A Week in Perspective
I have been searching for some new PF blogs to read and incorporate in to my weekly recaps. This post is evidence of that I think as it has lots of PF blog links. Fear not lots of tax stuff in here too. If you need more tax info then Tax Carnival #75: TaxtoberFest 2010 is out and full of great articles.
10 tax tips for 10/10/10 - I’m not a numerology freak. And I don’t have any particular financial superstitions. But I just couldn’t let the 10th day of the 10th month of 2010 go by unmentioned.
My favorite post this week is:
‘Sex therapy’ is not a medical deduction – A New York state tax appeals board has denied a retired Brooklyn lawyer’s attempts to claim hundreds of thousands of dollars he spent on prostitutes, massages, pornography and other sex-related activities as deductions for “medical expenses.”
No Kay we should have to keep saying this, but it wont stop people from trying even though they know.
EFTPS Scam On the Rise – Scammers and phishers are becoming much more clever these days. That’s why it’s important to be smart – and informed. The most recent scam making the rounds appears to be a phishing scam. An email is circulating with the subject line: Your Federal Tax Payment ID: 010363124 has been rejected.
What Does “Financial Independence” Really Mean? – “Financial independence” is a phrase often bandied about by people without any sort of consistent meaning.
REGULATION DOES NOT PREVENT FRAUD – Regulating “unenrolled” tax preparers, while a good idea which I support, will not prevent tax fraud. Regulating CPAs does not prevent tax fraud. Here is an example of the tax advice given by a CPA from a recent blog post by a tax attorney. . .
Withdraw from your IRA with no Penalty? – With all the RothMania spreading, especially since the income limits for converting from a traditional to Roth have been removed, I’m afraid that the needed discussion regarding the Traditional IRA has been neglected
KEEP IT SIMPLE – Still work on extensions RDF has a minute to get us this post. Lets Freeze it shall we?
Good, Better, Best – According to Twitter, which I realize is in no way verified, John D. Rockefeller said: “Don’t be afraid to give up the good to go for the great.”
Trends and the Tax System – The Home Mortgage Interest Deduction – Today, USA Today reported on a trend of more people renting their homes than buying them, apparently due to both the economy and benefits of renting rather than owning. See Should you rent or buy your own home? by Christine Dugas. The article refers to a survey indicating that even some that can afford to buy a home are renting instead and fewer think it is part of the American dream to own a home.
New tax breaks for the 2010 tax planning home stretch – The 2010 tax year is three-fourths over for most of us. By now, we should have a decent idea of what sort of year we’re having, so it’s time to get serious about our year-end tax planning.
New Employer Plan Internal Roth Conversion Rule Falls Short – I wrote about a new Roth Conversion provision in the small business tax bill that everyone has been waiting for, the ability to convert pre-tax dollars in an employer sponsor plan to the designated Roth portion of the employer sponsored plan. These plans are 401k’s, 403b’s and government 457b’s. The blog entry is more in depth here. That was the good news, however lots of people are still not eligible to directly rollover their 401k, 403b or 457b money to a Roth IRA or designated Roth account while tax rates are low and time is on their side.
Should I Really be Doing my own Taxes? – This isn’t a bad thing… if your taxes aren’t going to be complicated. What do I mean by ‘not complicated,’ you ask? Ask yourself these questions if you are considering doing your taxes yourself this coming year:
The World of Twitter Can Get Mean – I consider Twitter like an huge ongoing conversation or maybe with 5,600 conversations going on it is more like a giant cocktail party. I will say for the skeptics that from a marketing standpoint it does work, because I have found new business from Twitter.
Do I Qualify for the IRS Offer in Compromise Program to Settle Back Taxes Owed?
Tips to Becoming Independently Wealthy – . . . we pay our obligations and we are left with a goose egg. There is a fundamental problem with this, and the truth is that 98% of us are so concerned with being good little bill payers and having a good credit score that we miss the boat on our most important piece, our income-producing asset column.
Got W-9? How New Health Care Bill Form 1099-MISC Requirement Will Drown You in Paperwork – Just what you need – one more administrative task put on the backs of small business owners. Starting in 2011, any vendor or independent contractor payment that aggregates to more than $600 in a year gets a Form 1099-MISC. In the past, we’ve only had to give Form 1099s for services and to unincorporated entities. Now everybody gets a Form 1099, corporations included, and for all payments – services AND goods.
Family LLCs as estate beneficiaries: an Iowa inheritance tax trap – The Iowa inheritance tax lives on even after the (temporary) death of the federal estate tax. It has many exemptions and rarely applies.
How to use PayPal for Marketing
Quicken 2011 Review and Giveaway – Interested in receiving Quicken 2011 for free? Read this article in full. This coming Thursday, October 14, Quicken 2011 will be released to the public. This is the latest version of the most popular desktop software for managing your personal finances. I’ve been using Quicken for six years, and I have eight years’ worth of financial data in my files
Tax Fraud: Top 3 Ways You’ll Go Straight to Jail! – Can you go to jail if you don’t pay your taxes? The short answer is “Yes”, not filing your taxes and committing tax fraud are Federal Offenses. You may have dodged the IRS for now, but eventually, you will get caught.
A Deeper Look at the “Percentage Budget”
Why do things like this never hit the KC area? Get Free Help at a Financial Planning Day Near You – During October, CFP Board is part of a group offering Financial Planning Days nationwide. A Financial Planning Day is a free one-day educational seminar held on a Saturday and open to the public. Professional certified planners volunteer their time at these events and cover a variety of financial topics.
