Wednesday, January 28, 2009

Who Counts As a Dependent?

I thought I would share this tip I received from TurboTax:

Who Counts as Your Dependent /Tax Deduction? You Might Be Surprised

Tax season is when we look at our family and friends in a different – and tax-deductible – light.

Can I count my sister-in-law as a dependent? How about my live-in girlfriend and her unemployed brother? What about my golden retriever?

Believe it or not, the IRS code tells us that any of the above, except the retriever, could qualify as a dependent under the right circumstances.

Why are dependents good to have at tax time?

For each dependent you can legally claim, you get a $3,500 deduction on your 2008 taxes. So if you are in the 25 percent tax bracket and have three dependents, worth $10,500 in deductions, you could save $2,625 on your taxes. (However, for some higher-income earners, deductions are reduced.)

In our society, where growing numbers of people live together who aren’t married or aren’t related, it’s good to know the rules. And if economic realities mean that you've had grown children move back home with you, or that you've extended financial help to a family member, you could get a tax break.

The following guidelines only apply to adult dependents. (The IRS has all sorts of rules for dependent children, particularly those whose parents are divorced. For information, see IRS Publication 504: Divorced or Separated Individuals.)

If you claim an adult as a dependent, that person must meet several IRS qualifications:

· Had less than $3,500 of gross income during 2008.

· Received more than half of his or her support from you for the year.

· Did not file a joint income tax return for 2008 with anyone else.

· Is a citizen or resident of the United States, or a resident of Canada or Mexico.

· Is a member of your household for the full year, or a relative who does or does not live with you.

As you can see, this last requirement opens your door - and your tax return - to many potential dependents, as long as you’re willing to support them.

So, to use our initial example, your live-in girlfriend and her brother who also lives with you could count as your dependents, if they meet qualifications.

But what if you support someone who doesn’t live with you, such as your elderly mother?

The IRS allows you to count as a dependent a whole list of relatives who don’t also have to occupy your home, as long as you provide more than half their annual support:

  • Children, stepchildren, eligible foster child, grandchildren or great grandchildren
  • Siblings, including half or step siblings
  • Parents, grandparents, or any other direct ancestors
  • Stepparents
  • Aunts or uncles
  • Nieces or nephews
  • Fathers-in-law, mothers-in-law, sons-in-law, daughters-in-law, brothers-in-law, or sisters-in-law

Unfortunately, your golden retriever is not among these. Nor is your gardener or house cleaner, even though it might seem you support them. They’re your employees, not your dependents.

Wednesday, January 14, 2009

From the IRS - what Tax Records to keep

I have found an article from the IRS on what Tax Records to keep. Don't forget that you can digitize these records and take up less space with your paperwork. Your tax records can be digitized to a PDF and put on a CD or a flash drive. SD Virtual Assistant can help you with that. Digitize those records!

Here's the article:

What Tax Records to Keep

You probably already keep records in your daily routine. This includes keeping receipts for purchases and recording information in your checkbook. Keeping these and other records will help you avoid headaches at tax time. Good recordkeeping will help you remember the various transactions you made during the year, which in turn may make filing your return a less taxing experience.

Records help you document the deductions you’ve claimed on your return. You’ll need this documentation should the IRS select your return for examination. Normally, tax records should be kept for three years, but some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.

In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return:

  • Bills
  • Credit card and other receipts
  • Invoices
  • Mileage logs
  • Canceled, imaged or substitute checks or any other proof of payment
  • Any other records to support deductions or credits you claim on your return

Good recordkeeping throughout the year saves you time and effort at tax time when organizing and completing your return. If you hire a paid professional to complete your return, the records you have kept will assist the preparer in quickly and accurately completing your return.

For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on or by calling 800-TAX-FORM (800-829-3676).


  • Publication 552, Recordkeeping for Individuals ( PDF 61K )
Christie Pegoda
SD Virtual Assistant
phone 501-205-4083
fax 888-243-0865

Monday, January 12, 2009

Be Aware of Suspicious E-Mails

This is a timely tip from the IRS that I thought was too important not to pass on.

Be Aware of Suspicious E-Mails

Be aware of e-mail scams that fraudulently use the IRS name or Logo as a lure. The goal of the scam is to trick people into revealing personal and financial information, such as Social Security, bank account or credit card numbers, which the scammers can use to commit identity theft and steal your money.

The IRS does not send unsolicited e-mails about a person’s tax account or ask for detailed personal and financial information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.

If you receive an e-mail from someone claiming to be the IRS or directing you to an IRS site,

  • Do not reply.
  • Do not open any attachments. Attachments may contain malicious code that will infect your computer.
  • Do not click on any links. If you clicked on links in a suspicious e-mail or phishing Web site and entered confidential information, visit our Identity Theft page on

You can help shut down these schemes and prevent others from being victimized. If you receive a suspicious e-mail that claims to come from the IRS, you can forward that e-mail to a special IRS mailbox, The e-mail must be forwarded using special instructions at, or it loses the encoding needed to track it to its source. The IRS can use the information, URLs and links in the suspicious e-mails you forward to trace the hosting Web site and alert authorities to help shut down the fraudulent sites. After you forward the e-mail to us, delete the message.

