Taxpayer Social Security No. Occupation Birth Date Spouse Social Security No. Occupation Birth Date Address County Home Phone ( ) City, State, Zip Bus. Phone ( ) E-mail Address Fax Number ( ) If we have any questions where may we reach you, and what would be a good time? Dependent Information First names of dependent children who lived with you. (If your children received over $400 income, it may be necessary for them to file a tax return. If you wish our assistance in this please be sure to supply their information also. Please be aware that the tax law taxes dependents under age 14 with unearned income greater than $1,500 at your rates.) You must supply Social Security Numbers to take the dependent deduction. Children who lived with you Birth Date Social Security No. Months Lived in Home During Tax Year Full-Time Student (Yes or No) Approximate Income Other Dependents you may have (you must supply more than one-half of their support and their income must be less than $2,900). Name Birth Date Social Security No. Relationship Months Lived in Home During Tax Year Do you supply onehalf of their support (Yes or No) Dependent s Approximate Income Page 1 Name and Dependents
Income tax payments made (Other than withholdings) Description Due Date Federal California Date Paid Date Paid 2000 s Fourth Quarter Estimate January 16, 2001 Prior Year s (2000) Balance Due April 16, 2001 First Quarter 2001 Estimate April 16, 2001 Second Quarter 2001 Estimate June 15, 2001 Third Quarter 2001 Estimate Sept. 17, 2001 Fourth Quarter 2001 Estimate January 15, 2002 2002 Estimates For 2002, estimated tax rules have changed again. For 2002, you may pay 100% of the prior years tax to be protected from penalty. For taxpayers with adjusted gross income above $150,000, this percentage is 112%. You also have the option of paying 90% of the current years tax calculating your income as of the end of the month before each estimate is due and annualizing the tax. Would you like us to calculate estimates at the safe harbor amounts (100%/112%)? If no, and you would like us to calculate your 2002 estimates, please estimate your 2002 income. Income Tax Refunds you received as a tax rebate payment from the Internal Revenue Service Federal Tax Refund received California Tax Refund received (Please supply copy of the refund notice from the State.) Wages (Please attach all W-2 s and list all employers below.) Employer Gross Wages Federal Taxes Social Security Medicare California Taxes SDI Page 2 Tax Payments, Estimates, Tax Refunds, and Wages
IRA, Pension and Annuity Income (Attach 1099 R s) Gross Taxable Federal Taxes California Taxes Your Cost (if any) Did you roll this over? Social Security Benefits Received (Attach Notice from Social Security Administration.) Up to 85% of your benefit may be taxable. Social Security Medicare Insurance Taxpayer Spouse Miscellaneous Income (DO NOT LIST interest, (page 11); dividends, (page 12); sales, (page 15); rents, (page 16); partnerships, (page 18) Roth IRA Contributions Taxpayer Spouse You may contribute up to $2,000 per person. Your AGI must be below $150,000 for a joint return, $95,000 for a single return. Enter amount you contributed to a Roth IRA account for 2001. These are non-deductible IRA Contributions (Both deductible and non-deductible) Taxpayer Spouse Were you or your spouse covered by a qualified employer pension plan? Enter amount of contribution for 2001 made in 2001. Enter contributions you made or will make for 2001 in 2002. Name of Trustee for your IRA (Attach statement from trustee). Value of IRA as of December 31, 2001. Self-employed Retirement Plan Contributions (KEOGHS) Was this account established prior to December 31, 2001? How much has been contributed to this plan for 2001? How much additional would you like to contribute? Page 3 Pension Income, Social Security Benefits, Miscellaneous Income, Roth IRA, IRA Contributions and Keoghs/SEPs
General Questions Yes No Address Change Did your address change during the year If yes, did you also change jobs (If yes, enter moving expenses on page 10) Enter miles from old home to new work place Enter miles from old home to old work place During the year was there a change in your: Marital Status Dependents Would you like to authorize us to talk to the government about your tax return if they should have any questions? If you answer yes (or don t answer this question) we will check the appropriate box on the tax return authorizing the government to contact us in case they have questions on the return. Were you notified by the Internal Revenue Service or Franchise Tax Board of changes to a prior years return? (If yes, please enclose agents report.) Did you sell any stocks or bonds during the year? (If yes, please attach broker s information related to the purchase and sale.) Did you make any gifts over $10,000 during the year? (If