shown no indication of moving the deadline again like they did in 2020, so get your returns done as early as you can.

We have several resources available on our website, including quite a few tax organizers to help you get things ready. Just look under the “Resources” tab for these helpful items.

We look forward to hearing from you soon!


-Heritage Accounting and Tax Services

Recovery Rebates

You may have noticed an extra $600 or more in your bank account recently. That’s because Congress passed several new measures into law, one of them being an additional advanced rebate, after the initial $1,200 payments that were sent out earlier in 2020. The bill provides a second round of payments to taxpayers of $600 per individual ($1,200 for married couples filing a joint return) plus $600 per qualifying child in 2020. This payment will be reduced as an individual’s income exceeds $75,000 for the 2019 tax year, reducing to zero when the income exceeds $99,000. For married, joint filers, this increases to $150,000 and $$198,000, respectively. For head of household, the numbers are $112,500 and $146,500.

The IRS has updated its rebate check tool, so you can check where yours may be here:

The initial $1,200 rebates will need to be reconciled on your 2020 tax return. You should have received, or will soon receive, a letter form the IRS stating what was sent to you; use this information, or give it to your tax preparer to report on your 2020 return. If you were sent too little, you will receive the difference with your return. For example, if you added a child in 2020 (i.e. birth or adoption), you are eligible for a little more than you may have received. If you were sent too much, you will not be required to pay it back.

Let us know if you have any questions!


-Heritage Accounting and Tax Services