Remember that all of the web page addresses for the official IRS website,, begin with Don' t be confused or misled by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is

SD Virtual Assistant can help you with your tax needs.

Christie Pegoda
SD Virtual Assistant
phone 501-205-4083
fax 888-243-0865

Friday, January 9, 2009

IRS Presents: Top Ten Tax Time Tips

This is a timely reminder from the IRS website. Don't forget - SD Virtual Assistant offers tax preparation if you don't want to or don't feel qualified to do it yourself and we offer competitive rates.

Coming later this month - you will be able to efile with SD Virtual Assistant!

IRS Presents: Top Ten Tax Time Tips

1. Gather your records…now! It’s never too early to start getting together any documents or forms you’ll need when filing your taxes: receipts, canceled checks, and other documents that support an item of income or a deduction you’re taking on your return. Also, be on the lookout for W-2s and 1099s, coming soon from your employer.

2. Find your forms. Whether you file a 1040 or 1040-EZ, you can download all IRS forms and publications on our Web site,

3. Do a little research. Check out Publication 17 on It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return. Review Pub 17 to ensure you’re taking all credits and deductions for which you’re eligible.

4. Think ahead to how you’ll file. Will you prepare your return yourself or go to a preparer? Do you qualify to file at no cost using Free File on Are you eligible for free help at an IRS office or volunteer site? Will you purchase tax preparation software or file online? There are many things to consider. So, give yourself time to weigh them all and find the option that best suits your needs.

5. Take your time. Rushing to get your return filed increases the chance you will make a mistake and not catch it.

6. Double-check your return. Mistakes will slow down the processing of your return. In particular, make sure all the Social Security Numbers and math calculations are correct as these are the most common errors made by taxpayers.

7. Consider e-file. When you file electronically, the computer will handle the math calculations for you, and you will get your refund in about half the time it takes when you file a paper return.

8. Think about Direct Deposit. If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than waiting for a check by mail.

9. Visit often. The official IRS Web site is a great place to find everything you’ll need to file your tax return: forms, tips, FAQs and updates on tax law changes.

10. Relax. There’s no need to panic. If you run into a problem, remember the IRS is here to help. Try or call our customer service number at 800-829-1040.

Christie Pegoda
SD Virtual Assistant
phone 501-205-4083
fax 888-243-0865

Tuesday, January 6, 2009

Tax Season is almost upon us! Are you ready? I can help!

I am sure you haven't forgotten that Tax Season is just around the corner. If you need help in getting your books together for the preparation of your federal and state (if that applies) taxes and/or have someone prepare the forms, I can help. I have over 12 years experience in preparing federal and state income tax forms and over 25 years experience in bookkeeping.

Give me a call today or send me an email and I will give you a quote for preparing your books and/or preparing your tax forms. Tell me how many transactions a month you usually have, and I can give you a quote for the bookkeeping. The tax preparation will depend on how many forms you need prepared.

I have a Tax Organizer in pdf form that can be downloaded at If you would like a Word version of the organizer, please email me at with "Tax Organizer" as the subject.

I look forward to speaking with you. Your information will remain confidential. I value your privacy.

Christie Pegoda
SD Virtual Assistant
phone 501-205-4083
fax 888-243-0865

Friday, January 2, 2009

Are You Ready to Make Your Financial Dreams Come True in 2009?

Are you ready to make your financial dreams come true in 2009? SD Virtual Assistant wants to help you achieve your financial goals and dreams. I offer accounting and clerical services that fit your needs.

Answering Service - answer your calls with a personalized greeting to take messages and/or orders

Bookkeeping services - including Accounts Payable, Accounts Receivable, Income Statements and Balance Sheets

Tax Returns - Federal, State, Sales Tax, Payroll Tax or information forms

Digitize your records or receipts - reduce clutter and keep your records organized

Payroll - Prepare payroll checks, federal tax deposits and quarterly and annual reports and forms

Website Maintenance - make changes to your website as needed. I am not a web designer, but I can make changes to add or delete items on your pages and/or upload items to your ecommerce site

Clerical and Correspondence - type up forms, letters, whatever you need prepared

As a small business person, you may be trying to do it all : sales, production (or finding products), clerical, marketing, etc. I can provide the services you need on a monthly basis or a one time contract. Give yourself the gift of time and delegate the mundane chores to me. Spend less time on the paperwork and more time promoting and growing your business.

Visit the site - or give me a call at 501-205-4083 to discuss your needs.

Christie Pegoda
SD Virtual Assistant
phone 501-205-4083
fax 888-243-0865