Frequently Asked Questions about Tax Preparation
It is impossible to answer this question accurately without knowing all that is required for your specific return. We charge based on the complexity of your return. We have evaluated the complexity, knowledge, liability and preparation time involved with each possible form on a tax return, have assigned each form a value, and the sum of the forms required to accurately prepare your return is the basis for your fee. Until we have done your return, we cannot possibly guess what the fee will be. However, we can say that our rates are very competitive with similar firms offering similar depth of service, education and support. Our prices are not the cheapest (unlicensed preparers practicing out of their homes are usually less expensive), but they are far from the highest. We know this because we look at what our new clients paid other preparers for returns (it is a tax deduction, after all!) Often, our fees for essentially the same return are less. We can also state our minimum return is $400. Again, your situation is unique to you, and each year is unique from the prior year. Your fees will vary from these numbers. We provide these figures simply to give you a guideline of what to expect.
We have a list of items to bring you can download.
Generally, we strive to have a return completed within two weeks of you providing us your documents. Sometimes, we find additional information is required and will reach out to you for “homework”. At that point, your return is on hold until we get our questions answered and/or you provide us with the documents we are requesting. Once we have completed your return, we will reach out to you to schedule a review appointment with you and your preparer to review your return.
The IRS used to publish a list of dates correlating filing dates with refunds. For a variety of reasons, this has changed. Starting in 2017, by law, the IRS cannot process refunds for people who claim the child tax credit or the earned income credit until February 15 at the earliest. This can mean the actual refunds are delayed until February 27 or later. For persons not claiming these credits, the IRS is stating that roughly 90% of filers with refunds will receive them in 21 days or less. You can track your refund once it is accepted by the IRS using the “Where’s My Refund?” tracker on the IRS website or the IRS2Go app for your smartphone.
During filing season, preparers are usually tightly scheduled with little time between appointments, therefore, in this time period, it is generally best to communicate through the administrative staff. Some preparers are busier than others (Laura Strombom tends to be the most tightly scheduled) and will have difficulty returning phone calls directly during generally accepted calling times. Email can also be a very effective way to communicate. Do not be afraid to ask detailed questions of the administrative staff; if they cannot give you the answer, they will track it down, even if they have to ask the preparer while they are grabbing a quick bite to eat or walking past them. We also have an internal messaging system that allows the administrative staff to ask questions of preparers while they are in an appointment. Many questions can get a quick answer using this method. If the question is too complex to answer using this method, it is probably best for you to send an email.
YES! We strongly believe in the benefits of electronic filing. Electronic filing is the fastest, safest way to file your return. According to statistics previously provided by the IRS, there is nearly a 20% error rate on mailed in returns keyed into the system by the IRS, while electronically filed returns have less than a 1% error rate.
NO. We do not believe in the Refund Anticipation Loan products. Why? Because the equivalent interest rates on these loans are in the hundreds, and sometimes thousands, of percents. How is that if they only cost $100? Because you can have your refund in your account if you efile and use direct deposit in as little as seven days! If you pay $100 to receive a $1,000 refund in 1 day instead of 7, you have paid a 608.33% annualized interest rate! Most often the people who want these loans are the ones who can afford to lose that extra hundred dollars the least. We believe it is wrong to take your money in this manner. Few companies can offer loans secured by your tax refunds now as the Congress changed the way refunds are processed. Some are issuing small loans in advance as a marketing gimmick to get you to use their company. These do not charge interest, they say, but they do have some fees associated that are still pretty costly. Beware of what you are getting.
We transmit your return when we have all required documentation and the return is completed. Your return is not considered completed until payment is received or other arrangement is made, such as a Refund Advantage product to pay your fees from your refund. The required documentation that must be signed and returned to us includes: the engagement letter, our due diligence forms, and the “Authorization to Electronically File” Form 8879. We will also require any supporting documents needed to claim a refundable credit, such as Earned Income Tax Credit, Child Tax Credit or the American Opportunity Credit.
Yes! We use the portal TaxCaddy where you can upload your documents and we can upload your return to you when it has been completed. With TaxCaddy, you own your own profile, so anything uploaded will stay there forever (unless you delete it). It is a great way to keep track of all of your documents and tax returns throughout the years. If you are interested in using TaxCaddy, please let us know so we can send you an invitation. We also have another portal that we use on this website where we can upload documents and we can send your return, if you do not want to create an account with TaxCaddy.
We will provide you with either a paper copy for $35 or an electronic copy of your return at the time of preparation. If additional copies are required a later date, we will be happy to provide them for you, but we will charge a service fee of $35 per year, regardless of the method of delivery. Why? This is to cover the time associated with processing your request, verifying your identity, and, in the event the return is to go to a third party, obtaining your signature authorization in accordance with Internal Revenue Code 7216.
