Tax basics
The questions clients ask most, answered plainly.
These are the topics that come up on calls every season. Read them before your appointment and you'll get more out of the conversation.
01Reading your return
Your Form 1040 tells one story in four parts: total income, adjustments that reduce it, deductions that bring it down to taxable income, and the tax on what's left. Credits come off the tax itself. Then your withholding and payments are compared to that tax. If you paid in more, you get a refund. If you paid in less, you owe. Line 11 (adjusted gross income) is the number lenders, aid offices and the IRS use most, so it's the one to know.
02Refunds & withholding
A refund is your own money coming back, not a bonus. A bigger refund than last year usually means more was withheld, a new deduction applied, or a credit changed. A smaller one usually means the opposite. If you want more in each paycheck instead of a large refund, we can adjust your W-4 after filing.
03Why refunds get held
The IRS screens returns before releasing refunds. Returns with refundable credits such as the Earned Income Credit or Additional Child Tax Credit are held by law until mid-February. Others are pulled for identity verification, or because the withholding on the return doesn't match what employers reported. A hold is not an audit. Most clear once you verify your identity or send the requested documents, and we help with both.
04Standard vs. itemized
Everyone gets the larger of the standard deduction or their itemized deductions. For 2026 the standard deduction is $16,100 for single filers, $24,150 for heads of household and $32,200 for married couples filing jointly. Itemizing only helps when your mortgage interest, state and local taxes, and charitable gifts add up to more. For most Florida renters, the standard deduction wins.
05Self-employed basics
If you receive a 1099-NEC or run a side business, you file Schedule C and pay self-employment tax of about 15.3% on your net profit, on top of income tax. Every legitimate expense lowers both. Keep a mileage log, separate your business and personal spending, and set aside part of each payment for taxes. Quarterly estimated payments prevent a large bill and penalties in April.
06Rental property (Schedule E)
Rent you collect is reported on Schedule E, along with the costs of owning the property: mortgage interest, property taxes, insurance, repairs, HOA dues, management fees and depreciation. Residential buildings are depreciated over 27.5 years, so a new roof is usually depreciated rather than deducted all at once, while fixing a leak is a repair. If your rental shows a loss, you may be able to deduct up to $25,000 of it against your other income when you actively manage the property, with that allowance phasing out between $100,000 and $150,000 of modified AGI. Florida owners renting for six months or less, such as vacation rentals, also collect state sales tax and county tourist development tax. Bring your leases, rent records, expense receipts and the closing statement from when you bought the property.
07Paying contractors
Starting with payments made in 2026, you issue a contractor a 1099-NEC when your business pays them $2,000 or more in the year, up from $600. The form is due by January 31. Collect a Form W-9 from every contractor before the work starts, even if you expect to pay less than $2,000, because jobs often grow. This matters most in construction, where subcontractors are often paid in cash. Track every cash payment with a date, amount and name, or the deduction can be denied.
08Help at home
A nanny, caregiver or housekeeper you direct is usually your household employee, not a contractor. If you pay one worker $3,000 or more in cash wages in 2026, you withhold Social Security and Medicare, give them a W-2, and file Schedule H with your return. Paying all household workers $1,000 or more in any calendar quarter also brings federal unemployment tax. Agencies that employ the worker handle this for you; a worker you hire directly does not.
09IRS letters
Don't ignore a notice, and don't pay it before reading it. Find the notice number in the top or bottom right corner (CP2000, CP14, 5071C and so on), note the response date, and upload it to the portal. Many notices can be resolved or reduced, and first-year penalties can often be removed with first-time abatement.
10Keeping records
Keep tax records for at least three years after you file. Keep them for six years if you may have left out more than 25% of your income, and keep records for property, investments and retirement contributions until three years after you sell or withdraw. Scanned copies are fine. Store them somewhere secure, not in your email inbox.
11Financial Dashboards / Your Year in Review
A tax return shows one year in one number. Your Year in Review shows where the money went month by month, built from your exported bank and credit card transactions (preferred) and/or consolidated monthly statements. Clients use it to plan for a home purchase, prepare for a lender, catch self-employed expenses they missed, and set realistic savings goals. Ask about it on your call.