Real Audit Support?

I call it reading the fine print. Fear of an IRS audit is real. The do it yourself tax preparation business has grown in the last few years.  Obviously we are biased, but why in the world would you trust a box to assist in preparing a tax return and later rely on down loadable audit support for help. 

In the case of the most popular do it yourself tax preparation software, assistance is not even available if you file a business return.  I copied and pasted from their web site emphasis is ours:

Audit Support Included FREE with All TurboTax Personal Tax Products

TurboTax not only helps you reduce your chance of an audit, we also give you clear guidelines with
illustrations on what to do if you are contacted by the IRS.^{1<<<<<<<<<<<<<<<<<<<<<}

Includes Downloadable Audit Support Center

Being contacted by the IRS can be confusing and stressful, but it doesn’t have to be. That’s why we’ve created the TurboTax Audit Support Center, included for FREE with all TurboTax products.

Only about 1% of all personal tax returns were audited,² so it is unlikely, but if you are contacted by the IRS, we’ll help you to:

1. Find out why the IRS contacted you
2. Determine what it means
3. Prepare your next steps

With downloadable step-by-step guidance, including what different types of IRS letters may mean, you’ll know exactly where you stand and what to do next.

Remember, TurboTax guarantees 100% accurate calculations. If you pay an IRS or state penalty or interest because of a TurboTax calculation error, we’ll pay you the penalty and interest.

¹Not included with TurboTax Business.<<<<<<<<<<<<<<

²Based on IRS results for tax year 2009

So if you file a business return. The number one target of IRS audits, you really are on your own.  No audit support for business returns.

After a little hunting on their site I found that additional tax audit support is available for about $40.00.  More than the cost to prepare some returns. 

 

But it gets a little murkier. These services are outsourced to a third party Tax Resources Inc.  And their help can be spotty. 

Click here to read some users comments.

Better yet click this link to read user comments about TurboTax.

IRS wins low pay case against Iowa S Corporation shareholder

From the Wall Street Journal online:




There's a saying: Pigs get fed and hogs get slaughtered. The Internal Revenue Service surely hopes that includes tax hogs.

That is the message of a recent U.S. district court case won by the IRS against David Watson, a CPA in West Des Moines, Iowa. At issue: a common tax-cutting maneuver available to the owners of millions of closely held businesses.

The case, David E. Watson P.C. v. U.S., revolved around Mr. Watson's low pay as the sole owner and shareholder of a so-called S Corporation. Such companies, often called "Sub-Ss" after the subchapter of the tax code governing them, is a popular choice of entity for private firms. Unlike C corporations, Sub-Ss have no more than 100 shareholders, and they pass profits to owners without an extra layer of tax. There are nearly 4 million Sub-Ss in the U.S. today.

Mr. Watson's Sub-S was, in turn, one of four principals in LWBJ, an accounting firm. According to the decision, the firm made profit distributions of $203,651 and $175,470 to Mr. Watson through his Sub-S for 2002 and 2003, respectively, the years in question.

Mr. Watson, who had a graduate degree in tax and 20 years' experience, received only $24,000 of salary for each of those years, far less than the $40,000 a year earned by recent graduates in accounting with no experience, according to one expert for the IRS.

The agency cried foul, saying his pay was far too low. Why object? Unlike profit distributions, all salary is subject to a 2.9% Medicare tax and some is subject to a 12.4% Social Security, or FICA, tax. (The FICA income cap, $84,900 in 2002, is now $106,800.) By reporting low pay Mr. Watson didn't save any income taxes, but he did save nearly $20,000 in payroll taxes for the two years, the IRS said, pegging Mr. Watson's true pay at $91,044 for each year.



Read more by clicking the above link.

