How can I save on my tax preparation fees?

FAQ question mark on chalkboard

One keyword: Organization. For clients who request them, we mail tax organizers in January. This is a helpful tool in letting you know what you had last year so you can see if you have the same information this year. The organizer asks questions to see if you have any different deductions for the current year. If you don’t have an organizer, assemble your information in groups. For example, all W-2’s and 1099’s are grouped together, as well as bank interest statements, charitable contributions, etc. Opening and sorting mail takes time, so you can save some preparation time if we don’t have to do that.

I’ve heard that the home office deduction is an IRS red flag. Is this true?

No, it’s not a red flag. As a matter of fact, the IRS is issuing information on how to identify and correctly report home office deductions. The IRS understands that there is a growing amount of home-based businesses, and they may qualify for this deduction.

I use my auto for business extensively. What do I need for documentation so I receive the maximum deduction?

This is an area the IRS examines closely. You must record the date, beginning and ending mileage and purpose of the trip. Personal mileage should be logged also. The easiest way to record mileage is downloading and using one of several phone apps that are available, such as MileageIQ. It’s very easy to record business and personal mileage.

What information do I need to deduct entertainment expenses?

First, keep all receipts. It’s not enough to have the charge card statement, you must have receipts also. Note who was in attendance and the purpose of the meeting, as well as the date.

Why don’t you support other bookkeeping software other than QuickBooks?

QuickBooks has over 84% of the small business market and is growing. We believe their software has tremendous value for most businesses. Having said that, QuickBooks doesn’t fit all situations. For those times, we are happy to help our clients find the right software.

Do you recommend upgrading to QuickBooks Online?

Yes, there are many advantages to using the online version. First, Intuit will eventually stop supporting the desktop version. No date has been set but this will happen. Secondly, the online version allows access 24/7 to your information-all you need is an internet connection. This allows you to get information anytime you need it. Bookkeeping support is much easier as we can access the information for questions (if you “invite” us as the accountant).

Why do I need monthly financial statements for my business? Isn’t the tax return enough?

Can you name one successful business that doesn’t have accurate, up to date financials, and reviews them on a regular basis? Try to think of the financials as a report card – it’s one way to gauge the health of the company. Analyzing financial statements isn’t intuitive. We help you “breathe life” into your statements. They should be a tool for success. We tell you what the statements are indicating and how to improve results. Tax returns are typically based on a different set of rules-tax law vs. financial accounting. Also, the tax return is done only once a year; if there are problems it takes longer to find out and correct the issues.

What is the difference between tax planning and tax preparation?

Too often Income Tax Planning comes after Income Tax Preparation. This is a big mistake. Tax planning occurs during the year, not after the fact. Many people think tax planning is only for the “rich,” not them. In reality, tax planning is effective with major purchases or sales, or with major life events such as college, weddings, retirement, etc. Laws are constantly changing-just give us a call to discuss your situation.

I’ve heard Personal Finance Planning is only for people with a net worth of more than $500,000

Absolutely wrong! Personal Finance Planning and Income Tax Planning go hand in hand. Neither happens in just one year, they are both a process lasting many years. Because we are familiar with your personal income taxes, we can help chart a course for upcoming life events. We do not sell financial services, so we are completely objective in our advice.

What are portals and why would I use them?

Client portals are a convenient way for you to access your financial information 24/7. Some have asked about security, which of course is a concern. Our portal uses the highest level of security available. Do you use a debit card or credit card? Portals are more secure than using these cards. Most financial institutions want information in digital format. By providing you with a portal you can easily provide information when requested. Also, at tax time you can upload documents without the cost of mailing them to us.

I can’t come to your office, is there another way to meet?

We can schedule meetings any time during the year using Zoom software. This is very easy to use and no account or password is created. We will send an email with a link to directly connect to your tax preparer. This is a great option for those who are out of town or with very busy schedules. Most laptops, tablets and cell phones have built-in cameras, so there is no need to purchase additional hardware. Call us for more details.