Steven R. Perryman, CPA 1040 - INDIVIDUAL TAX RETURN ENGAGEMENT LETTER This letter is to confirm and specify the terms of our engagement with you and to clarify the nature and extent of the services we will provide. In order to ensure an understanding of our mutual responsibilities, we ask all clients for whom returns are prepared to confirm the following arrangements. We will prepare your 2012 federal and requested state income tax returns from information that you will provide to us. We will not audit or otherwise verify the data you submit, although it may be necessary to request clarification of some of the information. We have provided you with an organizer to guide you in gathering the necessary information. Your use of the organizer will assist in keeping pertinent information from being overlooked. We will not proceed with this engagement until all pertinent documents have been received and verified by you, the client. It is your responsibility to provide all the information required for the preparation of complete and accurate returns. You should retain all the documents, canceled checks and other data that form the basis of income and deductions. These may be necessary to prove the accuracy and completeness of the returns to a taxing authority. You have the final responsibility for the income tax returns and, therefore, you should carefully review the documents before you sign and file the tax return. Our work in connection with the preparation of your income tax returns does not include any procedures designed to discover defalcations or other irregularities, should any exist. However, should we find any irregularities or unusual items we will bring them to your attention. We will render such accounting and bookkeeping assistance as determined to be necessary for preparation of the income tax returns. If we discover any errors or omissions on a prior year return we will bring that to your attention. We will use professional judgment in resolving questions where the tax law is unclear, or where there may be conflicts between the taxing authorities interpretations of the law and other supportable positions. Unless otherwise instructed by you, we will resolve such questions in your favor whenever possible. The filing deadline for the tax return is April 15, 2013. In order to meet this filing deadline, the information needed to complete the return should be received in this office no later than March 21, 2013. If an extension of the time is required, any tax due with this return must be paid with that extension. Any amounts not paid by the filing deadline may be subject to interest and late payment penalties. The law provides various penalties that may be imposed when taxpayers understate their tax liability. If you would like information on the amount or the circumstances of these penalties, please contact us. Your returns may be selected for review by the taxing authorities. Any proposed adjustments by the examining agent are subject to certain rights of appeal. In the event of such governmental tax Toll Free: 866-994-4400 Fax: 417-831-4331 1835 E. Republic Rd. Suite 200, Springfield, Missouri 65804
Abacus CPA s LLC 2012 Income Tax Engagement Letter Page 2 of 2 examination, we will be available, upon request, to represent you under a separate engagement letter for that representation. Our fee for these services will be based upon the amount of time required, at standard billing rates, plus out-of-pocket expenses. We may require a retainer to be paid when you submit your 2012 data to us. All invoices are due and payable upon presentation. If the foregoing fairly sets forth your understanding, please sign the enclosed copy of this letter in the space indicated and return it to our office. However, if there are other tax returns you expect us to prepare, such as gift, property, local, or school district, please inform us by noting so in the "Comments" just below your signature. We want to express our appreciation for this opportunity to work with you. Very truly yours, Abacus CPAs, LLC Accepted By: (Signature) (Print) Date: Accepted By: (Spouse Signature) (Print) Date: Comments:
INDIVIDUAL TAX ORGANIZER (1040) If we did not prepare your prior year returns, provide a copy of federal and state returns for the three previous years. Taxpayer s Name SSN Occupation Spouse s Name SSN Occupation Mailing Address City, Town, or Post Office County (Not Country) State Zip Code School District Telephone Number: Telephone Number (Taxpayer) Telephone Number (Spouse) Home ( ) Home ( ) Home ( ) Email(T) Mobile ( ) Mobile ( ) Email(S) Fax ( ) Fax ( ) Email Email Taxpayer Date of Birth Blind? - Yes No Spouse Date of Birth Blind? - Yes No Dependent Children Who Lived With You:* Full Name Social Security Number Relationship Birth Date 1) 2) 3) 4) 5) 6) 7) *If claiming due to a divorce decree, include a copy of the decree. Number Months Resided in Your Home Other Dependents: 8) Full Name Birth Date Social Security Number Relationship Number Months Resided in Your Home % Support Furnished By You 9) 10) 1
