Question

Need some help with this assignment please. I did the other 2 sections fine but this one i am having some issues with. We have a scenario where a client has emailed us. In the email response back to the client we have to do the following.

1. ID what additional documents the client needs to provide in order to do their taxes

2. ID applicable deductions and credits available for clients

3. differentiate typed of income and expenditures.

MY ISSUE IS I AM JUST STARTING OUT IN THE TAXATION CLASS AND FOR THIS PORTION I AM NOT QUITE SURE WHAT THEY NEED EVEN WITH REREADING MY MATERIAL. I NEED HELP AND GUIDANCE PLEASE!

The email that we are responding to is as follows...

From: Freida C. Butler

To: Jane Doe, Accountant

Cc: Daniel B. Butler

Date: January 20, 2016

My name is Freida C. Butler, and my husband and I were referred to you by our good friend

Jackie Lynn. We would like for you to prepare our tax return this year. My husband works for

WJJJ, Inc. and I work at a real estate company, Corbin Realty. I am not considered a

subcontractor for them. Many of my friends are contractors for them and receive a 1099, but I do

not. I believe I receive a W2—does that sound like the right form?

We have three children who live with us. They were each in school at some point this past year.

So you need to know which of them were enrolled in school last year or for how long? Will I get

any tax breaks for them being in school?

We also had income from some investments. We received interest and dividends from a few

places. Can you tell me if those are reported on a 1099 form? If so, I may have to request this

from my bank.

We own our home and paid the typical homeowner’s expenses. What expenses will you need

from us relating to our home?

Are there any other questions you have for us, such as other deductions we can take?

Answer 1

Answer: The Reply is as under:

W2 form is right form as you are working as an employee and your taxes are being withheld by your employer. You are not working like your other friends who are working as independant contractor.

Yes, As per New Tax Laws, Education Tax Credit can be availed for that we need the details of your kids, schools name and enrollment details.

Yes. Div & Interst income are reported in 1099, we need to collect the relevant details...1099-INT, 1099-DIV.

Yes, We need, if there is any mortgage loan on your home, interest paid thereupon, plus property taxes paid by you, any improvement cost incurred.

Yes, If any Insurance Policies premium you have paid for family members. If you have some dependants other than kids and aid given by you.