More People Need Tax Relief for IRS Back Taxes Than Ever Before – Find Out Why! – We are in a recession. This is no news. But you may be surprised to know that the IRS is taking the current poor economic state as an opportunity to double and triple their efforts to collect taxpayers’ back taxes and outstanding debts.
Why?
Bad economy + lost jobs = no or low income and less tax money for the IRS
Should You Merge Finances With Your Spouse? – Financial management is one of the most serious considerations that married couples have to plan for. Without proper planning, financial stress can put a significant strain on a marriage. Money is such a hot button issue that a 2004 study issued by Redbook magazine found that 70% of married couples talk about money every week. Clearly, this is a sign that couples aren’t taking the necessary steps to determine what financial arrangement works best for them
New Tax Breaks- And What They Mean for You! – The Small Business Jobs Act of 2010 was enacted this past week. Learn what this means for you!
Why You Need to Learn to Invest in 2010 – You can learn to invest in 2010 or you can invest with the crowd. Invest like most folks and you might not be a happy camper. Here’s why now is the time to learn to invest. Consider what follows to be your personal financial stimulus package for getting up to speed and on your way to financial success… with a financial education.
12 Tips to Prevent Identity Theft – Identity theft offenders steal some one else’s identity to meet their own ends; either for economic purposes or for committing some other sort of crime. These criminals make use of your social security number, bank account or credit card number, telephone calling card number and similar identity data. The thieves usually get information by methods such as stealing your wallet, mail or purse. They may also get personal information from you by posing as credit card companies or legitimate companies. They may even steal information from businesses or use bribes to get the information. Some identity theft victims have claimed that the theft was done by people known to them. This is why you need to be very careful.
Branding Your Freelancing Business: Personal Name vs Business Name – When you build your business, at some point the question of branding will come up. What do you want to call your business, and what image do you want to project?
Facebook does 5-for-1 stock split – Facebook’s shares won’t have a clear market value until the company goes public — a move that’s not imminent. Prominent Silicon Valley investor Peter Thiel, an early Facebook backer, said at a tech conference last week that he doesn’t expect the company to IPO until 2012 at the earliest.
Key Business Changes in the Small Business Jobs Act – The recently enacted 2010 Small Business Jobs Act includes a wide-ranging assortment of tax breaks and incentives for businesses. Here’s a brief overview of the tax changes in the Small Business Jobs Act.
Tax Policy Nerds Try to Debunk Each Other’s Debunking Over “The Largest Tax Hike in History” – You may have seen some tax-hating, freedom-loving types waving flags, flying planes with banners and screaming from the rooftops that if the Bush tax cuts expire that it will be “the largest tax hike in history.” The argument has been made and questioned . . . felt the urge to prove the point once again that this will be the largest freedom-hijacking ever:
Welcome to Generation App – How about giving the opposable thumbs a rest and joining the real world? No, I’m not advocating renouncing your phone forever. (God knows, I’d be lost without my iPhone.) But I am suggesting that buying apps is financially illogical. With each purchase, you’re training yourself to do what you should never do: buy on the fly. In short, you’re becoming a full-fledged member of Generation App.
I’m Sick Of Hearing It’s For The Kids – Ever run across someone that gives their children everything? And then you find out the parents are struggling to keep their heads above water financially. Not “we’re just getting by.” No. I mean one month they don’t pay cable, another month they miss the electric bill; the rent gets paid late; always something and always “it’s for the kids!”
Homemade Gift Series #4: Homemade Beer
Corporate tax reform: a dividends paid deduction? – A withheld tax on distributions to tax-exempt entities would keep the income from avoiding tax altogether. A dividends paid deduction would also eliminate the bias for debt over equity in corporate capital structures.
Check For IRA and Roth IRA Excess Contributions To Avoid a 6% Tax Penalty – Even though the average IRA contribution is $3,798, many Americans are still contributing too much to their traditional IRA or Roth IRA account without realizing it. The combined limit for a traditional and/or Roth IRA accounts is $5,000 ($6000 if you are over 50). For married couples, the combined limit is $10,000 ($11,000 if only one of you is age 50 or older or $12,000 if both of you are age 50 or older). If you find that you have made excess contributions, you must remove them before year end or face a 6% penalty for excess contributions
Last week I wrote about 529 plans. Here is another piece from a PF blogger. 529 College
Savings Plan Parent Overview – The 529 college savings plan can be a great way for parents to save money for college for their kids. If you’ve been delayed in saving for college here are some tips from the Financial Planning Association to help you get started saving with a 529 plan.
I just found Money Blue Book.
2 ways to stay afloat during financial storms – According to the National Association of Colleges and Employers (NACE), only about 25 percent of college graduates who completed job applications in May 2010 actually found work, compared with half who did so three years earlier. And the unemployment rate among college graduates aged under 25 is running at nine percent. The news isn’t much more cheerful for those who do find work. Salaries fell for those with bachelor degrees from the class of 2010 when measured against those of their predecessors in 2009.
How Much To Save and How To Do It – Walter Updegrave, a senior editor of Money Magazine, stated “As much as I’d like to be able to tell you to save 10%, 15%……the percentage of income that’s appropriate for you will depend on your income, age, the amount of money you’ve already saved, your employment prospects and, most important, how much you’re willing to forgo immediate gratification for current and future financial security.” Although a general target and good starting place is 10%, some might be able to put away more whereas others might be hard pressed to save 5%.