8 tips for picking the right tax preparer

Short URL: http://con.st/10015213 

be prepared

8 Tips For Picking The Right Tax Preparer

By Tax Cat on January 24, 2011 12:30 PM 0 views

You know that I love you all and would just love to prepare every last one of your 1040s this year. But between my existing clients and that centipede I can't seem to catch, I'm booked solid through tax day.
Thank heaven the IRS has the following tips for when it comes time to pick a tax preparer:
1. Check the person's qualifications. Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.New regulations require all paid tax return preparers including attorneys, CPAs and enrolled agents to apply for a Preparer Tax Identification Number — even if they already have one — before preparing any federal tax returns in 2011.
2. Check on the preparer's history. Check to see if the preparer has a questionable history with the Better Business Bureau and check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for attorneys; and the IRS Office of Professional Responsibility for enrolled agents. (You can e-mail opr@irs.gov — be sure to include the preparer's name and address.)
3. Find out about their service fees. Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers.
4. Make sure the tax preparer is accessible. Make sure you will be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise.
5. Provide all records and receipts needed to prepare your return. Most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.
6. Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
7. Review the entire return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
8. Make sure the preparer signs the form and includes their PTIN. A paid preparer must sign the return and include their PTIN as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return.The preparer must also give you a copy of the return.
Remember: You're still legally responsible for the content of your tax return, whether you prepare it yourself or hire a paid preparer. So if you think the results of your return seem too good to be true, it behooves you to double and triple check everything before signing off on it.

What is new on the 1040 for 2010

Smart Money online lists the major changes on your 1040 this year:

Over the last few years, Congress has made tax-law changes that place increasing pressure on professional return preparers to electronically file more and more returns. As a result, your preparer might be forced to e-file your 2010 Form 1040 even if your returns for earlier years have always been done on paper. Get used to it.

Read more: What's New on the 2010 Form 1040 - SmartMoney.com http://www.smartmoney.com/personal-finance/taxes/whats-new-on-the-2010-form-1040-1295384880669/#ixzz1BXRrUhPc

Link to our 2011 Tax Partners Client Organizer

This is a very large pdf  file and requires some patience to upload to your computer.  

You will need Adobe Reader (the latest version is recommended) installed on your computer in order to open and read this free consumer report. You can get Adobe Reader here (a new window will open so you can download it without leaving this page).

If you want to open the file in your browser window, just click on the link. However, if you want to download the file to view later, then right-click on the link and choose "Save Target As" or "Save File As." Then select where you want to save the file on your hard drive.

Once you have saved the file, locate where you saved it, and double click to open.

In order to print, open the downloaded file, and select the "Print" option from the consumer menu.


Click the link below>>>


http://www.1taxes.com/support/taxpartnersclientorganizer.pdf

H & R Block's Free Tax Preparation

Far be it from us to help publicize a much larger competitor's promotion.  Business Week online writes that there is a catch:



The promotion only covers those filing the 1040EZ federal form, which is about 16 percent of H&R Block customers. The 1040EZ form covers only the very simplest tax issues. It can't be used by anyone who has dependents, makes more than $100,000 per year, is age 65 or older, claims adjustment to income like alimony or tuition deductions, or itemizes deductions. Thus, homeowners who deduct mortgage interest or people with large charitable contributions can't use the 1040EZ.
Even those customers who can use a 1040EZ will have to pay H&R Block extra to file any state income tax returns. Just seven states—Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming—have no income tax.
The offer began on Jan. 14, when H&R Block's local offices started filing 2010 returns, and ends on Feb. 15. From Feb. 15 to Apr. 18 (the tax filing deadline is different this year because of a holiday on Apr. 15 in the District of Columbia), customers will be charged to file a 1040EZ at an H&R Block office. That's an important consideration for taxpayers who may still be waiting for key end-of-the-year paperwork.

Click the above link to read more.

January 2011 Client Newsletter

2011 predictions you ask? $5.00 a gallon gas by years end,  an uptick in your business’ sales, continued state government woes with even more delays in paying its bills, it is all doom and gloom in the Public Sector (look no further than the way New York City handled the recent sanitation snow removal worker’s slow down and President Obama’s re-election team has just started a wave of staff lay-offs), while the Internet becomes more important in just about everything we do including the marketing your business, a Chicago Cubs World Series, and according to the the Aztec Calendar the end of the world is just a year away. On second thought maybe I will leave the predictions to the experts.

