| |
| |
|
Taxes Information |
|
|
|
Surprising Truths About Tax Preparers
Choosing the right tax preparer for your business is a decision best not left until April. A former tax preparer and small business mastermind offers insights into the secret world of tax preparers. 1. All tax preparers are not created equal. It stands to reason, somewhere in the country is the Worst Tax Preparer. The bad news is you may have already booked your appointment with him. Preparing taxes is a complex activity. So complex that many of us simply throw in the towel, pack up our receipts, and head for the nearest tax office. When you arrive at the office, you fully expect our tax preparer to be highly competent and completely vested in getting you the best deal in town. Back in my tax preparing days, I worked for one of the big name tax preparation franchises both as a preparer and as a tax return editor. I worked with seasoned professionals and total neophytes. I well remember the first time I stepped up to the plate as a new preparer. I was terrified. Terrified the customer would know I was inexperienced. Terrified I'd make a huge blunder and the customer would pick up on it. Terrified the more experienced preparers would laugh at my mistakes. I quickly realized that as inexperienced as I was, I still knew way more than my clients did. And because the franchise had great systems, others would be checking and re-checking my work so my mistakes and oversights would be caught before I did any damage to the client. As a tax return editor, I saw and corrected more mistakes than you would feel comfortable knowing about. Which brings me to a very important point, tax preparation is not a cut and dried, read the manual, do the formulas, follow the instructions, and poof! you're done kind of activity. The tax codes in this country are complex and open to interpretation. Tax preparers have a wide range of experience from none to grizzled veteran. They also span the continuum from ethical to completely fraudulent. The more complex your return, the more you need a veteran preparer. And if your preparer tells you about this great deduction that you can take and it sounds suspicious to you, listen to your intuition. It's the difference between paying a little bit now or paying a whole lot later. 2. Tax preparers are not business experts. The only business experts in the world are those who are running successful businesses. Tax preparers are trained to understand taxes. They're trained to know the proper forms and deductions. They're trained to help you with tax planning. They are not trained to understand how business works. Now, you may have a tax preparer who is also a successful business owner. Many CPA's, accountants, bookkeepers, and tax preparers do run their own businesses. They're in a much better position to help you with your taxes because they understand the day to day challenges of running a business. Understand that having your taxes prepared by a big name franchise, although it does ensure that your return is accurate, does not mean that your return is prepared in a way that is best for your business. Only a preparer who understands business can prepare a return that works for your business. 3. Hiring a tax preparer doesn't mean you're excused from understanding taxes. I've seen it so many times. I sit down with a client to talk about finances or taxes. As I talk, the head is nodding, the mouth is saying, "uh huh, uh huh", but what they're really focused on is the pen in their hand. They don't want to understand, they just want to sign off on the paperwork and be done with it. "That's what I hire you for", they say. Big mistake. I could be sentencing them to time in a federal prison. Trusting someone else to the point where you abdicate all responsibility and have no knowledge of what you're signing or what is being done in your name is a recipe for a big fat slice of disaster. That's how embezzlement happens-I trust Mary completely. Bob always takes care of that. And it's also how business owners end up in trouble-What do you mean he took a deduction for my Chihuahua as a guard dog? Hey, why didn't I get a deduction for my new computer? You have to know enough about taxes to be able to read your return intelligently so you know what you're signing. You also need to know enough about taxes so you know what your tax preparer needs to know to prepare your return accurately and to your best advantage. And don't get your education from your buddies. I heard a lot about these "special deductions" you can take. Usually the information is not based on facts or tax codes. It's a conglomeration of bad information that can get you into tax trouble. 