Practical Economics: Incentives Shape Our Decisions – Incentives prod us or repel us in our decision making process. We regularly choose an economic course of action based on our belief that the result of that decision will benefit us, alleviate pain or grief, benefit a cause we believe in, or otherwise bring us pleasure.
It’s (Not) Inconceivable! – Ask someone under 25 to listen to Kid Rock’s song All Summer Long, and chances are pretty good that when it gets to the “We didn’t have no internet” line they’ll look at you and say… “No internet?! What did you DO?!”
Gen X & Gen Y – Dialing Financial – Six Reasons Why Gen X & Gen Y Need Some Serious Financial TLC.
Social Security Planning: It Can Be Easy To Understand With These 7 Tips. – Social Security is a hot topic these days… …and if you don’t understand it, it can get pretty confusing!
In order to understand the hot topic centered around this issue of social security being around when you retire, you must understand its beginning.
In 1935 the Social Security Act was signed into existence, with the full retirement age at 65 and life expectancy at only 62.
At What Retirement Age Can I Claim My Social Security Benefits? – Knowing your full retirement age is the first step… This is the 1st tip in a series entitled “The Nuts & Bolts of Social Security in 7 Easy Tips.”
The discipline of fiscal and physical fitness - Life is full of choices. You can decide to work out instead of couch surf, or save for a down payment instead of buying designer sunglasses. When you really start to think about it, the same kind of fiscal discipline that applies to living on a budget also rings true for keeping up with a physical fitness regime:
A Week in Perspective
New PTIN System Set in Motion by IRS – On Tuesday, the IRS officially implemented its new Preparer Tax Identification Number (PTIN) system. From now on, all tax preparers will have to be issued PTIN (even if they already have one) in order to be qualified to prepare and submit tax returns for their clients in 2011. This included all paid classes of tax preparers including CPAs, enrolled agents and tax attorneys. This is in line with the IRS initiative to properly register and regulate the thousands of tax preparers in the country.
Tax Professionals Must Now Pay The IRS For The Right to Prepare Tax Returns PTIN’s Are Now For Sale – Well, now a tax professional must buy the right to prepare a tax return. I suppose this isn’t any different from having to pay a fee every year to renew my CPA license. Just one more thing to add to my overhead costs.
Problems with PTIN Online System? Don’t Wait to Register – Tax preparers heads up, according to the new IRS rules, you have until January 1, 2011 to register for your PTIN (preparers tax identification number). I’m getting a little concerned about the IRS’s ability to GET IT DONE by the January 1, 2011 due date.
Online PTIN Application Now Available, But… – The IRS released the final regulations for the new PTIN process for tax professionals. There’s an FAQ available, too.
Don’t you feel more competent already?
Is it reasonable for Congress to demand “Plain Talk” from the IRS? – Bottom line: if we Americans want a tax code that we can understand, we need to demand it directly from Congress. This is my favorite post this week.
Don’t Let a Rule of Thumb Rule Your Wallet – Rules of thumb are great little guidelines when you’re talking to large groups of people. A perfect example is the “rule” that you should have “1.5 times your annual salary by age 35″ described in the recent retirement checklist from CNNMoney. If you’re in that age group, you can read that rule of thumb and quickly compare your current retirement savings to get a general idea of what kind of shape you’re. If you have $5,000 and you make $35,000 a year, you might be panicked enough to start beefing up your retirement savings. If you’ve make $35,000 a year and you’ve got $100,000 socked away, you’ll probably feel that you’re ahead of the game. There’s just one problem…
Varying cost of living – it depends on the lifestyle you aspire to.
Taxes on garage sale earnings – The federal tax laws provide for IRS collection of tax on capital gains. So, notes IRS Publication 525, “if you sold an item you owned for personal use, such as a car, refrigerator, furniture, stereo, jewelry, or silverware, your gain is taxable as a capital gain.”
But who’s ever had a capital gain on an exercise bicycle, old toys or an out-of-style suit sold at a garage sale?
Now we know what happened or is happing with Monica L. over at Confessions of a CPA. She landed a job. Nicely done Monica. She explains in her post First Days.
Tax-Exempt Tips For Oct. 15 Due Date –
BlogRoll Beans – September 28th edition.
Cure for the Financially Overwhelmed - Do you experience any of these symptoms when thinking about your personal finances: Budget dizziness, Debt fever, Sweaty emergency fund palms, Late fee hair pulling, Banking knots in your stomach, Retirement savings rash. If you experience any of these symptoms when you think about your finances, I am not a doctor but I believe you have what is called financial overwhelmedness.
Tax cut timing could be costly
Bye, Bye Paper – The IRS has announced that they will no longer be sending tax packages to individuals or businesses. Later in the year, they will send a card to taxpayers (ind and business) who prepared their own paper return last year notifying them of the change and telling them how to obtain the forms they need.
Tax Help News: Seven Deadly Sins of Tax Resolution Every Taxpayer Needs to Know
Tax Foundation Releases Two Reports Focusing on High-Income Taxpayers – The Tax Foundation has released two reports focusing on the expiration of the Bush-era tax cuts and high-income taxpayers: one examining top marginal effective tax rates by state, and another profiling demographic characteristics among top earners.
Should the IRS Give Taxpayers an Itemized Receipt? – What is provided to a taxpayer with a $5,400 tax bill? Nothing. For many Americans, the amount they pay in taxes is larger than any purchase they make during the year, but studies show they know almost nothing about where that money goes to.
US Savings Bonds – What Are Savings Bonds and How do They Work?
