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(302) 422-3640
Fax: (302) 422-5530

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Record retention

We frequently get asked how long our individual and business clients should keep their records and copies of tax returns. Here is our advice:


Most of the time our individual clients ask us which records are important. Here is a list of the most common records you need to keep:

  • Records of income received
  • Expense items, especially work-related expenses
  • Home improvement, sales, and refinances
  • Investment purchases and sales information
  • The tax basis of gifted and inherited property
  • Specific uses of loan proceeds
  • Significant, unreimbursed medical expenses
  • Charitable contributions
  • Interest and taxes paid
  • Records of nondeductible IRA contributions


The tax law requires all businesses to keep records to support the gross income, deductions, and credits claimed on their income tax returns.

All businesses should have a permanent set of books which summarize individual deposits, disbursements, and items of adjustment. These records should be retained indefinitely. Permanent records also include those needed to prove the basis (cost) of depreciable assets.

Additionally, supporting documents may be needed to validate the journal entries if your returns are examined by the IRS. The general rule is that supporting documents should be retained at least until the statute of limitations for a tax year have passed.

Our recommended retention periods are:

  • 7 years for: bank deposit slips, bank statements, cancelled or substitute checks, credit card receipts, employment tax returns, expense records, inventory records, paid invoices and tax returns
  • Contracts, corporate stock records, and financial statements should be permanent records of the business.
  • Depreciation schedules should be kept for the life of the asset plus 7 years
  • Employee records should be kept for the period of employment plus 7 years
  • Investment records should be kept for the ownership period plus 7 years
  • Journal and general ledger documents should be kept for the life of the business plus 7 years
  • Minutes of meetings should be kept for the life of the company plus 7 years
  • Real estate records should be kept for the ownership period plus 7 years
  • Home purchase and improvement records should be kept for the ownership period plus 7 years

For more information on record retaining, contact one of our staff members today. 

What is the SECURE Act?

On December 19, 2019, the President signed the SECURE Act. The SECURE Act stands for Setting Every Community Up for Retirement Enhancement and is a bill that includes significant provisions aimed at increasing access to tax-advantaged accounts and preventing older Americans from outliving their assets.

The most important points of the SECURE Act are:

  • The Act will make it easier for small business owners to set up “safe harbor” retirement plans that are less expensive and easier to administer.
  • Many part-time workers will be eligible to participate in an employer retirement plan.
  • The Act pushes back the age at which retirement plan participants need to take RMDs from 70 1/2 to 72 and allows traditional IRA owners to keep making contributions indefinitely.
  • The Act does mandate that most non-spouses inheriting IRAs take distributions that end up emptying the account in 10 years.
  • The Act allows 401(k) plans to offer annuities.
  • The Act will provide a maximum credit of $500 per year to employers who create a 401(k) or SIMPLE IRA plan with automatic enrollment.
  • The Act will enable businesses to sign up part-time employees who work either 1,000 hours throughout the year or have three consecutive years with 500 hours of service.
  • The Act will allow the use of tax-advantaged 529 plan accounts for qualified student loan repayments (up to $10,000 annually).
  • The Act will permit penalty-free withdrawals of $5,000 from 401(k) accounts to defray the costs of having or adopting a child.

For more information regarding the SECURE Act, contact one of our knowledgeable staff members today.


What is the difference between a TIN, a SSN, an ITIN and an EIN?


For business owners all of these identification numbers can be confusing, so we are going to break them down for you.

TIN – Taxpayer Identification Number

A Taxpayer Identification Number is an identification number used by the Internal Revenue Service (IRS) in the administration of tax laws. A Social Security number is issued by the Social Security Administration (SSA) whereas all other TINs are issued by the IRS.

SSN – Social Security Number

A Social Security Number is for U.S. citizens and “authorized non-citizen residents.” An example of an authorized non-citizen resident would be a green card holder or a student in the U.S. on a Visa.

