| Just The FAQs, Ma'am! |
| Frequently Asked Questions |
| Why should I pay you to prepare my return when I am comfortable completing the task on my own? |
| The IRS listed the "Dirty Dozen" mistakes on individual tax returns in Internal Revenue Bulletin 2004-12 dated March 22, 2004. They are:
ALL of these items are routinely checked by tax professionals. You might also want to check out the Press Releases from the National Association of Tax Professionals [NATP] entitled Two Taxpayers Learn...Self Tax-Preparation Can Be Costly. This article clearly demonstrates how preparing a return yourself can be a costly mistake; however allow me to draw on my own experience as an IRS Tax Auditor. I routinely found taxpayers who had overstated their expenses or understated their income - which resulted in them owing additional taxes. If I found that the over- statement or under-statement was intentional then I would assess penalties such as the Accuracy Related Penalty [Section 6662] or the Substantial Understatement Penalty [Section 6662(b)]. Since the IRS routinely audits tax returns from about two years past, the additional tax and possible penalties can accumulate significant interest - as much as 25%. Isn't it better to spend a little now that have to spend a LOT later. |
| I have a friend who told me something I find hard to believe? |
| One of the most common reasons quoted by taxpayers sitting across the desk from me when I was a tax auditor was "I heard that..."; and I would always follow up their statement with "Did you get that from a tax professional?" The reason for the question is that the Number One exemption from the penalties noted above is that you "relied on the advice of a tax professional." However, when the taxpayer sheepishly admitted that they had "heard it" from their friend/family-member/barber/hairdresser/ mechanic/doctor/dentist/neighbor/etc., I would always follow up the statement with "My dad used to tell me that free advice from a non-professional is worth every penny you pay for it!" You might want to visit the NATP website and view the archived article, "Friends are Friends, Not Tax Advisors!" |
| One of the biggest problems with tax software programs is that it is only as good as the person using it. If you are comfortable with preparing your return each year, then a software program can help you file a more accurate return; however if you break out in a cold sweat when you even think about tackling your return then you're just burning money by thinking that the software will solve all your problems. You must also keep in mind that the software packages generally hit the retail shelves in December, but Congress routinely waits until the very last moment to pass tax changes. For instance, last year they resurrected some tax credits that were due to expire at the end of the year. Unfortunately the IRS had already sent the 1040 form to the printers and was distributing it. So the lines that those former credits used to be reported on were gone. Now, the IRS had to scramble to come up with a method to allow taxpayers to claim the credits. If you had already purchased your tax software, it did not automatically make the correction. You may want to visit the NATP website and check out the article entitled "Tax Software – What Do You Really Get in That Box?" for additional enlightenment. There's also an old adage that says "You get what you pay for." As of January of 2007 Staples.com offered TurboTax® software ranging from $19.99 for the basic program to $89.99 for TurboTax Business®. Now compare this to the cost of professional tax software programs. My package cost me $790.00. Also, isn't it just a wee bit hypocritical that Intuit offers TurboTax® AND two different professional programs at the same time? And what about the other leading tax software package? TaxCut® ranged from $19.99 to $74.99 at Staples.com. Why do I include this program? Because it is brought to you by the "people" at H & R Block. It seems to me that these "People" just want to get into your "Pocketbook" and will do so by any means "Possible." We say, "Why settle for people when you can get a Pro?" |
| Why should I pay you when I can just purchase tax preparation software? |
| Absolutely! Any return that we have prepared is 100% guaranteed. If you are audited and owe additional money, we will gladly reimburse you for the entire amount of penalties and interest. All we require is that you allow us to accompany you to the agency before you sign their report. Whether you use my services or that of another tax professional it is imperative that you ensure they offer some form of guarantee. If they don't, you should do an immediate about-face and run as fast as you can. As with any other industry, there are a few Bad Apples who give the rest of us a "black eye." Always ask for references. I have several clients that have offered to serve as references if I need them. There are also businesses out there that sell Audit Insurance packages that will pay you up to a specified amount if you are audited and end up owing additional tax. |
| But the software I purchased has a guarantee. Do you offer a guarantee? |
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| What is it going to cost me? What do you charge? |
| This really IS the bottom line with some folks...and it's the hardest question to put an answer to; because there can be so many variables between one return and another. Most of the Tax Shacks [H&R, Jackson Hewitt, etc.] charge by the form [and one is reported to be charging by the line now]. Most CPA firms charge by the hour. I use elements of both methods. I usually charge $75.00 for a Federal 1040 form and $25.00 for a state return. I bill out at $65.00 per hour and charge a 1-hour minimum. So I suppose the answer to the question is that the average cost is $165.00...but this figure can go up [additional Schedules, Forms, Attachments, etc.] or even the other way [I charge less to do the easier forms] and offer discounts. Let's discuss it and find what you're comfortable with. I'd rather discount my prices and gain a customer than to lose you to a competitor with a lesser price. |