so, you will need to file a gift tax return.) Did you start a new business during 2001? Did you close a business during 2001? Were there changes in a prior years income, deductions, credits, etc. which would require filing an amended return? Did your employer pay premiums on life insurance which provides a death benefit of $50,000 or more where the beneficiary is named by you? At any time during 2001, did you have an interest in or signature authority over a financial account in a foreign country (such as bank/securities account, or other) with combined value of more than $10,000? Did you adopt a child in 2001? Did you maintain a Medical Savings Account (MSA)? Did you receive annual aggregate gifts or bequests from foreign persons in excess of $10,000 during the year? Do you have a current will? Do you have a living trust? You may now have the Internal Revenue Service and/or the Franchise Tax Board deposit your refund directly to your bank account. If you would like to take advantage of this (and if you have a refund), please supply the following information: Name of Bank Routing Transit Number (You get this from the Bank) Depositor Account Number (Your account number) Type of Account (Checking or Savings) Page 4 General Questions and Direct Deposit
Medical Expenses Medical expenses must exceed 7.5% of AGI to be deductible. Cosmetic Surgery is not deductible unless for medical purposes. Prescription medicine and drugs Physicians, dentists, nurses, rehab, lab work, eyeglasses, etc. Hospitals and Nursing Homes Health Insurance Premiums Paid by you (excluding long-term care). Long-term Care Insurance Premiums. Insurance reimbursements (If expenses being reimbursed were listed above) Enter the total miles you drove for medical purposes. (This includes trips to doctors, labs, physical therapy, etc.) Taxes Other Than Income Taxes (If the taxes relate to a business or rental property, please list on attached schedule. Sales tax is not deductible.) Real Estate Taxes Personal Property Taxes (Boat, Auto License fees, etc.) California DMV Fees include a non deductible amount. Please tell us if you are supplying the total amount, or only the deductible amount. Is this the deductible amount? Page 5 Medical and Tax Expenses (including DMV fees)
Home Mortgage Interest Expense Interest on loans in place as of October 13, 1987 is deductible. Interest on loans up to a total obligation of $1,000,000 borrowed after October 13, 1987 to purchase or improve are deductible. All other interest borrowed after October 13, 1987 may, or may not, be deductible and must be determined based upon the facts of the loan. Primary Residence Name of Lender Interest Rate Date Borrowed of Loan Interest Paid First Interest paid to: Second Interest paid to: Third Interest paid to: If any of the above are individuals, please supply names, addresses and social security numbers. Points paid in 2001 What is the length of the loan? Points paid in prior years on refinance, (we have if we prepared the prior return). Did you refinance your home loan during the year? If you refinanced, was the amount of the new loan greater than the amount of the loan that was paid off? (If yes, please provide us with details. We will need the original purchase price, amount of loan(s) prior to refinance and copy of new loan closing paper.) Secondary Residence Name of Lender Interest Rate Date Borrowed of Loan Interest Paid First Interest paid to: Second Interest paid to: Third Interest paid to: If any of the above are individuals, please supply names, addresses and social security numbers. Points paid in 2001. What is the length of the loan? Points paid in prior years on refinance, (we have if we prepared the prior return.) Did you refinance your home loan during the year? If you refinanced, was the amount of the new loan greater than the amount of the loan that was paid off? (If yes, please provide us with details. We will need the original purchase price, amount of loan(s) prior to refinance and copy of new loan closing paper.) Page 6 Home Mortgage Interest
Investment Interest Paid If related to a business (page 13) or rental property (page 16), please show on the appropriate schedule. Please list investment related loans and describe the purpose. Personal interest is no longer deductible. Lender, Loan Number, of Original Loan and Original Date Borrowed Purpose Money Used For Interest Paid Student Loan Interest A deduction of up to $2,500 is allowed for qualified Student Loan Interest. The student must have been at least a half-time student. Only interest paid in first 60 months in which interest payments are required is deductible. Your AGI must be below $75,000 on a joint return and $55,000 on all others. Lender, Loan Number, of Original Loan and Original Date Borrowed Purpose Money Used For Interest Paid Page 7 Investment Interest Expense and Student Loan Interest