4. Your tax preparer shouldn't be the one telling you how your business is doing. It hits them hard. They couldn't be more shocked if you'd hit them upside the head with a dead fish. "I owe how much?!?!", they gasp. "How can that be? I don't have any money!" Then the desperation sets in. The tax preparer is accused of not doing a good enough job. "You must have missed something." Or, they dig deep trying to think of anything, anything at all, that can lower their tax liability. "Did I mention that vacation, I mean, business trip I took to the Caribbean? That's deductible right?" If the only time you know how your business is doing is on April 15th, you're doing yourself a huge disservice. If you're not tracking your tax liability and making plans to satisfy that liability, you're in for a very long, painful, tortuous lesson delivered at the hands of the Internal Revenue Service. You will pay. You will pay way more than if you'd planned ahead. And it will take you forever to get caught up. 5. Why getting your tax return prepared shouldn't be an errand you run on your lunch break. I was in a client's office one day getting her books closed out for the year so she could have her tax return prepared. I overheard a woman in the next office telling someone, "I'm just going to run out and get my taxes done." I was horrified. Having your taxes prepared is not something you just "run out" and get done like an oil change. Good tax preparers are like good hair stylists. They have followings. People pre-book them. If you just "run out" and have your taxes done, who do you think you'll get as a tax preparer? The best and the brightest? Hardly. You'll get the first year preparers who haven't built up a following. The ones who are fresh out of tax class and generally have no experience preparing tax returns or running a business. The ones who don't have the expertise to know the ins and outs of interpreting tax codes to your best advantage while still keeping you within the law. Sure everyone deserves a chance to gain experience but do you really want to be the first patient a surgeon operates on? 6. Procrastination is your worst enemy. It's April 14th. You think you probably should get your tax stuff together pretty soon. So, you work late into the night, gathering receipts, pawing through stacks of paper, digging under the seat of your car until finally you've got everything you need. Off you go on your lunch break on April 15th to get your return prepared. Your tax preparer, who has been working at a feverish pitch for weeks, has deep circles under her eyes, her hands are shaking from lack of sleep and too much caffeine, and you notice a small stream of drool running down her chin. "Oh look," she exclaims laughing maniacally, "Another return!". And you think to yourself, "What's her problem?". You, my procrastinating friend, are her problem. Now she's got to frantically race around trying to keep you out of trouble because you didn't have the courtesy or forethought to be prepared well ahead of the deadline. And then she'll have to listen to you whine because now all of a sudden you have to come up with thousands of dollars that you didn't know you owed. Do yourself a favor, get your return done early. If you owe money, you don't have to send it until April 15th. At least you'll know that your return was prepared by a tax preparer who wasn't fatigued, you'll know ahead of time what you owe, and you'll have it off your mind so you can focus on other important things. Like getting your oil changed on your lunch break. Caroline Jordan, MBA, small business mastermind and author of Mastering Cash Flow: A How-To Guide for Solving Small Business Cash Flow Problems, offers bright ideas with real world results for solo entreprenuers. For more small business how-to articles visit http://www.TheJordanResult.com. To get in touch, call Caroline at (207) 583-2630 or send an email to TheJordanResult@adelphia.net.
MORE RESOURCES:
Taxes - Google News |
|
|
|
RELATED ARTICLES
Early Distributions From Retirement Plans An early distribution from an Individual Retirement Arrangement (IRA) or a qualified retirement plan need not be a "taxing" experience. Fortunately, there are exceptions to early distributions. 10 Thoughts on Tax Offer in Compromise Beware of advertisements that claim to settle tax debts for "pennies on the dollar". Check the Offer In Compromise requirements to see if it is right for you. IRS Obtains More Than 100 Injunctions Against Tax Scheme Promoters The IRS has obtained civil injunctions against more than 100 promoters of illegal tax avoidance schemes and fraudulent return preparers in an ongoing crackdown that began in 2001. Many of the injunctions, obtained in cooperation with the Department of Justice, also order the promoters to turn over client lists and to cease preparing federal income tax returns for others. Complaince of Tax Return in Electronic Commerce Taxation Emerging Legal issues of Tax compliance of e-business Self-assessment system relies on taxpayers voluntarily meeting their tax obligations by tax payee. This concept is recognised in all tax statutes, which sets out taxpayers' primary obligations to fill tax