The Importance of Cash Flow Management – One of the most important aspects of managing your personal economy is understanding where your money is coming from, and where it is going. You should also know when all of this is happening. Cash flow management in your personal finances is important, since it keeps you from overdrawing your account and helps you plan ahead for larger expenses. When you know how money flows through your personal economy, you are in control.
What is the Difference Between HSA and FSA Accounts?
Use Flexible Spending Account Balance by End of Year – If your health insurance plan provides a Flexible Spending Account or FSA option I highly recommend you use it. You are getting a tax break for every dollar you put into the account. If you use those dollars toward eligible healthcare expenses then you never pay taxes on that money.
Yes, you read that correctly.
The Soft Skills You Need to Get Hired There are Old School tactics and there are New School tactics for every facet of job seeking. One key to your success today is knowing how to capitalize on your soft skills. Wondering what your “soft skills” are? Read on!
H&R Share Prices Expected to Drop due to IRS Action – H&R Share Prices Expected to Drop Due to IRS Action. In the next tax year, the IRS has declared they will no longer supply tax preparers the ‘debt indicator’ of a taxpayer. The debt indicator is a code the IRS has provided every year to tax preparers that indicate the amount of tax refunds the taxpayer is entitled to receive. The debt indicator information supplied by the IRS would include any amounts of child support, back taxes and other debts that would reduce the amount of refunds.
Making Work Pay Credit not likely to be extended – Congress’ effort to stimulate the economy included pushing through a series of tax breaks in 2009. The centerpiece of the legislation was the Making Work Pay Credit, which was intended to provide tax relief for working and middle class families. It may not last beyond this year. The idea was to allow more taxpayers to have cash in their pocket during the year, as opposed to at tax time, by adjusting the amount of earned income withholding.
Tax Reform Discussions in 2011? – “Rep. Levin seeks early action on tax reform next year” reports that the House Ways & Means Committee chair wants to have lots of tax reform hearings in 2011. He says: “We’re serious about looking at our tax code.” The Hill also reports Congressman Levin saying that reform needs to happen in a non-election year.
Something about tax cuts from The Onion – Follow her link it is a must read for sure.
ARE WE BEING RUN BY ARSEHOLES? – THE DAILY SHOW had a bit that asked the question “Are We Being Run By Arseholes?”. The answer they came up with was an obvious “Yes”.
Tax breaks in the new small business bill
Small Business Jobs Act of 2010 – On September 27, 2010 (Monday), President Obama signed an additional economic stimulus bill – the Small Business Jobs Act of 2010 (H.R. 5297).
Small Business Jobs Act of 2010 Into Law – What it Means for You
HR 5297 Small Business Jobs Act of 2010 Outline of Tax Stuff – This is wonderful. Thanks Stacie.
Buying Long-Term Care Insurance To Save For The High Cost of Assisted Living – There’s a great deal of talk today about the “graying of America.” Thanks to advances in medical technology, many people are now living 20 or more years beyond normal retirement age. However, quite a few of these people must deal with poor health during those years. And, the increased longevity, coupled with expanded health care needs, can place enormous social and financial strain on these individuals and their loved ones.
A week about What is a Series LLC and more. Be sure to check out the whole week of post over at Diane Kennedy’s US Tax Aide blog.
An great answer to a frequent question Ask the taxgirl: Reporting Income Not on a W-2
Also today another round up A Post Wall Roundup.
The blogroll works now Thanks Joe.
Currency – A New Financial Site for Young Adults – Currency offers great content, featuring writing from over 25 leading personal finance writers (including yours truly!) from various backgrounds, including journalists from major publications, best-selling authors, and a variety of bloggers from different genres such as personal finance, career advice, travel, lifestyle, and related topics. The articles are written in a fun and informative manner, featuring a more personal and conversational approach than you will find at most financial websites.
In a blogging friend scurry to get his clients extensions done, he posted yesterday A TAX FIX, directing you to his other writing gig as he hasn’t been posting at TWTP in his effort to “GIT-R-DONE”
Three Quickbooks Shortcuts to Save You Time!
Homemade Gift Series #3: Caramel Apple Jam – So what exactly do you do with eight and a half pounds of apples? You make something with them, of course.
Reads From Last Week
Last week I wrote two post that weren’t exactly about taxes. In them I mention taxes, but Each one isn’t “about” taxes. In my post The Company Balance Sheet I talk about what is in a balance sheet. Thursday I posted Mistakes made in QuickBooks. In this I talk about things I get tired of seeing when I go out and help clients with their QuickBooks bookkeeping. Simple mistakes, that can ultimately, can and will affect the survival of a small business. If you’re a business owner all prejudice aside I say you should read them both.
Today’s taxes aren’t too bad –Kay Bell writes, “when compared to where tax rates have been over the years, we’re in pretty good shape” I agree. She also continues her mid year tax tips with
- Midyear tax tip #1: Welcome summer with energy-related tax breaks
- Midyear tax tip #2: Plan health care account moves
- Midyear tax tip #3: Adjust withholding – This is my entry
- Midyear tax tip #4: Evaluate your estimated tax situation
- Midyear tax tip #5: Pay attention to your portfolio
- Midyear tax tip #6: Credit for day camp costs – Thanks for the calendar by the way.