Charitable Contributions Please list separately by organization. See page 9 for non-cash contributions. Political contributions are not deductible. For all contributions of $250 or more, you must obtain a written acknowledgement from the charity. The law requires you to obtain this, prior to the filing of your tax return. Contributions Charitable Mileage Please enter the total miles driven during the year for charitable purposes. Page 8 Contributions (except non cash contributions)
Non-Cash Charitable Contributions If the value is greater than $5,000 you must supply an appraisal and you will need to obtain the charitable organization and the appraisers signature on form 8283. You must have written acknowledgement and list of items donated for all donations. Donee Address Donation 1 Donation 2 Donation 3 Description of Property Date of Contribution Date you acquired property How did you acquire (purchase, gift, etc.)? What was your cost? What was the value at the date of contribution? Donation 4 Donation 5 Donation 6 Donee Address Description of Property Date of Contribution Date you acquired property How did you acquire (purchase, gift, etc.)? What was your cost? What was the value at the date of contribution? Page 9 Non-Cash Contributions
Other Deductions (These deductions must be in excess of 2% of AGI to provide a benefit.) Travel, Entertainment, Promotion and other business expenses For an entertainment or other promotional expense to be deductible, substantial documentation is required by the Internal Revenue Service. This would include (but is not limited to) a log or other type of diary or record including amounts, time and place, business purpose, business relationship of the entertained person, and the receipt. Business use of home telephone, if not reimbursed, is also deductible, if documented. The base service charge of the first telephone is not deductible. Reimbursement by your employer, if available, is preferable to deduction on your personal tax return. Business related meals and entertainment expenses are limited to 50% of the amount expended. Please be sure to list the amount of meals and entertainment separately, and in full so that we may apply this limitation. Educational Expenses (incurred to maintain or improve skills required in your business or employment). Union and Professional Dues Tax Return Preparation Fees Safe Deposit Box Rental Business Publications and Technical Journals Investment Advisory Fees Other Page 10 Other Deductions
Interest Income Please list payor and supply the 1099 issued to you. If the interest income is from an installment sale and the buyer is using the property as a personal residence, you are required to report the buyer s address and social security number on your return. The buyer must report your social security number on their return. There is a $50 penalty if this is not done. Interest Income on loans secured by real property must include the address and social security number of payor. Tax-Exempt Interest Income Page 11 Interest Income
Dividend Income Please list payor and supply the 1099 issued to you. We need complete copies of brokerage statements. Ordinary Dividends Capital Gains Distributions Nontaxable Distributions Foreign Tax Paid Page 12 Dividend Income
Business Income (If we prepare your books you do not need to complete this schedule.) Principal Business/Profession including product/service Employer Identification Number Business Name Business Address Yes or No Do the amounts shown below and on the next page include expenses for an office in your home? Did you materially participate in the operation of this business during 2001? Did you start or acquire this business during 2001? Income Gross Receipts or Sales Less returns and allowances Other Income (Interest Income should be shown on page 11) Cost of Goods Sold (if applicable) Inventory at beginning of year Purchases during the year net of personal items Cost of labor to produce goods Materials and supplies used to produce goods Other costs to produce goods Ending Inventory Other Expenses: Accounting Advertising Answering Service Bad Debts from sales or services Bank Charges Car and truck expenses (If any personal use, please list on Automobile Expense page) Commissions and Fees paid Delivery & Freight Employee Benefit Programs Page 13 Business Income (Self Employed)
Business Income (continued) Insurance (list medical insurance separately) Medical Insurance for employees Medical Insurance for owner and family members (excluding Long-term Care Insurance) Long-term Care Insurance Premiums Interest Expense Mortgages Interest Expense Other Janitorial Legal and other professional services Office Expense Outside Services Pension and profit sharing plans Postage Printing Rent on Vehicles, Machinery and Equipment Rent on Other Business Property Repairs Security Supplies Taxes Real Estate Taxes and Licenses (for business only, list personal income taxes on page 2) Telephone Tools Travel Meals and Entertainment expenses (Only 50% deductible Show 100%) Uniforms Utilities Wages Other (describe) Page 14 Business Income (Continued)
