Frequently Asked Questions

***  Notice!!!  ***

If you get a phone call or email supposedly from the IRS threatening to sue you, IT IS A SCAM.  The IRS will not call or email you, and will ALWAYS send you written notices of any problems with your account.  Please  hang up or delete the email.   And quit worrying!  

1. Why should I have a CPA prepare my taxes?

In most states, just about anyone can go into the tax-preparation business.  But, all preparers are not equal, just as a person with first aid training is not equal to a physician with years of training and multiple specialties.    I believe a CPA who specializes in taxation and has invested years in education and experience will give you the best result.

Most individuals do not want to, or cannot, spend the time they need to in order to be aware of the latest changes and the best strategies.  The fees you pay may easily be repaid to you (and then some) in taxes saved or mistakes avoided.

2.  How much will my return cost?

That is a difficult question to answer sight unseen.  The more time-consuming and complicated the return is, the more it will cost.  Providing complete, organized information will result in a lower fee.  Some returns may look simple but require significant research, analysis or strategizing to produce the best result.

A can of soup is the same whether you buy it at one store or another; comparing price is a reasonable thing to do.  But a tax return is something “built” based on data provided plus the knowledge and experience of the preparer.  I have seen countless instances of the “cheapest” return being the most costly — in deductions overlooked, data misinterpreted, questions not asked, complications not noticed or understood.

A “bare minimum” price will get you a “bare minimum” job, and if that’s what you are looking for … keep looking!

3.  How do I know my tax preparer is doing a good job?

You probably can’t know for sure.   You may have a warm, fuzzy feeling but not really have a correctly prepared return.  Maybe you should get a second opinion.    I have caught six-figure tax errors on returns prepared by high-profile firms.  Let’s take a look at yours.

4.  What sets you apart from other firms?  

There are many types of firms out there.  What I am not is a high-volume, mass-production, low-cost/low-quality type of firm.  I am also not a full-service,  “all things to all people” firm.  Rather, I am positioned in particular to serve the individual or small business with complex or unusual issues, especially those subject to the Alternative Minimum Tax.  But in all cases, every return (of any type) will get my undivided attention; I strive to identify “hidden” tax issues that may not be readily apparent.

Some firms see all returns as pretty much the same.  My approach is that they are each unique and deserve individual attention.  If there is a way to reduce tax on your return, my goal is to find it.

If you want a cheap price and don’t care if it’s done right or not, then go to one of the high-volume places.  (Not my recommendation!)  If you might be needing services I don’t offer, then look at the full-service firms.   If what I offer is what you’re looking for, give me a call!

5.  When should I consult with a tax advisor?

  • Before changing marital status (getting married or divorced)  Find out how  your tax situation will change.  There could be things you can do differently or at a different time to  change your tax liability.  If getting divorced, there are certain issues that should be spelled out in the divorce decree, that most attorneys will not think about.
  • If you have recently been widowed.  Changing from married to single can result in a surprising change to your tax liability.   Withholding (and your budget) may need adjusting.
  • Before moving to a different state.  Most states have an income tax; Texas does not.   Find out how this can affect you, whether you are leaving Texas or planning to come.
  • Before taking money out of a retirement account (IRA, 401k, etc) or moving money between accounts, ESPECIALLY if you have an account you acquired in a divorce property settlement.  There are rules you need to know about.
  • Before your child starts college – there are ways to maximize the tuition tax credits that are available.  And, there are special provisions that apply when parents are divorced.
  • Before your child gets a summer job – in most cases, income tax withholding will not be necessary; it can be avoided, usually eliminating the need to file an income tax return.
  • Before buying or selling a house.
  • Before paying your property taxes for the year — is paying in December better, or should you wait until January? (Did you know that it matters?)
  • Before you start drawing social security benefits.  (You may need to elect income tax withholding)
  • If you have a household employee, even just part-time  – you may be considered an “employer” and be required to remit payroll taxes and file Form W-2.
  • Any time you think something you are about to do could have a tax impact.

Have you noticed that usually it is best to call before, not after?  Too often, I am in the position of telling clients what they should have done.   If there are alternatives, let’s choose the best one ahead of time instead of just living with the result of what has already been done.

6.  The IRS accepted my return; therefore, it must have been correct.

Not necessarily.  The IRS computers will immediately catch certain mistakes, and eventually catch others.  But a great many errors can only be discovered on audit, and very few returns are examined.    Keep in mind that errors can go both ways – both for you and against you!   A professional preparer will strive to provide the best, and also the correct, result.

7.  But my friend’s neighbor’s uncle said…

Be careful where you get your tax advice!  Often there is a bit of truth about what has been passed along, but it is easy for a rule to be misinterpreted or important  factors to be left unmentioned.

8.  I got a notice from the IRS saying I owe money.  What should I do?

Please, do not automatically pay it.  In my experience, only about 30% of these are correct.  Please bring the notice in, along with the tax return it relates to, and we’ll take a look.

9.  I got a refund from the IRS that I wasn’t expecting.  What should I do?

Please do not deposit the check until it has been confirmed to be correct.  Bring it in along with the tax return that it relates to, and we’ll take a look.  It may be OK to cash the check or it may be necessary to return it voided.  If it turns out to be a mistake, and you cash the check, the IRS will demand it back anyway!   Then, you could even owe penalties and interest!

10.  Joe Blow CPA says he’ll find lots of loopholes for me. Will you do that?

The term “loophole” is overused, and in my opinion, is a bit cheesy.    Here is one of several good definitions that I have found:

“A loophole is an accidental technicality or unclear section of a written document that allows someone to avoid following a rule or fulfilling an obligation.”

What some practitioners really mean when they say “loophole” is “tax provision”.  They use the term “loophole” to give the false impression that you are getting deductions that other people aren’t, or that they somehow know secret rules the other thousands of practitioners don’t. There are precious few actual loopholes in our tax system (they get closed!), and most likely, none of them apply to you!  My advice is to stay away from a practitioner who frequently uses that term.

11.  I want my return done right, done cheap and done fast.

Choose one or two; you can’t have all three.  McDonald’s and Jack-in-the-Box are built for “cheap and fast”; I am not.  Your tax return deserves better.   I do not specialize in speed, although if you have a pressing need such as student loan application or a home purchase, I will do my best to accomodate you.  I’m not “cheap” either, but I am less expensive than the large full-service firms.

I have learned that just doing it right is the biggest money-saver out there.  I have obtained impressive refunds for folks who had significant errors on their returns that they were unaware of.  Let’s get yours done right the first time.


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