ITIN – Individual Taxpayer Identification Number

An Individual Taxpayer Identification Number is for a resident with a foreign status. This includes undocumented aliens and non-resident aliens that conduct business in the U.S. An ITIN is only available to resident and non-resident aliens who are NOT eligible for U.S. employment and need the identification number for other tax purposes. You can identify an ITIN because it is a 9-digit number, beginning with the number “9” and is formatted like a SSN.

EIN – Employer Identification Number

An Employer Identification Number is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN.

Employers are required to have their employees complete an I-9, Employment Eligibility Verification Form, which attests to the individual’s eligibility to work. You will find a PDF or paper version I-9 Form here – https://www.uscis.gov/i-9

Employers can verify the information given on the I-9 form by using E-Verify, https://www.e-verify.gov/. While it is not mandatory for employers in Delaware to use E-Verify, it is a useful tool to assist employers with verifying the identity and authorization of individuals seeking employment.

Businesses using subcontractors are required to have the subcontractor complete a Form W-9 and obtain a copy of their business license and liability insurance upon hiring. You can obtain a pdf copy of the Form W-9 here – https://www.irs.gov/pub/irs-pdf/fw9.pdf


2020 Tax Season Letter

January 4, 2020

Dear Clients and Friends:

We hope 2019 was a happy and prosperous year for you. Now that it is January, it’s time to start thinking about gathering the information needed for the preparation of your taxes.

Last year, the provisions of the Tax Cuts and Jobs Act (TCJ) went into effect.  Many taxpayers were caught unaware of the many deductions that changed as a result of the TCJ.  The most significant change for individuals was the increase in the standard deduction and loss of the exemption deduction.  Most taxpayers received smaller refunds then they were expecting and, in some cases, they even had to pay.  Another new provision called the QBI deduction benefited some taxpayers who owned businesses, Partnerships and S-Corporations, but created confusion for owners of rental properties.  Some rental properties qualified for the new OBI deduction and some didn’t.  Guidance from the IRS has been sparse or nonexistent.  It is still an area of the new law creating more questions than definitive answers.   On December 20, 2019 the President signed a new budget that included some significant tax changes.   Many of the tax provisions are effective retroactively back to January 1, 2018.   As a result, we will be reviewing your 2018 return and may recommend you amend your 2018 return to take advantage of these provisions when appropriate.  

The IRS is giving the Form W-4, Employees Withholding Allowance Certificate, a major overhaul beginning January 1. The previous form estimated your appropriate tax withholding using an allowance system.The new form will no longer use allowances but instead ask you to account for all income, deductions, credits and potential changes to provide a more accurate forecast for your tax withholdings. Please reach out to us if you need any assistance completing the form.

When you have gathered all your tax information, please call our office to set up an appointment to meet with us to go over your tax information. You may also drop off or mail your information to our office if you do not wish to have appointment. This year, we are utilizing a new portal which gives us the capability to securely share QuickBooks backups and other documents along with electronic copies of your tax returns. If you are interested in utilizing our portal, please let us know and we will initiate this by sending you an invitation to utilize the service.

We look forward to hearing from you soon and assisting you with your tax and financial obligations. As always, contact us if you have any questions.


Starkey & Company, PA

2019 Year-end Newsletter

November 19, 2019

Dear Clients and Friends:

We hope you are enjoying the cooler weather of fall and are looking forward to the holidays ahead. With one year behind us of working with the new tax law, we have a better understanding of how the changes will impact your tax situation. Of course, tax law is always evolving so the tax year 2019 will bring its own set of changes.

Some of these changes are highlighted in the enclosed year-end edition of our newsletter. In the newsletter, you will find important information to consider before the end of 2019. For the tax year 2019, the alimony rules have changed. For the recently divorced, alimony is no longer a tax deduction for those paying it, nor is it income for those receiving it. Additionally, the threshold to deduct medical expenses as an itemized deduction has increased from 7.5 percent to 10 percent. The threshold increase means that less of your medical expenses will be deductible. A more positive tax change is that the portion of the Affordable Care Act that requires you to have health insurance or pay a penalty is suspended for now.