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INDIVIDUAL TAX ORGANIZER (1040) Please answer the following questions and submit details for any question answered Yes : 1. Did any births, adoptions, marriages, divorces, or deaths occur in your family last year? If yes, provide details on page 1 next to their information. 2. Where you a resident of more than one state during the year? Please complete details of states and addresses in the space provided below: Address (Street, City, State, Zip) Dates of Residence Local Return? (Yes/No) Rent (R) or Own (O)* YES NO *If you sold or purchased a principal residence or other real estate, provide settlement sheet (HUD-1) and Form 1099-S 3. Did any of your dependents have income of $950 or more ($400 if self-employed)? 4. 5. Would you like to elect to report this income on your return (rather than file a separate return)? Do you wish to have $3 (or $6 on joint return) of your taxes applied to the Presidential Campaign Fund? 6. Did you pay any federal or state income tax estimates for tax year 2012? If so, please give details on the table below. Federal State Local Date Paid Amount Date Paid Amount Date Paid Amount 1 st Qtr 2 nd Qtr 3 rd Qtr 4 th Qtr 7. Do you want any federal refund deposited directly into your bank account? 8 If yes, enclose a voided check or fill out the information regarding your bank account.. BANK ACCOUNT INFORMATION (if having automatic withdrawal/deposit) Bank Name: Account Number: Routing Number: a) Do you want any overpayment of taxes applied to next year s estimated taxes? b) If you have a refund, and either you or your spouse have any outstanding child support payments or federal debt, would you like us to prepare an injured spouse form to protect your refund?(specify party owing debt) 3
YES NO 8. If you owe federal tax upon completion of your return, are you able to pay the balance due? Check the box if you would like more information about an installment Agreement when this tax return is completed a) Do you want any balance due directly withdrawn from this same bank account on the due date (April 15, 2013)? b) Do you want next year s estimated taxes (Federal only) withdrawn from this same bank account on the due dates? 9. If you or your spouse has self-employment income, did you pay any health insurance premiums or long-term care premiums? If yes, was it through your contractor? For any month during 2012, were you (as the self-employed individual) eligible to participate in a health plan established by another employer of yours, you or spouse of a dependent child under age 27. (Enter months eligible ) 10. Did you purchase rental property during 2012 (or rent your personal residence)? If so, provide supporting documents and details of revenue and expenses and Days rented Days used personally. 11. Did you acquire any interests in Partnerships, LLCs, S-Corporations, Estates, or Trusts this year? 12. Did you barter for goods or services during 2012? 13. Do you have records to support travel, entertainment, or gift expenses? The law requires that adequate records be maintained for travel, entertainment, and gift expenses. The documentation should include amount, time and place, date, business purpose, description of gift(s) (if any), and business relationship of recipient(s). 14. Have you received any correspondence from taxing authorities during 2012 or in prior years that could affect the preparation of this tax return? (provide copies) 15. Can the Internal Revenue Service discuss questions about this return with us? 16. Would you like this return to be electronically filed? IRS requires us to e-file unless you provide a reason for opting out. Enter reason _. 17. How would you like to receive your tax return copies? Paper Copy (By Mail or Pick Up ) CD Email Portal What is your Filing Status (please check only one): SINGLE HEAD OF HOUSEHOLD MARRIED FILING JOINT QUALIFYING WIDOW(er) (provide date of death) MARRIED FILING SEPARATELY 4
Please check all that apply Yes No INCOME WAGES, SALARIES, AND OTHER EMPLOYEE COMPENSATION Enclose all Forms W-2. SELF-EMPLOYMENT INCOME Enclose all Forms 1099-MISC. PENSION, IRA, AND ANNUITY INCOME Enclose all Forms 1099-R. If you meet an exception for early withdrawal tax (penalty), enter reason. UNEMPLOYMENT INCOME Enclose all Forms 1099-G. SOCIAL SECURITY BENEFITS RECEIVED Enclose all Forms 1099-SSA. INTEREST INCOME Enclose all Forms 1099-INT and statements of tax-exempt interest earned. DIVIDEND INCOME Enclose all Forms 1099-DIV and statements of tax-exempt dividends earned. OTHER TAXABLE INCOME List and enclose related Forms 1099 or other forms. If you are enclosing a 1099-B please let us know the cost basis of any proceeds. INCOME FROM PARTNERSHIPS, ESTATES, LLCS, TRUSTS, AND S CORPORATIONS Enclose all Schedules K-1 received to date and list below all Schedules K-1 not yet received. CONTRIBUTIONS TO RETIREMENT PLANS Please provide details of all contributions to any qualified retirement plan. Please contact our office if interested in contributing the maximum amount allowed. GAMBLING WINNINGS AND LOSSES Enclose all Forms W2-G and provide a detailed ledger of winnings and losses, along with any tax documents received. INCOME FROM LEGAL PROCEEDINGS, CANCELATION OF DEBT (including student loans and mortgages) Please provide details and any documents or tax forms such as 1099-C and 1099-A. ALIMONY PAID Please provide details of any alimony paid to others. This must include the name of the recipient, their Social Security number and the amount paid. If a divorce occurred this year, enclose a copy of the divorce decree and property settlement. OTHER NON-TAXABLE INCOME Please provide details of any non-taxable income, such as governmental or state income assistance that you received during this tax year. Examples are welfare, food stamps, housing, etc. Please describe any changes to your income, deductions and credits in 2012 as compared to any prior years returns: Please describe any anticipated or known changes in your income, deductions, and credits for 2013 compared to your 2012 tax year: 5