Capital Gains and Losses If you sold any items of a taxable nature, land, buildings, securities, etc., please complete the following. Attach all receipts. If you sold land or building(s), please attach the escrow statements for both the purchase and sale of the asset. If this is the first year of an installment sale, please attach copies of all notes relating to this sale. Stocks are considered sold on the trade date. For mutual funds and stocks, which have been purchased through a dividend reinvestment program, we will need to know all amounts paid for the stocks plus all dividends that were reinvested to determine your cost. In 2001 you have a one time election available to you to qualify assets you held as of January 1, 2001 for the new 18% capital gains rate for assets held 5 or more years starting January 1, 2001. Please review our cover letter and or discuss this with us to decide if you would like to take advantage of this election. If you sold a personal residence for more than $500,000 for married filing jointly, or $250,000 for everyone else, please list your sales and basis information here. Description of Property Sold (Attach copies of transaction) Sold to Relative (Yes/No) Date Acquired Date Sold Sales Price Cost or other basis Installment Sales from Prior Years. Enter Description of Sale, Year Originally Sold, Buyers Name, Address and Social Security Number Total Collected Principal Interest Page 15 Capital Gains and Installment Sales
Rental and Royalty Income Property 1 Property 2 Property 3 Address and/or Description of Property. If property is new, attach purchase details. Number of days dwelling used for personal purposes. Number of days rented during the year. Rents or Royalties Received Expenses Advertising Association Dues Auto and Travel (Use page 19 for personal automobile) Cleaning and Maintenance Commissions Gardening Insurance Legal, accounting, and other professional fees Management Fees Miscellaneous Mortgage Interest (Please attach notice from the Lender) Other Interest (Attach statement) Painting and Decorating Pest Control Plumbing and Electrical Repairs Supplies Taxes Telephone Utilities Other Page 16 Rental or Royalty Income
Rental and Royalty Income Property 4 Property 5 Property 6 Address and/or Description of Property. If property is new, attach purchase details. Number of days dwelling used for personal purposes. Number of days rented during the year. Rents or Royalties Received Expenses Advertising Association Dues Auto and Travel (Use page 19 for personal automobile) Cleaning and Maintenance Commissions Gardening Insurance Legal, accounting, and other professional fees Management Fees Miscellaneous Mortgage Interest (Please attach notice from the Lender) Other Interest (Attach statement) Painting and Decorating Pest Control Plumbing and Electrical Repairs Supplies Taxes Telephone Utilities Other Page 17 Rental or Royalty Income
Partnership, S Corporation, LLC and Trust Income Please list all partnerships, S corporations, LLC s and trusts for which you are an owner or beneficiary. Each form K-1 provided to you by the entity must be attached. Also, if possible, include a telephone number we might call if we have any questions. Partnership, LLC Name Telephone Number S Corporation Name Trust Name Page 18 Partnership, S Corporation, LLC and Trust Income
Automobile Expense and Mileage For automobile expenses to be deductible, a log is required showing miles driven, business purpose, and total miles for the year. Commuting is not deductible. Make of Automobile Do you own or lease this automobile? Date Acquired (or placed in service) Date Sold (if applicable) Sales Price (if applicable) Cost of Car Who uses this car? Business Miles for Employer Miles relating to Self Employed Business Miles relating to rental units Charitable miles Personal miles Total miles driven during the year Average daily round trip commuting distance Approximate number of days worked during the year Do you have written evidence to support business mileage? Expenses Gas and Oil Repairs and Maintenance Tires Miscellaneous Automobile License Insurance Lease Payments or interest Parking fees for business related parking Automobile 1 Automobile 2 Automobile 3 Automobile 4 Page 19 Automobile Expenses