Tax planning is always important. The newsletter highlights some important items you should consider to ensure you are not missing something that could affect your tax situation. If you are 70 ½ or older, you will need to take your Required Minimum Distribution before December 31 if you haven’t already. You could face a 50% tax if you neglect to take the RMD before the end of the year. If you are a charitable contributor, you may want to consider making Qualified Charitable Distributions from your IRA to meet all or part of your Required Minimum Distribution. The charity must receive your donation by December 31 in order for you to apply it to your 2019 tax return. There are other last minute tips included in our newsletter that you could utilize to help your tax situation in these last few weeks of the year.

The IRS is giving the Form W-4, Employees Withholding Allowance Certificate, a major overhaul beginning January 1. The previous form estimated your appropriate tax withholding using an allowance system. The new form will no longer use allowances but instead ask you to account for all income, deductions, credits and potential changes to provide a more accurate forecast for your tax withholdings. Please reach out to us if you need any assistance completing the form.

For the first time in six years, contribution limits for retirement savings are increasing. Contribution maximums for 401(k) accounts and IRAs have increased by $500 for 2019. As you are aware, contributing the maximum amount allowable will maximize your tax savings and increase your future earnings potential. If you are 50 or older, remember to take advantage of the additional catch-up contribution amounts available.

In December, we will be attending more seminars to gain a better understanding of the tax law changes that went into effect in 2018. The IRS continues to issue regulations that clarify the new law and it is important for us to keep abreast of these changes so we can assist our clients with the best tax advice.

Please stop by our office to be introduced to our new CPA, Angel Hodges. Angel came on board in August and is excited to help us serve our clients and friends.

The months of November and December are a great time to evaluate your tax situation and review the options you have. If you have any concerns or questions, please don’t hesitate to call our office regarding the information contained in this letter or any questions you would like to address before the end of the year. We will be sending out our tax organizers in January. If you haven’t received one in the past but would like to, please call our office. As always, we appreciate your continued patronage and welcome the referrals of your friends and associates.

Happy Holidays,

Starkey & Company, P.A.

New CPA Announcement



Starkey & Company, PA, a Certified Public Accounting Firm in Milford, Delaware is excited to announce the addition of Angela M. Hodges, CPA to the firm. Raised in Greenwood Delaware, Angel feels a connection to the local area and the businesses that serve our communities. During her 16 year career, Angel has enjoyed helping clients with tax preparation, business consulting, payroll education, and record organization systems. Angel will be assisting clients with their individual and business tax needs. If you call or stop in, please say hello and help us welcome Angel to the firm. We are accepting new clients and look forward to continuing our mission of assisting each client in reaching their financial goals.


Summer 2019 Newsletter

June 17, 2019

Dear Clients & Friends:

School is letting out and the tourists are arriving, a definite sign that summer is upon us.  If you get a free moment between the hustle and bustle of kid’s activities, vacations, and work, please take a few minutes to read the enclosed summer edition of our quarterly financial planner.

Once your 2018 tax return has been filed, you will have a better understanding of the effects of the new tax bill. As you may have heard on the news, some taxpayers ended up owing on their tax return when they typically received a refund. While the overall tax may not have changed, the withholding tax tables generated by the IRS were incorrect and less was withheld from paychecks throughout the year. You can correct the withholding from your paycheck or retirement by completing a W-4 for employees and W-4P for pension and annuity recipients. Adjusting your withholding throughout the year can ease the burden of owing taxes when it’s time to prepare your tax return. If you need assistance with the Form W-4 or Form W-4P or if you expect any changes to your tax situation, please contact us so we can help you plan accordingly.

While discussing the new tax law, did you know that most states did not adapt the federal tax bill changes? The state of Delaware is an example. We remind our clients to still keep track of their itemized deductions as they can be used on your state tax return.

