I’m Back with “Who is”

Posted by Bruce Mc on Jul 8, 2009 in Choosing a preparer, Opinions, Preparer, Re post | 0 comments

            Okay, things have settled and for the most part organized. Taking up this blogging thing again as before; Monday, Wednesday, Friday, with a recap of the past week on Sunday’s. I have missed being active regularly and I have been missed, but things are going strong again. 

            For my readers who have hung with me thank you. I apologize in advance for the repost below but given everything, I find it necessary. 

            So much talk about hiring a tax professional and so much debate about who is a professional I want this out again. 

            The biggest point I want to make is that just because someone is a CPA, doesn’t automatically make them a tax professional. 

            Tax professionals are hard to find because as you may have heard, there is no accreditation from the AICPA (American Institute of Certified Public Accountants) that says “Tax Professional”.

             Hope you enjoy my return to active blogging.

 Repost of Who is. . .

        As a tax preparer I am often asked what is the difference between a tax attorney, an accountant/CPA, a bookkeeper, an Enrolled Agent, and a tax preparer.

A Tax Attorney is not the same as an accountant. The accountant can work with the financial issues and has a general knowledge of tax laws; however a tax attorney is a specialist in all aspects of tax law. Although they often work closely together, they are two complete different services. Typically large and even small businesses will meet with a tax attorney once every quarter or once a year to ensure that they are making the best possible business choices with regards to investments and tax issues. Since the taxation laws change constantly, this is an important step.

            A Bookkeeper is responsible for keeping accurate, up-to-date business records for proper cash flow management, balance sheet preparation, and developing expansion and investment plans. A bookkeeper also assists in filing tax returns with updated tax records. Accurate bookkeeping is a legal requirement and should be kept well within the standards that are set by local and federal tax agencies. A bookkeeper accurately records all of the financial transactions. It is the responsibility of bookkeeper to note all monetary transactions that are received and paid out. The records also include outstanding balances that the company owes to other parties and others who owe to the business. Business bookkeeping takes a lot of time and cannot be done in a hurry. At small businesses, bookkeepers also double as company accountants. Perhaps bookkeepers have the biggest responsibilities in the company as business planning, payroll management, and tax return preparations are dependent on accurate bookkeeping. Bookkeepers often do not have the qualifications or certifications of accountants, but the responsibility is not any less. Bookkeepers that have a great deal of experience can market themselves as accountants or managers. For that, they also need to supplement their profession with certificate courses, seminar attendance, and on-job training. All types of businesses require bookkeepers who are experienced in their specific business functions.

Accountants keep track of a company’s money. The company’s managers and people outside the company read their reports. Managers look at the accountants’ reports to see how well their companies are doing. There are four kinds of accountants:

Public accountants work for public accounting companies. They do accounting, auditing, tax, and consulting work. Some have their own businesses. They do many different kinds of accounting for people outside the company.

Management accountants keep track of the money spent and made by the companies for which they work.

Accountants generally work a standard 40-hour week, but some work 50 hours a week or more. Tax accountants often work long hours during the tax season, from January to April. Most accountants have a college degree in accounting. Public accountants have to take a special test as well, resulting in a certification. Public accountants also must have a special license from the State in which they live. Accountants are generally good mathematicians, and have good analytical skills.

An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. “Enrolled” means to be licensed to practice by the federal government, and “Agent” means authorized to appear in the place of the taxpayer at the IRS.  Only Enrolled Agents, attorneys, and CPAs may represent taxpayers before the IRS.  The Enrolled Agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the U.S. Treasury Department.

A professional Tax Preparer is an individual who prepares tax returns. A professional tax preparer can be a Tax Attorney, an Accountant/CPA, a Bookkeeper, an Enrolled Agent, or anyone who professionally prepares tax returns for clients. Most return preparers are professional, honest and provide excellent service to their clients.

            So there you have it.

How do you choose the right one to prepare your taxes? There is no one factor to use in determining this. I suggest you read the IRS Tips for Choosing a Tax Preparer. Or my website page Finding a Qualified Tax Preparer. I would also hope you to read 5 Biggest Mistakes most taxpayers make when choosing a tax professional!

A Little Straight Talk

Posted by Bruce Mc on Nov 19, 2008 in 2008 Stimulus, Opinions, Stimulus payments | 4 comments

Another “stimulus”? did the last one even make a dent? Help in the slightest bit? If it did I missed it. Honestly, I can’t help but shake my head. I just don’t get the logic.

Before I get to the specific steps you should take, let’s talk for a moment about the big picture.

 The President and Congress encouraged millions of Americans to SPEND, and yet many of these very same Americans were/are already over their heads in debt with an average credit card balance of more than $9000!

Good thinking.:bomb:

Let’s continue one of the very reasons that our country is in such poor economic shape. In fact, don’t wait. Spend it now and pay it back later — with interest, of course! The current government thought that spending the rebate dough was a vote of confidence for our economy’s future. Wake up, Congress! Smell the damn coffee and join the rest of us in the real world.  

I believe it’s irresponsible for our government to encourage us all to spend, spend and spend more without even a mention of paying down debt or, actually saving some money for the tough times I think are still ahead. While I question just how effective this whole band-aid approach will be, if the government wants to put a little extra money in our pockets, we’ll take it, right?

But…I want you to be smart about what you do with it.

If you’re in great shape financially and don’t have any debt to pay down, college educations to fund, cars to buy, etc., by all means – spend it! Enjoy yourself. That’s just not the reality for most of us. We can use this money to do some serious good.

So what exactly should you do with extra money? Here are suggestions for the smartest ways to put it to good and meaningful use:

Pay down your credit card balance as much as possible. Think about this. If you’re part of a couple with $10,000 in credit card debt and you apply your $1,200 right to that balance, you’re paying off more than 10% in one fell swoop. That’s huge! And it will save you a ton of money in interest over time. You’ll be in much better shape financially than if you spend that money.

Get ahead on your mortgage payment. This is especially true if you have one of those adjustable-rate mortgages that caused the whole sub-prime crisis. If you are in danger of not being able to make your payments, don’t even consider any other option for this rebate.

Start a family emergency fund. I recommend that you have at least six months’ worth of expenses set aside. This is more important than ever now when the economy is struggling, people are losing jobs, and so on. The situation is only going to get worse in my opinion.

Add a few dollars to your IRA. You get a double bang for the buck. You get a tax break and you’re saving for your retirement. When you’re retired and sitting at your beach house sipping a glass of fine wine, you’ll look back and be glad you made decisions along the way to save for your retirement and not rush out to buy that big-screen HDTV.

Invest in your career. If you are at all concerned about your job in the current economy, spend some of this money on training or courses to help you keep your job or make you more marketable if you need to find one.

Start or add to a 529 savings plan to help pay for your children’s (or grandchildren’s) college education. There’s no better investment in our future! Saving for college can be confusing, so be sure to check out all additional information.