- Midyear tax tip #7: Contribute to your retirement accounts
- Midyear tax tip #8: Get charitable
- Midyear tax tip #9: Bunch your deductions
- Midyear tax tip #10: Get organized
And everyone seems to be writing about it but, here it is in easy to understand words Homebuyer tax credit extended; closing date deadline is now Sept. 30. Also from Kay:
A little humor about the oil spill/leak – BP Spills Coffee
My friend The Wondering Tax Pro re-reveals his thought on the new rules pertaining to the mandate for all prepares to e-file. In his post WORDS FROM THE WISE, he shares comments from friends and colleagues’ and his points as well. I can assure all, his efforts on how he proceeds will be of great interest to myself.
In His Saturday BUZZ Robert writes:
* The IRS wants to hear from you, or so they say in “IRS Requests Public Input on Expanded Information Reporting Requirement”.
The Service is soliciting “public comment on how to most effectively carry out a law change that, starting in 2012, will require businesses to report a wider range of payments to contractors, vendors and others, usually on Form 1099. These comments will help the IRS issue guidance that implements this provision in a manner that minimizes burden and avoids duplicate reporting.”
If you plan to give the IRS a piece of your mind please be gentle. Remember, the IRS does not make up this nonsense – the cafones in Congress do!
Musings on artisan bakers and tax preparers is more on this from fellow blogger Mary O’Keeffe over at Bed buffaloes in your tax code . She is great. Unfortunately however the Free Fillable Forms option isn’t as good as it sounds as she continues with I withdraw my suggestion of Free Fillable Forms! If you have ever wondered about free filing your forms read this first.
Friday Mary Wrote Do US Presidents efile their tax returns? Not only is the information thought provoking, but it has a link that will take you to site where you can see the returns of past presidents. It also mentions another return that H & R fail at. A great article in all. So you know this follows the ever growing movement concerning mandatory e-filing for tax preparers.
My friend also writes about home ownership in THE AMERICAN DREAM? Damn, he has a good idea.
I sincerely believe that all high school students (or perhaps starting earlier) should be required to take a full-year course of study in financial stewardship (which would include a chapter or two on income tax).
If you only read one link from this list, make it THE AMERICAN DREAM?.
Waiting on a refund from your state? Roni Deutch tells on “7 States that Still Owe their Citizens Refunds” Sadly I have been dealing with this as I have clients in two if the seven.
Jim Maule write the Blog MauledAgain. He has these post that I think are great reads so go read these.
If you receive a notice from the IRS. The IRS Hitman has some great advise in his post Watch our for IRS Notices. One of the best things to do when you receive an IRS Notice in the mail is to contact a Tax Professional immediately. Here’s what you need to know before your submit an Offer in Compromise to the IRS. More Harsh Truths on Settling Tax Debt
I really liked the math in Joes post 600 million becomes 100 million; 75 jobs becomes 25
The other post from JK that I really liked was If you remodel by starting over, you need to move back in. To get the whole just of this make sure you read the whole thing.
Kelly Phillips Writes Are Middle class increases on the way over at WalletPop
Tans are taxable today – Alrighty then. A 10% tax on indoor tanning services.
The providers will have to pay the tax via quarterly filings on Form 720. The IRS has posted “Nine Tips on the 10 Percent Tax on Tanning Services” This Started July 1rst, 2010. Oh man, can you believe it? – Nine Tips on the 10 Percent Tax on Tanning Services
New CBO Report Shows Rich Paying More than Fair Share – interesting article from the Tax Policy blog, kind of goes on with premise that today’s taxes aren’t so bad.
Presidents, the Tax Burden and Corruption – Explaining Economic Growth I originally found this over at the Tax Prof blog titled Raising Taxes Leads to More Economic Growth and Private Investment. Wow what a theory.
Last week I didn’t get any PF blogs in as I wrote that post in a hurry. One that still holds in my mind though is from Kevin over at No Debt Plan. His post Is a Housing Shortage Headed Our Way? Is an interesting read.
My friend Penelope over at Pecuniarities, re posted her article Put Your Brain Where Your Money Is: Think to Save. This is a well to know lesson and one that I feel is in need more than ever. People need to think. (And not just about money.) Week before last she also posted The Frugal Literate’s Guide to Affordable Reading. I love to read. Thanks Penelope, I learned a few things I think I’ll teach my children.
Handling Debt Collection Calls and Stopping Creditor Harassment by Knowing Your Rights, is a great article, filled with exact advise. A guest post over at Saving to Invest.
Essential Personal Finance Tips For Women in 2010 has some scary statistics, but also holds a valuable read.
Personal Finance Advanced Tips For Young Adults Parents, a must read then have you children read it. Other great reads from A Personal Finance Guide:
- Open a Bank Account Online the Easy Way
- How to Really Save Money For These Modern Times
- The New Limits to Bill Collection
Classic Debate: Should You Pay Off Your Mortgage or Invest That Extra Money? If you thought or think about this read this post.
Cash Money Life has a few great post that are good reads:
- Factors That Affect Mortgage Interest Rates
- How Easy is it to Get Scammed by Online Loan Companies?
- Mortgage Prequalification vs. Preapproval
- How New Overdraft Rules will Affect You
Realizing the Cost is a thought provoking post if you are considering a new pet or children. And if you like that then be sure to read Involuntary Simplicity.
For those of you who are persistent and plan to buy that house, How Much Can I Afford For A House? A Checklist Is a good read.
Importance Of Knowing About Tax Tips And Benefits
According to the Washington Post “Money Can Buy One Form of Happiness, Massive Global Study Concludes”.
P.S. There seems to have been an addition over at Alltop in the tax section, but it isn’t us, not yet. If you’d like to have The Missouri taxguy added to their “magizne rack” please let them know.