Please remember that the IRS will never contact you by email or by phone. It is important to not give anyone claiming to be from the IRS any information over the phone or through email. You do not owe these callers an explanation, simply hang up if they say they are from the IRS or report the emails to your spam. Identity and tax theft scams are certainly evolving and so are their tactics to get information from you. Please call us if you have any concerns that you may have answered one of these phone calls or emails and given your personal information to them.  

Important dates to remember for this quarter are June 17, July 31 and September 16. June 17 is the due date for the second installment of 2019 individual estimated tax, July 31 is the due date for filing 2018 retirement or employee benefit plan returns and September 16 is the due date for extending Corporate and Partnership tax returns and the third installment of estimated individual tax for 2019.

We are working faithfully to complete the tax returns we have on extension.  If you have not dropped off your 2018 information, please do so as soon as possible. During the busy tax season, we sometimes forget to tell our clients how much we appreciate their patronage. We enjoy interacting and assisting you with your individual and business tax and financial needs.  We appreciate any comments you have on the services we provide and welcome any referrals. If you haven’t already, please check out our website. We have recently made changes and welcome your feedback.


Starkey & Company, CPA’s

2019 Tax Season Newsletter

February 16, 2019

Dear Clients & Friends:

Here it is the middle of February and tax season is in full swing. We are meeting with our business clients to get started on corporate returns and many of our individual clients have received and are bringing their information in. In January, we mailed organizers to our individual clients.  If you did not receive one but would like to, please call our office today.

Enclosed, please find our quarterly newsletter. The spring edition, released during tax season, contains quite a bit of beneficial information. The newsletter has a new look. The company we used to get our newsletter from was bought out and this is the new offering we have selected.

As you know, the tax year 2018 is a year of change. The Tax Cuts and Jobs Act of 2017 signed into law on December 22, 2017 goes fully into effect for this tax year. The main focus of the new law was to reduce corporate tax rates from a high of 38% to a flat 21%. For individual taxpayers, tax rates declined on average by 4%. The biggest impact for individuals is what is deductible. The standard deduction basically doubled. It is $24,000 for married individuals and $12,000 for singles. The increase is offset by a loss of personal exemptions. Each exemption was worth $4,100, now the deduction is zero. For taxpayers that itemize, there are major changes. The deduction for state and local taxes is now limited to $10,000. Interest on Home Equity loans is no longer deductible and deductions for employee business and investment expenses has been eliminated. With all the changes to itemized deductions, many taxpayers will use the standard deduction at the federal level but will continue to itemize on the state level because the state did not increase its standard deduction.

After you digest the new laws’ effect on your 2018 return, we will talk about what to do in 2019 to take full advantage of the new laws’ provisions. Our newsletter contains information and ideas to help you manage your 2019 tax obligation. The 2019 retirement plan contribution limits have increased, so you may want to increase your pension withholding. These changes are detailed on the enclosed newsletter.

Did you know that the portion of the Affordable Care Act that requires you to have health insurance or pay a penalty will be suspended beginning with the 2019 tax year? You can still purchase insurance on the exchange and many taxpayers qualify for subsidies to pay part of the premium.

Additionally, if you pay alimony, beginning in 2019, it is no longer a tax deduction for those paying it. It will also no longer be income for those receiving it. This change only effects new divorce agreements.

Also, the standard mileage rate increased from 54.5 cents to 58 cents for 2019 for every business mile driven, 20 cents per mile for medical and moving miles and 14 cents per mile for miles driven in service of a charitable organization.

Please call our office for an appointment as soon as you receive all of your tax information.  We try to use the first-in, first-out method when preparing returns, so the sooner you bring in all your information, the sooner we will be able to prepare your return and get it back to you.  We are looking forward to meeting with you in the coming weeks and assisting you with your financial and tax preparation needs.

Thank you for your continued patronage. As always, we welcome any feedback you may have on the services we offer and we also welcome any referrals you may have.


Starkey & Company, PA


Phone: (302) 422-0108
(302) 422-3640
Fax: (302) 422-5530

Customer Portal