How do you find a tax preparer that is right for you?

First, not all tax preparers are the same. I wrote an article about this last year titled: Tax Returns: Are They All Created Equal?

HOW DO YOU FIND A TAX PREPARER THAT IS RIGHT FOR YOU?

First, not all tax preparers are the same. I previously wrote an article about this last year titled: “Tax Returns – Are they really all created equal”, and you may be as surprised as other readers about just how much tax return preparation can vary.

In fact, I calculated the average savings I typically find from annual tax savings, reducing professional fees and audit assessments. In total, the average savings are:

– $23,750 Annual tax savings

– $5,000 Audit defense savings

– $10,000 Reduced audit assessment savings

– $50,000 Reduced legal fees

– $3,000 Reduced tax return preparation fees

This is a total average potential savings of $91,750! Your tax preparer does make a difference! How much more could you do with these savings?

Second, the right tax preparer for you depends on what is important to you. Take a minute to answer this question:

WHAT MAKES YOUR TAX RETURN SUCCESSFUL?

How you answer this question will impact what type of tax preparer you need on your team. I’ve asked this questions to clients, prospects and colleagues. I have compiled the most popular answers and what it means to you as you find the tax preparer for your team.

ANSWER #1: Paying the least amount of tax legally

Your tax preparer needs to:

– Know the tax law very well and know how to be creative legally.

– Ask you a lot of questions about your situation in order to understand your situation and goals.

– Have a review process where at least one other person reviews your return solely for the purpose of how to reduce your taxes legally.

HERE ARE SEVEN (7) QUESTIONS YOU SHOULD ASK YOUR TAX PREPARER TO DETERMINE IF IT’S A GOOD FIT:

Q1: Can you tell me about the other ___________ (your industry) you service?

A: Your tax preparer needs to know how the tax law applies to your situation. Having other clients in your industry or with similar investments indicates that the tax preparer is likely to be familiar with the tax laws that impact you.

Q2: Who will be working on my tax return?

A: It’s very common (and a good business practice) for tax preparers to have staff prepare your tax return. You want to make sure the other people working on your return have the same level of expertise.

Q3: What is your tax return review process?

A: Tax preparers who are focused on reducing your taxes will have this built into their review process. Usually it involves having another experienced tax preparer review the return solely for the purpose of finding ways to reduce your taxes.

Q4: What would you have done differently on my past tax return?

A: Show the tax preparer you are interviewing your prior year tax return. Creative tax preparers will be able to give you at least one idea of what you can do to reduce your taxes by looking at your tax return for just a few minutes. If it’s creativity you are after, this is a great question to ask! But don’t expect the tax preparer to give you all the details right then and there – that’s why you pay them!

Q5: How much can you save me in taxes?

A: While it’s difficult for any tax preparer to answer this in just a few minutes of looking at your past tax return, it is possible for them to know if they can save you taxes after spending 30 minutes with you.

Q6: What deadlines do you impose on clients?

A: This may seem like an odd question for minimizing your taxes but it has a direct impact. If your tax preparer allows you to provide your information a week before the tax return is due, it’s very unlikely that the tax preparer will have the time to focus on your return to truly minimize your taxes. Tax preparers that want to reduce your taxes want your tax return information early and will communicate that to you.

Q7: What recent tax law changes should I be aware of? A: To minimize your taxes, your tax preparer needs to know the tax law inside and out, which includes the latest changes. Your tax preparer needs to be able to answer this question without hesitation.

ANSWER #2: Minimizing tax return preparation fees Your tax preparer needs to:

– Focus on the tax work and recommend someone else for the non-tax work (such as bookkeeping).

– Request tax information in a certain format.

– Require you to input your information online.

HERE ARE TWO (2) QUESTIONS YOU SHOULD ASK YOUR TAX PREPARER REGARDING MINIMIZING RETURN PREPARATION FEES TO DETERMINE IF IT’S A GOOD FIT:

Q1: What can I do to reduce my tax return preparation fees?

A: To minimize your tax return preparation fees, your tax preparer always needs to have your fees in mind. Ask your tax preparer what you can do to reduce your fees. If you don’t get at least 2 suggestions, your tax preparer probably isn’t thinking about how to keep your fees low.