Also I have added The Missouri taxguy over to (over at) Alexa a Web Information site. If you’d like please add a review of The Missouri taxguy.
Thank you and have a great Fourth.
IRS TAX TIP 2010-06
I have and will continue to post extensively on choosing a Tax pro. I am hopful everyone uses cation when doing so. If you haven’t read my post (several indivdual and a few series of. . .) please do so, for you. The IRS puts this out every year but not to the extent that your tax bloggers do.
Get started here, then please serch my blog and the web for what is being said on this.
Eight Tips to Help You Choose a Tax Preparer
The IRS urges people to use care and caution when choosing a tax preparer. Remember, you are legally responsible for what’s on your tax return even if it was prepared by an another individual or firm.
Most tax return preparers are professional, honest and provide excellent service to their clients. However, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients. Therefore, it’s important to find a qualified tax professional.
The following tips will help you choose a preparer who will offer the best service for your tax preparation needs.
- 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.
- Check on the preparer’s history Check to see if the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association for attorneys.
- Find out about their service fees Avoid preparers that base their fee on a percentage of the amount of your refund or those who claim they can obtain larger refunds than other preparers.
- 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 April 15, in case questions arise.
- 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.
- Never sign a blank return Avoid tax preparers that ask you to sign a blank tax form.
- 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.
- Make sure the preparer signs the form A paid preparer must sign the return 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.
You can report abusive tax preparers and suspected tax fraud to the IRS on Form 3949-A, Information Referral or by sending a letter to Internal Revenue Service, Fresno, CA 93888. Download Form 3949-A from IRS.gov or order by mail at 800-829-3676.
Links:
- Form 3949-A Information Referral (PDF 94K)
Where Do You Report Suspected Fraud Activity?
With e-file up and running, it is time to find yourself a preparer.
A little Professionalism, if you please.
Earlier this past week I noticed a post(1) from a blogging colleague. I mention this as although his said intentions were set and designed to inform taxpayers, I found not only a few things wrong with the post, but also felt like the post was an attack. The attack was not to just a good blogging friend and colleague, but to other such professionals as well. Moreover, I am not just referring to tax professionals.
Please, let me explain better.
There has been an ongoing, somewhat group, discussion about the pending and upcoming regulation of tax preparers. In the post referenced above it is clear that the subject is surrounding this topic.
It is clearly pointed out “Although these tax preparers may in some cases be quite competent. . . in the author’s own right, he continues with “. . . the fact is (the highlight is mine) they are unregulated and not answerable to a direct regulatory authority or held to an objectively determined set of standards.”
I argue this. I argued this point a while back and do so still today.
I have written many posts, and a series of posts and guest post, covering the topic at hand, hiring a competent professional preparer. (2) However, taxpayers, we are finding, still manage to find those preparers who, well for the sake of not having a longer post than necessary, are plain unworthy.
However, let us back up a bit. First, to be clear, what/who that is being discussed, is what the IRS classifies as an “unenrolled tax preparer”. (Defined below)
Now then, let us correct the highlighted statement above. It says clearly, “. . . they are unregulated and not answerable to a direct regulatory authority or held to an objectively determined set of standards.”
Yes they are.
Let me say that more informatively, quoting from IRS Publication 470 Limited Practice Without Enrollment:
First lets understand what IRS Publication 470 is:
“The purpose of this revenue procedure is to prescribe the standards of conduct, the scope of authority, and the circumstances and conditions under which an individual preparer of tax returns may exercise, without enrollment, the privilege of limited practice as a taxpayer’s representative before the Internal Revenue Service, pursuant to section 10.7(a)(7) of Treasury Department Circular No. 230”
Okay as I read the above, IRS pub 470, and revenue procedure 81-38 has a purpose. This purpose – to “prescribe the standards of conduct, the scope of authority, and the circumstances and conditions under which an individual preparer of tax returns may exercise, without enrollment” By all rights, that should end the argument there, but no, let’s keep going.
For a moment lets go back to our highlight, is says unenrolled preparers are unregulated. Since definitions are important –by way of Merriam-Webster Dictionary
Regulated means:
1 a : to govern or direct according to rule
b (1) : to bring under the control of law or constituted authority (2) : to make regulations for or 2 : to bring order, method, or uniformity to
So unregulated would be the opposite of the above quote box, accurate?
If I put this all together, I see that according to this IRS publication, Unenrolled prepares are regulated by the IRS as prescribed within Publication 470. Therefore, to say they are not is, well, not accurate.
Surely, we can all agree that the IRS is a regulatory authority. Humm, I would think yes.
Thus, one may conclude that the IRS is the regulatory authority over all unenrolled preparers. Yes?
“Sec. 3. Applicability.01 This revenue procedure, issued pursuant to section 10.7(a)(7) of Circular 230, applies to all unenrolled individual preparers of returns who seek to represent taxpayers, within the United States, before examining officers in the Examination Division of an Office of a District Director of Internal Revenue or in the Office of International Operations.”
Clearly, this publication applies to all unenrolled preparers.
“.02 This revenue procedure does not apply to attorneys, certified public accountants, or agents who are enrolled to practice before the Internal Revenue Service. The rules governing the practice of such persons before the Service are contained in the provisions of Circular 230.”
Clearly this publication does not apply to attorneys, certified public accountants, or agents who are enrolled to practice before the IRS.
So now we know what this publication is for and who it is for.
Okay, so if you turn to page 2 of this publication, Section 7 is titled, Ethics and conduct. But wait according the post (1) unenrolled preparers have no such guidance.