The Internal Revenue Service can audit back three years, and the State of California Franchise Tax Board can audit back four years. Both agencies can go back additional years, should they desire, if they find errors on the returns they audit and wish to inspect prior years for the same issues. In the case of fraud or suspicion of fraud, both agencies can go back an unlimited number of years. For these reasons, we suggest you keep all records required to support your tax returns for at least four years past the date of filing. Because certain items have an impact on tax returns far beyond this time span, any items being depreciated, as well as records supporting assets, such as your house, should be kept until at least four years beyond the filing date for the year in which you dispose of the item. If you have any carry forward net operating losses or credits, you should keep all returns and records supporting these figures for at least four years past the filing date of the last return to claim any of these figures.
Get the letter or notice to us as soon as possible. We will review the notice for accuracy, give you detailed instructions on how to respond, and advise you of our fee to respond on your behalf, if you so desire. These notices are not always correct. Common notices, such as the CP2000 notice, suggest changes to your return, and if not addressed, become bills with penalties and interest applied. Generally, there is a 30 day response time. In the event that you wish to have us handle the matter for you, we will need signed Power of Attorney documents. These Power of Attorney documents are limited in scope to matters dealing solely with your tax, and are limited to just the forms and time periods specified on the documents. Generally, these documents do not allow us to sign anything on your behalf. In fact, if you wish to have us sign certain IRS documents, and we are willing to take on this responsibility for you, a special area of the form needs to be addressed.
Yes! However, in order to accurately prepare your taxes, we will still ask that you complete our annual questionnaire (to make sure we do not miss anything and to honor our due diligence requirements with the IRS), and we will ask that you sign our engagement letter. Why? Because the engagement letter spells out our mutual expectations of one another.
Mortgage Debt Forgiveness, foreclosure or short sale MAY involve taxable income. Every situation is different, and many circumstances need to be considered. The short answer is maybe. If you have had this experience or are considering going through this process, contact us for a FREE consultation to evaluate your circumstances. Debt forgiveness on a tax return is a complicated process to determine the correct outcome. Sadly, we have seen many tax returns professionally prepared incorrectly. Laura Strombom EA, MBA, NTPI Fellow, has taken significant continuing education on this topic and even wrote an article for her peers published by the NAEA Journal. You can request a copy of the article when you contact us!
This one has many possible issues: Was there an offset on the return that caused the refund to go to pay another debt? If that is a possibility, you need to call the IRS debt offset department at 800-304-3107. Has the right amount of time passed? Confirm the date your return was accepted and make sure you really are due you refund now. If it has been more than 3 weeks and you have verified that the return was accepted, call the IRS at 800-829-4477. Did the refund go to the right place? Verify the address on the return. If direct deposit, verify the routing number and account number and type of account. Sometimes, people forget they went direct deposit and need to check with their bank. I got my federal or state refund but not the other. They do not come together. Federal refunds are generally received within 21 days of acceptance and State of California refunds within 14 days of acceptance.
There are many options: installment agreements, paying by credit cards, offer in compromise or even being considered currently not collectible. The most important thing to do is file, and then arrangements can be made to pay if needed.
Yes! We can help you complete any tax unfiled tax returns back as far as you need to go! Generally, the IRS is only looking for the past 4 years, but if you need to do an Offer In Compromise or discharge the taxes in bankruptcy, all returns need to be filed. California is also far more aggressive at collecting for up to 20 years.
Yes! We literally have clients all over the world! Many we have never met with face-to-face. We correspond via our portal and email, and we do and virtual appointments.
Frequently Asked Questions about Bookkeeping
Our rates are customized to fit your needs based on the frequency of service, transaction volume, skill required for the services needed, and the methods of accounting. Therefore, it is impossible to quote rates online. Our rates vary substantially, with rates as low as $100 a year, and as high as $3,000 a month (the latter involves more than 25 hours per week of onsite accounting work, including full financial analysis, budgeting, sales tax reporting, invoicing, commission calculations, payroll, weekly cash flow forecasting, management meetings, and more.) Most of our clients pay between $200 and $300 per month
Yes! We have many clients for whom we only do their California Sales tax returns. California Sales Tax returns can be complicated, especially if you operate in more than one community. We are very knowledgeable about the California Sales Tax laws. In the event that the California Board of Equalization selects you for an audit, we can also represent you.
Yes! Contact us for a free checklist for starting a business! We offer a free one-hour consultation to help you determine the best choice of entity, and we will help you determine the feasibility of your business ideas. Be prepared: We are going to tell you the truth, and what you need to hear. We are not just going to tell you what you want to hear, because that is not going to help you. We want to see you succeed, and you cannot succeed if you are not getting the right information!