Renters Credit California now has a renters credit if you rented and occupied premises in California that constituted your personal residence during at least 50 percent of the taxable year. For single taxpayers and married taxpayers filing separate returns your AGI must be less than $26,599, for all others your AGI must be below $53,198. Did you rent your home for more than 50% of the year? Yes or No Teacher Retention Credit Beginning in 2000, California offers a tax credit for teachers. If you have wages from teaching please complete the following information Wages from Teaching Credential Date Credential Number Years of Service Long-term caregiver credit For taxable years beginning on or after January 1, 2000, and before January 1, 2005, California allows taxpayers a credit equal to $500 for each "applicable individual" for whom the taxpayer provides long-term care. An "applicable individual" is one who is certified by a physician as having long-term care needs for a period of at least 180 consecutive days, a portion of which must occur during the taxable year for which the credit is claimed. An applicable individual can be the taxpayer, the taxpayer's spouse or dependent, and/or any person who could have been claimed as a dependent of the taxpayer were it not for the income limits that apply to dependents. The credit is not allowed to any eligible caregiver whose adjusted gross income for the taxable year is $100,000 or greater (R&TC Sec. 17083.80). Name of person requiring care Social Security Number Certifying Physician License Number Casualty Loss The Internal Revenue Code allows a deduction for any casualty or theft loss not reimbursed by insurance to the extent each loss exceeds $100 and the total losses are in excess of 10% of AGI. A casualty loss is by definition a loss from fire, storm, shipwreck, theft, or other event, which is sudden, and unexpected. Insurance claim must have been filed if it was an insurable loss. Description of Property Cost of Property Insurance reimbursement (if any) Fair Market Value before Casualty Fair Market Value after Casualty Casualty 1 Casualty 2 Casualty 3 Alimony Deduction If you are paying alimony pursuant to a court order allowing you a deduction for income tax purposes we will need the following information: Name of person(s) receiving alimony payments Social Security Number of person(s) receiving alimony payments of alimony paid during 2001 Household Employment Taxes The Internal Revenue Code requires you to report payments to anyone who is over the age of 18 and works in your home making $1,300 or more in 2001. You are required to give this person a W-2 and will be paying the payroll taxes with your personal tax return. Did you pay any individual $1,300 or more during 2001? Yes No Individuals Name Social Security Number Wages Paid in 2001 Federal Income Tax Withheld Page 20 Renters Credit, Teacher Credit, Long Term Care Credit, Causality Loss, Alimony Deduction and Household Employees
Childcare Expenses (For dependents under age 13 or dependents physically or mentally incapable of self-care.) A tax credit is allowed for qualifying expenses for childcare if both taxpayers or a widow or widower are working. The credit is based upon the amount spent and the smaller salary of the working parents. If the payments are made to an individual who performs these services in your home and they receive more than $1,300 per year, you are responsible for filing payroll tax returns for household employees. You must have Social Security/ID Number to get deduction. Name and address of individual or organization providing the care Social Security/ ID Number Paid How many dependents does this apply to? Education Credits There are two credits for qualified educational expenses. Qualified educational expenses are amounts you paid for tuition and fees required for enrollment or attendance at an eligible institution (college, university, or vocational school) eligible to participate in the federal student aid program. Room and board, books, etc. do not qualify for these credits. You are not eligible for these credits if your modified AGI is above $50,000 for a single person and $100,000 for joint returns. Hope Credit Allows up to $1,500 credit (100% of the first $1,000 and 50% of the next $1,000 of eligible expenses.) Expenses must have been paid in 2001. This credit is only available for a student who has not completed the first two years of post-secondary education (freshman and sophomore years) as of December 31, 2001. The student must be enrolled for at least one-half the normal full-time workload for his or her course of study and must not have been convicted of a felony for possessing or distributing a controlled substance. The Hope Credit may be claimed for no more than 2 tax years for each student. Lifetime Learning Credit Allows a credit of 20% of up to $5,000 of post secondary educational expenses. You may not claim the credit for any student for whom you elected to take the Hope Credit. Only qualified expenses paid during 2001 can be used to figure the credit. Student Name Was this student in the first 2 years of post-secondary education (actual years, not units)? Is