Sec. 7. Ethics and Conduct .01 An unenrolled preparer shall act in such manner as not to commit any act of disreputable conduct. Disreputable conduct includes, but is not limited to, the items contained in section 10.51 of Circular 230.
Wow, unenrolled prepares are held to the same ethics and standards of conduct as all those who are regulated by Circular 230 Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, Enrolled Retirement Plan Agents, and Appraisers before the Internal Revenue Service.
My point here? Well, the post that questions unenrolled prepares does so with the premise that unenrolled preparers are not “held to an objectively determined set of standards.”
Although IRS Publication 470 Limited Practice Without Enrollment is out dated and needs to be updated, the premise of what it states is clear, within this publication are the rules and guidelines for which unenrolled preparers are being held to an objectively determined set of standards.
And within that document, if one is truly in the know about IRS rules and regulations, they know unenrolled prepares are held to the same high standards in Circular 230 as those for whom it was written for, prepares of tax returns.
When I first read the post, I asked the author, “Are you Serious?” The response: “I am dead serious. What part of what I wrote do you disagree with?” Well, I think above I covered much of what I disagree with. He continued with “What is your definition of a “profession?” Now in the post, he defines this for us by way of Merriam-Webster Dictionary:
1 a : of, relating to, or characteristic of a profession b : engaged in one of the learned professions c (1) : characterized by or conforming to the technical or ethical standards of a profession (2) : exhibiting a courteous, conscientious, and generally businesslike manner in the workplace.
Lets add his other definition:
Investor Words.Com defines profession as, – An occupation, especially one which requires an advanced education.
A profession is indeed an occupation. A professional then would be one who held an advanced knowledge of his/her profession. Yes?
Now here is where he and I will bump heads so to speak. Could the forklift operator of 30 plus years be a professional, because he does his/her job, proficiently? He/she may have been trained, yet he/she may have many years of experience doing this job. If experience were the best teacher, would not years of doing the same thing repeatedly, at some point, make him/her a professional fork truck operator?
My colleague says no. “The reason for this is simple and obvious: No impartial third party regulatory body has determined his core competence.” Really? What of the dancer, the actor, or musician and comic? So what of the landscaper? What of the carpet cleaner? Are they truly not professionals because no “impartial third party regulatory body has determined there core competence”? Not the same thing? I beg to differ, it is. These are all professions, and they all are called professionals.
By what he is saying, Paul McCartney is not a professional. Disagree? Then please point out for us what impartial third party regulatory body has determined his core competence in music. Remember he says “impartial”
Going back to Merriam-Webster Dictionary:
impartial – not partial or biased : treating or affecting all equally
Sadly, I fear my colleague sees only white-collar professions, by the definitions that are posted on his site.
Yet my biggest problem of all, this post drags a good friend and colleague, down to mist of the idiots. He will not see this and that is fine.
My grandmother is very much as he is, really the only difference in the two, is she is over 90. I have to wonder then if he, like her, believes that one should not wear black all the time.
She told me once that professionals do not wear black all the time, in her mind only convicts and truck drivers wear black all the time. That very same year Jeff Goldblum (a professional actor), in an article voiced that he always wears black.
Hummm that story should be for another time.
Anyway, I felt obligated to share the post with my friend. In turn he wrote “I AM A PROFESSIONAL!”
And in good debate-like a lawyer form, this post was written Professionalism: The Cafone’s Rebuttal.
For which I asked him, “Was this really necessary?” referring to did he really truly feel he needed to continue the professional insult to our colleague, my friend.
The reply:
\”Bruce, I suppose nothing I write is \”necessary.\” But I thought it was appropriate given the recent proposals by the IRS to regulate unlicensed tax preparers.
And in response to your email, I didn’t personally attack anyone. You and Robert, more than anyone else should want IRS regulation of preparers so you can differentiate yourself from all the shmucks’ out there who call themselves tax pros. I never once said or implied that Robert or you are NOT excellent tax preparers. After reading your blogs, I’d refer clients to you myself.rt, more than anyone else should want IRS regulation of preparers so you can differentiate yourself from all the shmucks out there who call themselves tax pros. I never once said or implied that Robert or you are NOT excellent tax preparers. After reading your blogs, I’d refer clients to you myself.\”
I politely thanked him for any referrals sent my way and left it at that other to let him know I would be writing this post. (This can be seen on my facebook page)
Before I was able to get this post out, two more post were published. Profession Defined is a post that in a clearer manner, explains or defines the word “profession”. Then this, Beware the Unlicensed Preparer.
Sadly, I found this in poor taste. Believe what you will about “the unregulated or unenrolled preparer”.
Try this:
I challenge any attorney, tax or otherwise, CPA, EA, or what have you, whom are clearly defined in Circular 230 and not living in California, Oregon, Maryland and New York (After 01/01/2010), or other such States – show me your license to prepare tax returns.
Well?
Humm.
I wonder, if you are following the words being said;
“IRS Commissioner Doug Shulman says the agency is working on a series of recommendations that are meant to increase taxpayer compliance and improve the work of tax preparers. Those recommendations may include a call for all paid tax preparers to be licensed in the hopes of “reducing mistakes and combating fraud.”
That includes everyone, CPAs, Attorneys, EAs, and unenrolled preparers alike. Then at that point, those who will be licensed will be all of it. Meaning, the unenrolled preparer is going to be added to the list of folks who “are” allowed to represent taxpayers100%.
