Minnesota Property Tax Refund

During the last few weeks of the legislative session, the legislature passed, and Governor Dayton signed, a bill that will provide additional property tax refunds for those that qualify.

For renters, the amount of the refund they will receive will increase by 6%, while homeowners will see a 3% increase.  There is no change in who is eligible for the refunds, just more money for those that already do.

For those who have already completed their property tax returns, nothing more needs to be done.  The Department of Revenue will recalculate the additional refund and send the correct amount along with a letter explaining the calculation. Property tax returns filed going forward will be correct from the outset.

The Department will also be sending letters to those taxpayers that appear to qualify for the refund but haven’t filed a 2011 or 2012 property tax return. We make a habit of checking to see which of our clients will qualify, but if you do get a notice from them, please let us know.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Best Practices for Organizing Your Tax Documents

As we approach the middle of January, many people have already begun to receive documents used to prepare their taxes.  We see people employ all kinds of different way of organizing documents to bring to us, some are great, while others could use a little nudge in the right direction.

Below are some best practices to use when you’re getting ready to see your tax preparer, or to prepare your taxes yourself.

  • Group documents by type, such as W2s, 1099’s, Mortgage Interest Statements (1098), etc.
  • Remember in some cases that your forms 1099 from investment companies may be included with your year end statement.
  • If your tax preparer provides an organizer, take the few minutes to fill out at least the question and answer section, as well as to check the demographic information to be sure it’s still up to date.
  • Take a few moments and summarize your charitable contributions into two totals, one for cash contributions and one for non-cash items, like clothing and household goods.  Be sure that you have receipts for the donations, but in most cases your tax preparer won’t need to see them.  The same can be done with medical expenses.
  • If you’ve gotten any tax notices during the year that you’ve not provided to your tax preparer, be sure to include a copy with your information.
  • You won’t need the statements from your employer-provided retirement plans, like 401(k) and 403(b) accounts.

By following the few simple tips above, you’ll make the preparation of your taxes, whether by a professional or yourself, a much smoother and more efficient process.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Is College Worth It?

For many years, there has been a certain expectation among those graduating from high school.  Whether it’s put on student by their parents, teachers, or themselves, the expectation is that once you leave high school that you will continue on to college, preferably a four year college and the eventual Bachelor’s degree.

In more recent years though, that nearly automatic decision to continue on in education has come under increasing scrutiny due to the cost of a college education.  Others believe they don’t need a college degree for their future career.  To that point, 57% of American workers reported that they do not need a college degree to do their jobs.

Since 1982, the cost of a college degree has increased a staggering 740%, while earnings of college graduates have increased just 145%.  More and more families are falling into the “financial aid gap”, finding themselves too wealthy to get much, if any financial aid, but without the resources to finance a college education.

This increase in costs has led directly to an unprecedented level of student loan debt for college graduates as they and their families try to finance an increasingly expensive education.   A recent survey of college graduates shows the average student loan debt to be $35,200.  Student loans are relatively inexpensive in terms of interest costs, but they are one of the most difficult debts to be relieved of.  Most cannot be discharged in bankruptcy, and many private loans require a creditworthy co-signer who can be left on the hook for the loans if they student fails to make the payments.

Due to the cost and hazards of taking on student loans, it’s important to weigh the monthly payments that will result from borrowing against the income the graduate can reasonably expect to make.  For example, taking on significant debt to attend an expensive private college in order to work in a rewarding though relatively low paying profession, like social work or the fine arts may not be the best use of resources.

Not all the news is bad when it comes to higher education though.  Those with a Bachelor’s degree make on average $1.1 million more than those with only a high school diploma, while those with a graduate or master’s degree make $1.4 million more.  Those with a college degree experienced an unemployment rate during the height of the last recession that was roughly half than those with a high school diploma, and routinely report they are more satisfied in their work than those without advanced education.  The benefits continue into retirement, where those with a college degree typically earn 3 to 4 times more in retirement than those without a college degree.

With pros and cons on both sides of the debate, the key is to shop around and know what you’re trying to get out of your education.  Private schools generally have smaller class sizes and more manageable campuses, but the cost of tuition is on average three times as much as a public school.  Many less expensive public schools have large campuses and larger student bodies, making it easier for a student to feel lost among their peers.

When a student it working to find the right college for them, it’s important to take a hard look at the economics of the decision in addition to the academic reputation of the school and how well the student feels they would fit in socially.  Once that balance is struck, they can undertake what for most is the most exciting and eye-opening time of their lives.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Happy Holidays From Ramsay & Associates!

As we enter the last week of the year, we’re busy working on year end tax projections and wrapping up other projects before the New Year dawns and brings with it the 2014 tax season.

We wanted to take a moment and thank all of our clients and the great communities of Mahtomedi and White Bear Lake for their support and patronage during 2013.  We’ve had a front row seat for the ups and downs of the economy over the last five or so years, and it’s great to see that things seem to be, at last, turning for the better.

There have been a bunch of changes around here over the last year; we spruced up the building, made a slight change to our name and a big change to our website, which is now found at ramsaycpa.com.  We have a couple new team members, and are poised to make 2014 even better than 2013, which was pretty great already.

From all of us at Ramsay & Associates, have a great holiday and a prosperous New Year.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Deadlines and Shutdowns

Extended individual tax returns are due a week from tomorrow, so if you are one of the few that we’ve not seen yet, we look forward to seeing you soon.

The effects of the Federal government shutdown are broad reaching, but as they relate to taxes the answer is a little murky.  The IRS is technically closed, so phones are not staffed, IRS offices are closed and any audits in progress are suspended until the government reopens.

That said, all filing and payment deadlines remain in effect, so all taxes need to be filed and paid as if the government was up and running.  All paper tax returns and payments made by check will be considered on time if postmarked by the due date.

The IRS will not, however, be issuing refund checks of any kind during the shutdown.

The system that sends out automated notices will also continue to run during the shutdown, so people may be put in the odd place of getting a notice but not being able to call the IRS and figure out how to resolve it.

We’ll keep track of what’s happening in Washington and bring you the tax related news as it becomes available.