Common suggestions include:

– Have someone other than the tax preparer do your bookkeeping. I am always skeptical when a tax preparer does the bookkeeping. First, they either charge an arm and leg or if they reduce their rates to accommodate you, it means they don’t spend their time entirely on tax issues, which could indicate their tax skills aren’t up to par.

– Organize your information. Don’t bring your tax preparer a shoebox! A tax preparer that is really focused on keeping your fees down will have forms, spreadsheets and other tools available for you to use to organize your tax return information.

– Enter your information online. Many tax preparers now require clients to input their information online. Accurately entered information can help reduce fees. Caution: Information that is entered inaccurately can increase your fees!

Q2: What is your fee structure?

A: Your tax preparer needs to be able to answer this question with confidence. Any wavering could indicate that the tax preparer knows the fees are too high for you but just doesn’t want to tell you. Unfortunately in these situations, you find out too late!

ANSWER #3: Reducing audit risk Your tax preparer needs to:

– Know the tax law very well and how to properly report your activity.

– Understand the IRS’s current “hot buttons” or “red flags.”

– Offer an audit defense plan.

HERE ARE FOUR (4) QUESTIONS YOU SHOULD ASK YOUR TAX PREPARER IN REGARDS TO REDUCING AUDIT RISK TO DETERMINE IF IT’S A GOOD FIT:

Q1: How many audits have you been through and what triggered the audit?

A: The most important part of this question is what triggered the audit. If it was triggered by how something was reported, then that may be something the tax preparer had control over (and may be a bad sign for you).

Q2: What was the outcome of the audits you have been through?

A: A return can be randomly selected for audit or selected because of a certain activity (even though it was reported correctly). So it’s important to understand the outcome of the audits. Was additional tax assessed or were there no changes? Additional tax may indicate that something was not reported properly.

Q3: Do you offer an audit defense plan?

A: Tax preparers that are confident in their work will offer an “insurance” program that covers their professional fees to handle your audit if your return is selected for audit.

Q4: What is your tax return review process?

A: Although tax returns can be selected randomly for audit, many are selected due to how items are reported on the tax return. Tax preparers who are focused on reducing audit risk will have a review process that includes another tax preparer reviewing your return solely for accuracy of reporting.

Be selective with the tax preparer you put on your team. The average savings I find for my clients is over $90,000! Your tax preparer makes a difference!