Or is that why some of you are so defensive and abrasive to those who are unenrolled? Your pissed because not only will you, the Tax Attorney, or you, the CPA, or you, the EA may have to get a license (maybe, the ground rules are still not set), but you’ll no longer have the market on representation of taxpayers before the IRS.
News flash, monopolies are illegal. Taxpayers need to know the truth about the misconceptions within those ranks. Others are just as / can be as capable of taking the tax classes being held at those reputable universities. Earning CPE in taxation, and as pointed out, ethics.
Aside from the required CPE that Attorneys and CPAs are required to take, there are only a few true differences between what they can do and what an unenrolled preparer cannot.
I would also point out that the Attorney isn’t required to take CPE in taxation. The CPA isn’t required to have taxation CPE. The only ones in the IRS group of specialist that are required to take CPE in taxation are, EA’s.
For those of you in those ranks whom I have or may have or may later offend, I am not a part of your click, been there done that, unimpressed.
Don’t like it?
FO!
Learn to be civil.
(2) Choosing a preparer – this link will take you to post that appear here (this blog) covering this. There are 24 in all.
Reference material:
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Publication 4019 page two. It is not a list per say but will show plainly the “differences” of form 2848 and form 8821.
Definitions:
- unenrolled tax preparers – An individual who prepares and signs a tax return as the preparer, or who prepares a tax return but is not required to sign the tax return.
- Practice before the Internal Revenue Service – comprehends all matters connected with a presentation to the Internal Revenue Service or any of its officers or employees relating to a taxpayer’s rights, privileges, or liabilities under laws or regulations administered by the Internal Revenue Service. Such presentations include, but are not limited to, preparing and filing documents, corresponding and communicating with the Internal Revenue Service, rendering written advice with respect to any entity, transaction plan or arrangement, or other plan or arrangement having a potential for tax avoidance or evasion, and representing a client at conferences, hearings and meetings.
21 Questions you MUST Ask to Choose the RIGHT Professional to manage your Taxes
Image via Wikipedia
by Nick Hodges
The Internet super-highway opens up marvelous opportunities for you to harvest tax advice and information from some of the greatest minds at reasonable prices from anywhere in the world. But it also emphasizes a crucial question: How do you know whom to trust? Sharing your intimate, personal financial information with a stranger is problematic at best.
Here are 21 questions to help anyone choose a tax and/or a financial professional you can trust.
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Physical office. Do they have a physical office that you can visit? Even if you never have to meet them face-to-face, the professional integrity required of a firm conducting a bona fide business should be considered.
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Reachable contact person. Is there an actual person who will be ultimately responsible to take care of you and your financial world?
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Valid licensure. Does their home state licensing board affirm that the tax professional you would like to use has an active license in good standing?
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Clean history. If the tax professional is also a registered investment advisor, does their state or the SEC affirm that they have a clean history?
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Age of business. How long have they been in business? If they are too new, they may not have the experience necessary for your unique situation. If they are nearing retirement, they may not have the interest to stay current with the changing regulations.
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Size of practice. Are they a sole-practitioner? Or do they have an entire team of professionals to help serve you? If you are dealing with just one practitioner, what do you do if something happens to them? Do you know who will help you if the IRS decides to coming knocking at your door?
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Experience of a professional, how big is too big? Will you have access to the senior professionals in the firm, or are you working with firms so big you are just getting the inexperienced junior preparers? Those who work at large, international corporations often have the opportunity to use large, international accounting firms, and pay thousands of dollars just to be ignored by inexperienced junior preparers. Larger is not always the better choice.
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Reputation of firm. Does the firm specialize in keeping and building long-term relationships with their clients? Do you know what are their clients are saying about them?
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Related services. Does the firm offer other services to help you so you can get the “one-stop financial shopping” you need? If so, what are they offering? How do they help you understand which services you really need?
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Name recognition. Are they nationally-known in their industry? Do they teach other tax professionals? – The best way to really know something is to teach it to other professionals.
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Online presence. Do they have a website?
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Ongoing support. Can they continue to help you after you return to the US?
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Entrepreneurial support. What if you start a business? Can they continue to help you?
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Tax forms. Do they know the proper use and filing of forms. More importantly, can they explain them to you in simple enough terms to help you really understand the tax challenges of your situation?
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Fees charged. Are they charging too little for you to receive the quality, professional service your situation requires?
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Quote for service. Are they charging too much (sometimes thousands of dollars), or do they hesitate to give you an upfront quote?
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Personal interaction. Will a live person speak to you before they take your money?
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Tax organization. Will they provide you with a specialized tax organizer to help you gather all the information you are going to need?
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Tax law updates. Do they send out a newsletter to keep you updated on tax law changes?
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Information sharing. Will your personal, private information be shared with outsiders or shipped out of the country for processing?
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Comprehensive coverage. Do they offer to go beyond just getting the numbers right, to working with you to get the answers right for your entire financial world?
Take the time to thoroughly interview the tax professionals you are considering to help you manage your taxes.
This simple step, interviewing a tax professional, could save you from creating sticky situations in the filing and management of your taxes.
Nick Hodges,
President of NCH Wealth Advisors
The above post was edited. I did so in order for this guest post to be relevant to all taxpayers looking for a tax professional. For more very relevant information please see my post Find a Tax Preparer that is right for you, Should I do my own taxes. . ., Choosing a tax preparer. . ., More on “finding a pro”. . .
Also check out my series on the subject that starts with Mistakes Made. . .
I’m Back with “Who is”
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!
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