INFORMATION RELATED TO OVER-THE-ROAD TRUCK DRIVERS Travel related expenses are deductible for both company drivers and owner/lease operators. To claim a deduction you must be traveling away from home for a business purpose. It is very important that you maintain a home to be able to claim travel expenses. Do you own your truck? Yes No If yes, please enclose bill of sale and interest statements. Days on the Road (Only complete if NOT paid per-diem through your company): How many days were you on the road driving during the year? This information will be used to calculate your daily meals per diem deduction. This should be able to be verified by your logs. Taxpayer Spouse - Number of days on the road as a company driver - Number of days on the road as an Owner/Operator (Self-employed) If not already provided to us, please enclose copies of all settlements, operating statements and cash expenses related to your over-the-road driving. Be sure to separate those deductible expenses that were incurred while a company driver from those incurred while self-employed. List here any additional CASH (out of pocket) expenses not previously submitted to Abacus CPAs.: Company Driver Self-employed Tolls/Parking Scales Repairs Lumpers Operating Supplies Licenses & Permits Cash Fuel Oil & Additives Truck & Trailer Washes Communication Safety/Weather Gear Recruiting Expense Office Supplies/Postage Security Equipment Lodging Travel - laundry Travel - Other Miscellaneous 6
PERSONAL VEHICLE USED FOR BUSINESS (Not your tractor/trailer) Make/Model _ Date placed in service Business miles driven during year Total miles driven during year Actual expenses: Gas, oil Taxes Repairs Tags & licenses Tires, supplies Interest Insurance Lease payments Parking Other Did you acquire, lease or dispose of a vehicle for business during this year? Yes No If yes, enclose purchase and sales contract or lease agreement. Did you use the above vehicle in this business less than 12 months? Yes No If yes, enter the number of months Do you have another vehicle available for personal purposes? Yes No Do you have evidence to support your deduction? Yes No Is the evidence written? Yes No OFFICE IN HOME To qualify for an office in home deduction, the area must be used exclusively for business purposes on a regular basis in connection with your employer s business and for your employer s convenience. If you are selfemployed, it must be your principal place of business or you must be able to show that income is actually produced there. If business use of home relates to daycare, provide total hours of business operation for the year. Business or activity for which you have an office Total area of the house (square feet) Area of business portion (square feet) Business percentage I. EXPENSES TO BE PRORATED: Mortgage interest Real estate taxes Utilities (Yearly) Property insurance Other expenses - itemize II. EXPENSES THAT APPLY DIRECTLY TO HOME OFFICE: Telephone (Must be a landline Do NOT enter cell phone) Maintenance Other expenses - itemize 7
ITEMIZED DEDUCTIONS MEDICAL AND DENTAL EXPENSES Please note that medical expenses must exceed 7.5% of your Adjusted Gross Income to be deductible. Health insurance premiums and medical expenses paid with pre-tax dollars (Cafeteria Plans, Health Savings Accounts, etc.) are not deductible. Provide a list of your medical expenses not covered by insurance. Do not hesitate to contact our office for a list of those items that may be included. DEDUCTIBLE TAXES Please provide a list of any state and local income taxes paid during 2012 for any prior years taxes. Be sure to include whom you paid, the amount paid and when paid. Please provide a list of any real estate taxes paid on your primary or secondary residence or any other property. Be sure to include whom you paid, the amount paid and when paid. Please provide a list of any personal property taxes or Ad Valorem taxes paid. Be sure to include whom you paid, the amount paid and when paid. Please provide a list of sales tax paid on major items such as automobiles, boats, home improvements, etc. Be sure to include whom you paid, the amount paid and when paid. INTEREST EXPENSE Please provide copies of all forms 1098, Mortgage Interest Statements, received from your financial institution. Is this for an original acquisition purchase or a refinanced mortgage? (Circle one,) If you did not receive form 1098 please provide the recipient s name, a description of the property and the amount of interest paid during the year. If the recipient is an individual, please provide their Social Security number. Please provide copies of any document received reporting to you student loan interest paid during the year. CONTRIBUTIONS Please provide a list of cash contributions for which you have receipts, canceled checks, etc. NOTE: You need to have written acknowledgment from any charity to which you made individual donations of $250 or more during the year. Please provide a list of any expenses incurred while performing volunteer work for a charitable organization. Be sure to include your automobile mileage. For non-cash contributions, such as Goodwill, you must enclose your receipt from the organization. The receipt must include the organizations name and address, a description of the property donated, the date acquired and how it was acquired, how much you paid, the date contributed and the fair market value of the property on the date contributed. Contact us for more information on non-cash contributions. MISCELLANEOUS DEDUCTIONS Please provide a list of your miscellaneous deductions. These deductions include any unreimbursed employee expenses, union dues, income tax preparation fees, some legal fees, employment agency fees, etc. Contact our office for more information on miscellaneous deductions. 8
CHILD CARE EXPENSES/HOME CARE EXPENSES Please provide details if: You paid an individual or an organization to perform services for the care of a dependent under 13 years old in order to enable you to work or attend school on a full time basis OR You paid an individual or organization to perform in-home health care services for yourself, your spouse or your dependents. EDUCATIONAL EXPENSES Did you or any other member of your family pay any educational expenses this year? Yes No If yes, was any tuition paid for either of the first two years of post-secondary education? If yes provide Form 1098-T from school: Was any of the preceding tuition paid with funds withdrawn from an educational IRA or 529 Plan? If yes, how much? $ Yes Yes No No 9