Starting an online business can seem overwhelming at first. Finding the right domain name, getting reliable hosting, web design, and figuring out credit card transactions are full-time concerns. One often-overlooked component is taxes. If your website is selling something tangible, you are required by law to report it. Leafing through the myriad of tax rules and regulations is frightening, and some just ignore it altogether (at the risk of being audited). However, if you want to save yourself from future headaches and lawsuits, it’s best to get everything straightened out as soon as possible.Do I need a tax ID number?An Employee Identification Number (sometimes called Federal Tax ID number) is a nine-digit number assigned by the IRS that identifies your business to the government. You will need to get one if one or more of these apply:1.You pay wages to any employees.2.Your business is a corporation or partnership.3.You file pension or excise tax returns.If you are the only employee for your business, then you can run your business as a Sole Proprietorship entity, and use your Social Security Number as your EIN. However, you should look at all of the business structures before you decide which one is right for your business.What are my business entity options?A Sole Proprietorship is the most common for an upstart online business. It is owned and maintained by one individual, and has no existence apart from that individual. All the income and expenses are on your personal tax return (form 1040). It is the simplest form of business. However, you are personally liable for your company’s liabilities. If someone sues your business or your business gets too far into debt, your personal assets can be seized.A Partnership involves two or more people who share the profits, or losses, of the business. It’s just like a Sole Proprietorship, except you need an EIN. Also, profits, losses, and liabilities are split between the partners. A Corporation is a separate legal entity from the individuals who started it. It can be taxed and is legally liable for what it does. The benefit of a corporation is that its corporate status does not hold the employees liable. The downside is that it is expensive to start, and requires a lot of bookkeeping.A combination of a Corporation and a Partnership is the Limited Liability Company (LLC). The advantage is that the profits and losses are passed to the owners without taxing the business itself, and the owners are not personally liable. However, there is no stock, fewer incentives, and loads of paperwork.As you can see, there are pros and cons to each business structure. It is highly recommended that you talk to a local accountant or lawyer as to which structure best fits your needs.What other forms and taxes do I need to worry about?Business LicenseThere are many types of licenses, and even for an online business you will probably need one to operate legally. If the business is located within the city limits, then your license comes from the city. If you are outside the city limits, the license comes from the county.Fictitious Business NameIf your business uses a name other than your own, then it is required by the Trade Name Registration Act for you to register the fictitious name (which is also known as D/B/A, doing business as). It verifies that you and your business are one and the same. Depending on where you live, the form is usually filed at the county clerk’s office.TrademarksDomain names are a large part of your internet business, and protecting it is essential. A trademark identifies the source of goods or services to the consumers. You cannot register a domain name by itself, because just the name is merely an address. However, your online business name can be trademarked if it provides a service to consumers, such as booking flights, research on parenting, comparing insurance companies, etc. If you create items that you sell on your website, those product names can be trademarked.To learn more about trademark rules, go to www.uspto.gov.Sales TaxEach state issues a sales and use tax which applies to the use or consumption of tangible personal property and certain services. If you sell something tangible, tax must be collected. However, if you sell an e-book, it might not have to be. A sales tax number is required for each business before opening, and the rules are different in every state, so this is something you need to look into. I live in Missouri, and according to Missouri state law, I am subject to sales tax if the product’s shipping and delivery points are both in Missouri. However, your state might be different.Self-Employment TaxSelf-employment tax (SE tax) is for individuals who work for themselves, and is a social security and Medicare tax. You must pay the SE tax and file Schedule SE on Form 1040 if your net earnings from self-employment equaled or exceeded $400. To figure your net earnings, multiply your total earnings subject to the SE tax by 92.35%. You will be taxed 15.3% on the net earnings.What can I deduct?As far as deducting part of your home as a business expense, that only works if that part of your home is exclusively for business. If your computer and desk are in the living room, that square footage cannot be deducted. To deduct a part of your home, it must meet one of the following criteria:1.Your principal place of business2.You meet or deal with customers or clients in this area as a normal part of your business.3.An unattached, separate structure used in connection with your business.There are also a few other small requirements. The only exceptions are for day-care providers and the storage of inventory or product samples used in your business. If you buy a computer and over 50% of its use is for the business, you can deduct the depreciation on the portion of your computer used for business as a miscellaneous itemized deduction. Expenses such as web hosting, domain registration, etc, can all be deducted as business expenses. Some rules vary from state to state and even county to county, so be sure to stop by your local county clerk’s office or talk to other home businesses in the area to ensure everything is compliant. For more information on rules and taxes, go to www.irs.gov and www.ftc.gov.

byAlma Abell

As the end of the year closes, many businesses as well as individuals are starting to shift their attention towards tax preparation. This can be an extremely hectic and confusing prospect. Regardless of how difficult or how confusing it can be, there’s nothing changing the fact that taxes will need to be prepared very soon. For that reason, many people look to Tax Preparation Services in Brooklyn as a way to relieve some of the stress and the frustration of having to handle their own taxes.

There’s no question that the tax code gets more complicated every year. For people who are filing basic 1040 tax return forms, there’s typically not a great deal of confusion or difficulty. Unfortunately, it doesn’t take expansive financial dealings to create a very confusing tax situation. With different rules regarding investment earnings, deductions and with people tying up their personal finances into their businesses, professional tax preparation is something that many many people wouldn’t be able to do their taxes without.

Not only can Tax Preparation Services in Brooklyn help to file your taxes in a timely fashion, these tax preparation services can also help you to save some money as well. Many times, individuals who aren’t experienced with tax issues miss different opportunities to take various deductions. This can significantly limit the amount of taxes an individual or a business owes. Fortunately, the experts that work at tax preparation services understand the various opportunities an individual or a business has for different deductions. They can take full advantage of these issues to help reduce the amount of money that is paid, or to maximize the amount of a refund an individual is owed by the government.

