Corridor Taxes

Corridor Taxes Focused on the accounting and tax needs of individuals and small organizations in the I-380 Corridor and Central Iowa.

02/18/2022

From mom and pop stores on Main Street to large corporations, many businesses are stepping up to combat through Iowa Businesses Against Trafficking. Here’s a few of the 400+ businesses that have already joined. For more info visit http://IBAT.iowa.gov.

Virtual Tax FilingVirtual tax filing is available in the comfort of your home. We provide encrypted file uploading, virt...
12/20/2021

Virtual Tax Filing

Virtual tax filing is available in the comfort of your home. We provide encrypted file uploading, virtual consultations, e-signing for tax documents and electronic filing of tax returns to the IRS and state agencies.

Virtual Consultations
Discuss your tax needs and questions with one of our local tax professionals via video conferencing, over the phone, or by email.

Document Upload
Through our secure and encrypted online portal, you can upload tax documents using your mobile phone, notepad, laptop or desktop computer. Contact us and we’ll send you a link where you can submit tax data; including file uploads, smartphone photos, and imports from your financial institutions.

Contactless filing
After your return has been prepared, we will send you your tax returns for review via DocuSign. After reviewing your return, you can e-sign your tax return and the signed forms are automatically sent to our office so we can electronically file your federal and state tax returns.
The IRS has extended the use of electronic and digital signatures for individual and business tax returns to October 31, 2023.

Enjoy our contactless filing service and feel free to contact us for more information.

Should You Consider a Roth Conversion?Retirement Planning / By M Jon BrownThe end of 2021 is nearing, and you are contem...
12/03/2021

Should You Consider a Roth Conversion?
Retirement Planning / By M Jon Brown
The end of 2021 is nearing, and you are contemplating tax strategies and planning how to minimize income tax liability for either this current tax year and/or future tax years.

You may have heard from financial institutions, friends and/or family encouraging you to convert a Traditional IRA into a Roth IRA.

Well, should you? The answer to this question will vary as each person’s tax situation is different. Below is some information for you to consider in your decision making process.

We can perform financial modeling to estimate the financial advantages or disadvantages from a Roth Conversion.

https://corridortaxes.com/roth-conversion/

Strategizing Your 529 PlanContributions to a 529 Plan such as College Savings Iowa can save you money on your state tax ...
11/04/2021

Strategizing Your 529 Plan

Contributions to a 529 Plan such as College Savings Iowa can save you money on your state tax return, but these contributions are not deductible on your federal tax return. Earnings on investments in 529 plans can be tax-free on both federal and state tax returns.

Particularly noteworthy is the difference between what is considered a Qualified Educational Expense for federal education tax credits and what expenses meet the criteria for qualified withdrawals from 529 plans.

For the education credits, such as the American Opportunity Credit and the Lifetime Learning Credit, the IRS defines Qualified Education Expenses as “Qualified expenses are amounts paid for tuition, fees and other related expense for an eligible student that are required for enrollment or attendance at an eligible educational institution.”1

In addition to these qualified education expenses, qualified withdrawals from 529 plans can be used to pay for students’ room and board while away at college (there are some limitations).

A strategized approach considers a taxpayer’s income and assets available to spend on education along with the scholarships, grants, and other financial aid available to the student. Using 529 plan withdrawals to cover room and board expenses that are not qualified educational expenses for federal education credits is part of the strategy.

Example: Student A has ½ of her tuition covered by scholarships and is attending at least half-time at an eligible educational institution. To benefit from state deductions for education, Student A’s parents are taking qualified withdrawals from the 529 plan to cover dorm and meal plan expenses and some of the tuition. The parents’ income falls below the income threshold for the American Opportunity Credit, and they plan to achieve the full credit of $2500 (100% of the first $2000 spent on qualified educational expenses and 25% of the next $2000 spent on qualified educational expenses) by spending $4,000 from their personal checking account on tuition and covering the gap in tuition from their 529 plan.

The American Opportunity Credit is used to offset any tax you may owe and up to 40% of the unused credit ($1000 max) can be directly refunded to the parents. In this manner Student A’s parents are able to be directly refunded $1,000 of the costs spent on tuition.

Example 2: Student B’s parents combined income exceed the income threshold for educational credits and they are unable to qualify for these credits on their federal tax return. So, Student B’s parents have taken long-term approach in maximizing their 529 plan contributions every year and benefitting from the earnings being tax free for qualified withdrawals.