More doom and gloom.  As you probably heard, IRS will delay refunds for many taxpayers.  Approximately 50 million refunds will be delayed by a month. Congress’ late passage of the tax bills means the IRS will need additional time to re-program their computers.  By the way the due date for your tax return is April 18, 2011 because of Emancipation Day, a holiday observed in Washington D.C on April 16th.

And speaking of new tax laws, The Tax Relief, Unemployment Insurance Re-authorization, and Job Creation Act of 2010 provides a two percentage point payroll tax cut for employees, reducing their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid. This reduced Social Security withholding will have no effect on the employee’s future Social Security benefits. Employer’s matching contribution of 6.2 percent does not change.  This change is effective for your first payroll check written in 2011. Do you need 2011 W-4 forms for your employees?  Email or call us and we will mail you new forms.  In a hurry?  We have added a link to our Blog so you can down load them.

We have already started processing your quarterly forms this month.  Some clients will be paying their federal tax liability electronically, while others will not. It is based on liability.  As usual 1099 forms will be processed last.  Don’t expect any 1099 forms mailed to you until very late in January.

Later this month we will be sending you a newsletter designed to help you gather your 2010 personal income tax information for filing this year.  We will not automatically send you a personalized tax organizer as we have done so previously.  Criticism from some clients about sending  certain personal information via bulk mail, and the fact that some clients love them, and use them, while others don’t made us re-think the policy.  We decided to go green. Need a personalized organizer? Email or call us and we will send one to you right away.

Internet Tax Savings Coupon

Four problems people have with tax preparers and what we have done to solve them.

1.They are not open when you really need them to help you...
Tax Partners Budgetax doesn’t disappear after April 15th. The IRS issues most notices three to four months (sometimes even years) after you file. We are open 52 weeks a year. Our professionals are here to help you when you need us.

2. Inexperienced, poorly trained, low paid, stressed out tax preparers, punching numbers into a computer...
At Tax Partners Budgetax, we employ only full time tax professionals to prepare your return. They know how to make the tax laws work for you. Our 29 years in business means we have the experience to help our clients get larger refunds. You’ll like our friendly personalized service. We really mean we don’t speak “Tax Geek” unless we have to.

3. No professional support when you need it the most...
Online tax services, tax preparation software, and big name tax preparers talk about audit support but they really don’t mean it. Read the fine print...you really are on your own. Since Tax Partners Budgetax preparers are enrolled to practice with the Internal Revenue Service, we can represent you in case of an audit, not simply attend the conference, or allow you to download a suggested help sheet.

4. Poor Service...
A big name doesn’t always mean a better service. You’re treated like a number and have to wait in a hot, stuffy waiting area for hours. Your time is important to us. At our office we promise no long wait, whether you make an appointment or just drop off your tax information. Our fees are fair and guaranteed. We’re fast, friendly and affordable. And most importantly our emphasis is not on expensive refund anticipation loans but your larger refund.

Save $28.00 On The Preparation Of Your 2013 Personal Income Tax Refund!

Just mention the code Illini 2014

Present this coupon along with your income tax information and we will immediately deduct $28.00 from our fee.  No need to prepay for your tax preparation.  Our FeeCollect  program allows you to pay for your tax preparation fees directly out of your refund.  All returns are E-Filed for free.  No additional charge. We are open seven days a week.  No appointment necessary.  No long wait guarantee.  Not combinable with other offers.

Visa, Mastercard, American Express accepted.

10 Things Tax Preparers Won't Tell You

Click on the above link to read the article originally published by Smart Money magazine.  After 30 years of being in the tax preparation business we have done our best to turn, what is a really an art and not a science, into a fair, honest, reliable, business.  Reading what some of our competitors get away with is rather upsetting. And should be to you. 

Link to IRS 2011 W-4 Form

Here is the link to the IRS web site to down load 2011 form W-4.

http://www.irs.gov/pub/irs-pdf/fw4.pdf

It is a pdf file.  Here is a link to down load Adobe Reader.

http://get.adobe.com/reader/