As you can see, there are many benefits to using a professional tax preparation service. There are far more benefits than can even be mentioned in this particular article. However, if you are concerned about tax time rolling around whether your taxes are extremely simple or extremely complicated, you may want to consider a tax preparation service. If you’re looking for more information on these types of services, your best option is to simply click here to know more.

May, 2017 byadmin

Every April many people dread the tax deadline day. Some people may ignore their taxes and hope they go away. This will lead to penalties and fines. Other people work on their taxes, but also develop more gray hairs as they struggle through the complex tax codes. Feelings of dread and gloom do not have to be a part of every April. Hiring a CPA to take care of taxes will relieve you of the tax preparation burden and bring confidence that your taxes are done right. Additional benefits of hiring a professional include getting expert tax advise, saving money, and saving time.

A CPA is an expert in the tax codes. This professional will know how to get most out of each situation. A CPA will also be able to provide advise on how to save more money on taxes in the future. This advise may include how much to contribute to a health savings account, how to claim expenses such as child care, and how to qualify for other deductions.

Investing in Income Tax preparation in New York City will save you money in the long run. A CPA will make sure you are getting all of the deductions that you are entitled to in the tax code. The advice you receive can also save you money in years to come. Although circumstances and situations vary, you may be able to save thousands of dollars by hiring a tax professional.

If you have a single job, have no dependents, and do not have any deductions you probably do not need to hire a tax professional. The 1040EZ is fast and simple to complete. Dependents, deductions, multiple income sources, an investment income, or self-employment all add complexity to a tax return. Complex taxes take time to work through and file. An experienced professional will be able to complete the task efficiently, saving you time.

A tax professional can relieve you from the burden of tax paperwork and hours of searching through tax codes. Also, a CPA will save you money by maximizing your tax benefits and time by completing the tax paperwork efficiently. For more information on Income Tax preparation in New York City visit Rawcpa.com.

byadmin

From time to time, all local businesses need to consult with a business law DeKalb IL attorney. Issues including employment, taxes, leases, vendor negotiations, debt settlements or collections, and partnership squabbles can be handled expertly by an experienced business attorney. Unfortunately, most small businesses wait until there is a crisis prior to developing a relationship with an attorney. These crises can adversely affect the bottom line of the business not only financially, but as a chief distraction to owners and managers. In DeKalb IL, there are several business law attorneys to choose from to help navigate your business’ legal challenges.

Debt Collection

If one of your clients owes you money from a past due bill and you have been unsuccessful in collecting, it is time to consult with a business law attorney in DeKalb. Often times, a strongly worded letter from your attorney can do the trick in receiving full payment or establishing an equitable payment plan. Small claims court, mediation, and arbitration can be used for smaller claims; however it is advised that you seek legal representation to help you secure the funds that are rightfully due to you.

Debt Consolidation

If your business is struggling to make ends meet and debt payments are paralyzing your business growth consultation with a business law attorney can help to ease your current financial situation. Today, many businesses and organizations are willing to negotiate debt consolidations to help you and your business thrive during this tough economic climate. A business law DeKalb IL attorney can help you navigate through the process of consolidating your debts and ensuring your business’ economic viability.

Employment

If you are in presently in a wage, benefit, or other dispute with a current or former employee, doesn’t delay in contacting an attorney. Employment laws vary greatly by state, and a local attorney in your area that has experience in business employment law must be your first call. Additionally, if is wise when setting up a business to consult with a business law attorney that will help you create the policies within your business and protect you from future employment challenges. An understanding of both state and federal labor laws is vital to your business’ long-term success.

It is recommended that small businesses establish a relationship with a business law attorney from the beginning. However, many wait until a crises drives them to find a qualified attorney. When selecting an attorney it is important to remember that this is a relationship that often times can last for months, or years. Good communication is essential to the effectiveness of the relationship. Ask friends, colleagues and your professional network for recommendations and research each fully. During your initial consultation, ask about billing practices, hourly rates, and additional fees.

The sooner you get the details out of the way, the sooner you will have legal representation. While you have many choices for business law attorneys, look for developing a relationship with one that has expertise, great communication skills, and fair rates.