For financial aid purposes, each eligible college and university has an established “cost of attendance” that includes not only tuition, books, and fees but also an allowance for room and board. I usually find this readily available on the college’s website. This in combination with filing a FAFSA application are the first steps in developing a financial plan for your student.

1. https://www.irs.gov/credits-deductions/individuals/qualified-ed-expenses

FAFSA Enrollment IS Now OpenThe Free Application for Federal Student Aid (FAFSA®) for the 2022-23 academic year became a...
10/26/2021

FAFSA Enrollment IS Now Open

The Free Application for Federal Student Aid (FAFSA®) for the 2022-23 academic year became available on 1 October 2021. Now is the time to take advantage of completing your student(s) application for priority consideration by the academic institution your student(s) are attending.

Here are the priority deadlines for Iowa’s state universities and Kirkwood Community College
• Iowa State University: January 3, 2022
• Kirkwood Community College: As soon as possible after October 1, 2021
• University of Iowa: December 1, 2021
• University of Northern Iowa: January 15, 2022

Your family’s financial situation may have changed since the last time your filed a FAFSA application and/or the constant revisions to federal tax forms now make it more difficult to find the information you need to complete the FAFSA application.

Feel free to visit www.corridortaxes.com and contact us for assistance.

We highly recommend that during the FAFSA application process to use the IRS Data Retrieval Tool to automatically upload required tax return information and to help eliminate errors.
Here is the information typically required for completing the FAFSA application, for both the student and parents:
• Social Security Number
• Filing status
• Federal income tax return and form filed (i.e. 1040, 1040SR)
• Earned and Unearned Income on a married filing joint return you’ll need the information separated by each parent)
• W-2s and other sources of earned income
• Unearned income records such as retirement income, alimony
• Investment income
• Untaxed income such as tax-exempt interest
• Amounts in checking and savings accounts
• Adjusted Gross Income amount for that year
• Wages income, cash, savings account amounts

The FAFSA application is used to determine and eligibility for federal grants, work-study, and loans but most colleges and universities use the Expected Family Contribution (EFC) in determining financial aid awards, grants and scholarships, from their own resources. Some of these resources funded by the state, are granted by private donors, or could be from the college direct.

Taxpayers Are Encouraged to Obtain IP PINs (Identity Protection PIN)This summer, the Internal Revenue Service Security S...
10/26/2021

Taxpayers Are Encouraged to Obtain IP PINs (Identity Protection PIN)

This summer, the Internal Revenue Service Security Summit partners issued a news release encouraging tax professionals to inform their clients about the IRS’ Identity Protection PIN Opt-In Program and how this can protect against tax-related identity theft.

An IP PIN is a six-digit number issued to the taxpayer and this number is known only by the taxpayer and the IRS and it prevents others from filing tax returns using your Social Security Number. This is a great way for taxpayers to protect themselves and to minimize delays in receiving refunds because someone else inadvertently or on purpose previously used their Social Security Number in filing a tax return.

When you receive the IP PIN letter from the IRS, please provide a copy to your taxpayer so they can electronically file your return. Please note that the IRS will never call, email, or text either taxpayers or tax preparers to request the IP PIN.

An IP PIN is only valid for one year and must be used when filing any federal tax return for the year the IP PIN is issued and a new IP PIN is generated each year. In the case of Married Filing Joint taxpayers, both spouses are encouraged to obtain an IP PIN. Dependents are also eligible to obtain IP PINs.

For more information and to obtain an IP PIN, visit the IRS page Get An Identity Protection PIN (IP PIN). Here you can use the IRS online tool to obtain an IP PIN or to retrieve your IP PIN if you lost the original IRS letter with your IP PIN. The online tool does require an account on IRS.gov, but you'll be prompted to create an account if you don't have one.

Feel free to contact us regarding any questions you may have about the IP PIN.

1. https://www.irs.gov/newsroom/security-summit-tax-pros-should-encourage-clients-to-obtain-ip-pins-to-protect-against-tax-related-identity-theft

Address

507 Koser Avenue
Iowa City, IA
52246

Opening Hours

Monday 9am - 6pm
Tuesday 9am - 6pm
Wednesday 9am - 6pm
Thursday 9am - 6pm
Friday 9am - 5pm
Saturday 9am - 12pm

Website

Alerts

Be the first to know and let us send you an email when Corridor Taxes posts news and promotions. Your email address will not be used for any other purpose, and you can unsubscribe at any time.

Contact The Business

Send a message to Corridor Taxes:

Shortcuts

Share

Category