return on self-assessment, and clearly spells out that taxpayers are required to determine the amount of tax payable correctly and to pay it on time. I Havent Filed a Tax Return with IRS in Years, What Do I Do? In elementary school, kids come up with creative excuses why they did not bring in their homework. "My dog ate it" or "It was stolen by invisible space aliens" might be given as a reason why something was not turned in on time. How to Reduce the Estate Tax Using the A-B Revocable Living Trust In a past article I relayed the plight of the widow who stated:"I didn't realize what an A-B Revocable Living Trust meant and that it had to be divided between the survivor and the deceased spouse and that I am limited as to what I can use from his share."She told me that she only learned of this after her husband passed away. Small Business Tax Deduction - Write-Off Bad Debts Practically every small business has receivables that it cannot obtain from clients. If your small business doesn't have any such receivables, consider yourself lucky. The Annual Gift Tax Exclusion: Getting The Edge Whether helping the kids with a down payment on their first home, paying the premiums on a life insurance policy in an irrevocable trust, or moving appreciated assets to a younger generation, annual gifting will touch the lives of millions of Americans. But before the transfer is made, an investor should spend some time looking at the investment and the tax ramifications of the property to be passed. Euro Tax Haven Threat Media reporting of a new EU savings tax directive has left many people wondering whether European tax havens could soon become obselete.The July directive requires banks throughout Europe, including low and no tax areas such as Gibraltar, Monaco, Malta and Andorra, to disclose bank account owner information to their home country's tax authority. The Tax Man Cometh... To Search You're at your office, or home, and the doorbell rings - it's the Canada Revenue Agency ("CRA").The first thing to do is find out why they've come. How To Set Up A Tax-Saving Bookkeeping System One of the most important, but least understood or appreciated aspects of any business is its bookkeeping or accounting system. And, because very few people know much about the reasons for a bookkeeping system, most people are frightened by the thought of the work involved in setting up such a system, and the drudgery of daily maintenance. Military Reservists, Enlistees May Get Deferral of Back Taxes Reservists called to active duty and enlistees in the armed forces may qualify for a deferral of taxes owed if they can show that their ability to pay taxes was affected by their military service.The deferral covers active duty members of the military services - Army, Navy, Air Force, Marine Corps and Coast Guard - and commissioned officers of the uniformed services - Public Health Service and the National Oceanic and Atmospheric Administration. IRS Reports Tax Gap of $300 Billion The Internal Revenue Service is reporting that the difference between what U.S. E-commerce Taxation The means and types of businesses have transformed with advent of era of e-commerce, resulting in global seller and buyer. The Internet offers consumer choice, business efficiency and recreation. Organizing Your Taxes Does this scene sound familiar? It's April 7. You haven't seen the top of your dining room table in two weeks because of the piles of paid bills, receipts, canceled checks, and unidentified cash register receipts covering it. Tax Deductions - Mr. C.P.A. Can I Deduct a Pizza? You Too Can Deduct Your Fun By Using Tax Tips Recently, I stumbled across a concept that could change your financial life. You can call it a paradigm shift or a new perspective or just a different way to look at things. Keeping Your Own Money - NOT Handing It Over To The Taxman Most people trying to make a crust online (or offline for that matter) are so focused on doing just that, they ignore taking simple steps to ensure that they hang on to just as much of it as they can. Instead, they hand over large lumps of their hard-earned money in tax, usually in one of two mistaken beliefs. What to Do If You Can't Pay Your Taxes The end of tax filing extensions is quickly approaching. What do you do if you can't pay the amounts you owe? You should still file your return by the due date and pay as much as you can. About Income Taxes; Tidbits 1812The first attempt to impose an income tax on America occurred during the War of 1812. After more than two years of war, the federal government owed an unbelievable $100 million of debt. How To Get An Extension To File Your Business Tax Returns Yes, the tax season is upon with the first filing date for some businesses being March 15, 2005. If you can't imagine getting your tax returns together by that date, you need not worry.
|
| Good Credit Loans | home | site map | School Bus Clothing | Florida Pool Heating |
| © 2006 |