this student enrolled in a program that leads to a degree, certificate or other recognized credential? Is this student taking at least one-half the normal load for his/her course of study? Has the student been convicted of a felony for possessing or distributing a controlled substance? Tuition and fees paid during 2001 Student Name Was this student in the first 2 years of post-secondary education (actual years, not units)? Is this student enrolled in a program that leads to a degree, certificate or other recognized credential? Is this student taking at least one-half the normal load for his/her course of study? Has the student been convicted of a felony for possessing or distributing a controlled substance? Tuition and fees paid during 2001 Page 21 Childcare, Hope Credit, Lifetime Learning Credit
TAX RETURN PREPARATION ENGAGEMENT LETTER We appreciate the opportunity to work with you and advise you regarding your income taxes. The Internal Revenue Service imposes penalties upon taxpayers, and upon us as return preparers, for failure to observe due care in reporting for income tax returns. In order to ensure an understanding of our mutual responsibilities, we ask all clients for whom we prepare tax returns to confirm the following arrangements. We will prepare your 2001 Federal and California Personal income tax returns. You are responsible for providing to us true, correct and complete information about your tax matters. We will not verify, or in any way audit, the information you submit, although we may ask you for clarification if necessary. We will render such accounting and bookkeeping assistance as we find necessary for the preparation of your income tax returns. We will furnish you with a personal income tax questionnaire to assist in gathering the necessary information for us. You have the final responsibility for the income tax returns and, therefore, you should review them carefully before you sign and file them. We will use our judgment to resolve questions in your favor where the tax law is unclear, or where there are conflicts between the taxing authorities' interpretation of the law and what appears to be other supportable positions. We will be available to answer your inquiries on specific tax matters and to consult with you on income tax planning. Your returns may, of course, be examined by the taxing authorities. Any items resolved against you by the examining agent are subject to certain rights of appeal. In the event of an examination, we will be available to represent you. However, our fees for preparing your tax returns do not include representing you in the case of an examination of your tax return. We have supplied you with a description of the new tax laws allowing an election for capital assets to treat them as sold on January 1, 2001 in order to potentially take advantage of the new lower 18% capital gains rate if you hold the asset for another 5 years. You must inform us about any assets you would like to make this election for. Federal and California tax laws require you to maintain documentation for all income and deductions reported on the tax return. Further, to substantiate travel and entertainment expenses, you must retain receipts, and a diary or other written documentation of expenses regarding automobile costs, business travel, business meals, entertainment and gifts. This documentation must disclose the events, dates, places, people involved, business relationships and topics of discussion. Federal and California laws further provide for possible penalties for late filing, underpaid or inaccurate tax returns. Don t forget, the law now requires a written acknowledgment for all charitable contributions of more than $250. This receipt is your responsibility and is to be obtained prior to the filing of the tax return. You can report any household employees on your federal return. We have supplied a section on the questionnaire for you to supply the information needed. You are also responsible for giving any household employees a W-2 on or before January 31, 2002; California requires separate payroll returns, also due January 31, 2002. Our work in connection with the preparation of your income tax returns does not include any procedures designed to discover errors or irregularities, should any exist. We will contact you if during the engagement we become aware of any such errors. Our fee for these services will be based upon the amount of time required, billed at our standard billing rates. All invoices are due and payable upon presentation. If these terms are acceptable to you, and the services outlined above are in accordance with your understanding, please sign below and return this letter to us. Accepted by: Taxpayer(s) 610 NEWPORT CENTER DRIVE, SUITE 610, NEWPORT BEACH, CA 92660 (949) 640-1333 FAX (949) 640-6842 E-MAIL tom@thedonovancompany.com Date