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Old 05-10-2015, 08:37 AM   #21
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Originally Posted by RE2Boys View Post
Possibly in the case of Kinder Morgan MLPs,the back office person may have not recognized that a sale of an MLP usually results in some of the gain to be taxed as ordinary income instead of as a capital gain.
And some firms concentrate on their real profit centers, servicing businesses and their owners and not really putting in the resources to handle lots of individual returns.
Agree, it may be you need to seek out a different firm.
He had all all my tax docs by March 21, and that included one amended 1099. He is a senior preparer at his office (not a principal), and to my knowledge does it all himself, no farming out to underlings. His initial 'ready to go' return on the 13th also included the Kinder Morgan conversion, and we had discussed the fact that there would be ordinary income from that conversion. I even had carry forward losses from previous years to cover some of the gains. So that first return had all of that baked into it. It's just that sometime between april 13 and this past week, something radically had changed in that return, and he never called or emailed me to explain. He left it to his receptionist to call me to "come pick up your taxes". I'm thinking to myself - is this H&R block?? In fact it was my assumption (and I expressed this to him) that to close this out he would call me in to go over and explain everything and then I would sign off. This was unprofessional, at best. I went over his head because he wasn't even there (and didn't bother to call me) when this all went down, and I feel the principal needs to know of my concern and the failure in communication. I am very thankful that I had that email he sent me initially, to show the principal what the last communication was about. The four tax return prep fees this year total just under 3K. I would expect that not only they give me the best service and lowest taxes they could, but that the communication should be excellent throughout.
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Old 05-10-2015, 08:03 PM   #22
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I declined a MLP that my advisor suggested just because I had heard it complicates the tax returns and I like doing my own returns. As far as getting a second accountant, it reminds me of the saying that "if you have a watch you know what time it is but if you have two watches you never know what time it is". I expect this works with accountants as well.
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Old 05-10-2015, 08:11 PM   #23
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I declined a MLP that my advisor suggested just because I had heard it complicates the tax returns and I like doing my own returns.
An IRA would be a good place to keep an MLP without complicating your taxes.
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Old 05-10-2015, 08:29 PM   #24
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I worked in a building that also housed a CPA accounting firm. Nice guy he ran some retirement numbers and numbers about paying my home off early, gratis. During tax season the little TT jingle went off about every half an hour or so.
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Old 05-11-2015, 08:29 AM   #25
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So, if you handed all your financial docs to three separate tax people, do you think you' get three different taxes due amounts?
yes. why are you surprised?
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Old 05-11-2015, 08:41 AM   #26
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Just out of curiosity... when you filed for the extension on April 15th, what tax bill did you pay? I believe at least 100% of your tax bill must be paid when you filed for the extension. If you need to pay more after April 15th I believe you may have to pay a fine. Filing for an extension does not delay when you owe your taxes.
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Old 05-11-2015, 12:03 PM   #27
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An IRA would be a good place to keep an MLP without complicating your taxes.
As long as it isn't a big position. Unrelated Business Income in excess of $1000 results in nasty tax rate for the IRA itself. MLPs and Retirement Accounts

(Came close to this one year, which got me attuned to it....)
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Old 05-11-2015, 12:11 PM   #28
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As long as it isn't a big position. Unrelated Business Income in excess of $1000 results in nasty tax rate for the IRA itself. MLPs and Retirement Accounts

(Came close to this one year, which got me attuned to it....)
Good correction. I just remembered holding a small position in an MLP years ago in a taxable account, and what a headache it made with my taxes. I sold it rather than put it in an IRA.
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Old 05-11-2015, 12:53 PM   #29
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I have a few MLP's in my Schwab IRA, none of which come anywhere near earning $1000 UBI annually. Schwab does the tax filing for the MLPs and copies me with the sent in forms. Piece of cake. Since Schwab is the custodian of the IRA, it's their responsibility to make the MLP filing.

The MLP's I had in my taxable accounts were easily handled with Turbo Tax, especially the ones that provided a file to import 90% of the information on the K-1 form.

OP: sorry to hear of the unprofessional tax preparer. I'd move on or do the work yourself as suggested above.
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Old 05-11-2015, 03:01 PM   #30
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After a similar experience with a tax preparer, I now do taxes myself.

And an experience with work options/RSUs hammered that point home again this year.

Fidelity's 1099s for options/restricted stock vesting and sales were a complete train wreck because they didn't properly show the cost basis or the income tax withheld. Three different sets of numbers on three different pages, none of which were accurate and due to partial block sales vs the original order size, couldn't be easily traced back to the original sell orders. I spent about six hours doing forensic accounting to stitch it all back together and figure out what was really paid/owed. All in, the govt owed me money.



I went to work and bumped into several people with long faces saying they owed $50k in taxes. Each had just turned over their docs to a tax guy who robotically fed the page showing the sales with a $0 cost basis into the computer without thinking or asking why that would be the case. These guys were getting taxed as tho they had gotten the stock at $0 rather than the real issue/strike price!!

I bet I saved other folks at work collectively $250k by telling them how to stitch it all back together (that's IF they followed it and got their tax guy to do it right).

I hate doing taxes, but $-for-$ it's probably the highest hourly pay rate activity I do all year by ensuring I pay the correct taxes. It's a $1k/hour if I avoid a $25k mistake...
Yep - I was fortunate that I used to work for a company that had an internal web page to show you how to do it for both RSU's and options. I made a copy of the document and then created a spreadsheet with instructions. In my case it was Etrade, but the problem is still there in that they didn't track the cost basis for RSU's. Now most of that is income that shows up on your W-2 and even though I've always sold them as soon as they vest, there still always an annoying small cap gains (or loss) to keep track of.
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Old 05-11-2015, 07:15 PM   #31
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To the OP...

Again, this was way back when I did taxes and read articles about taxes...

There was some group that had a contest with very complicated issues... professionals would submit what they thought the return should look like... IIRC, there were hundreds of submissions, but only ONE was prepared correctly.... to be fair, they were throwing in things that even most tax accountants do not every see....


Do you know IF he actually had the return 'done' on the 13th Sometimes they just do a quick estimate and if they miss some limitation of a loss or something else that estimate could be way off.... also, they might not have looked at AMT.... and you could very well be paying a big amount of AMT... so your regular tax could be low, but throw in AMT and you get hit hard...
When I was way younger, "Money Magazine", did what you mentioned.
Gave to various, tax preparers, Big name firms, CPA's, Tax professionals,
etc. (many), the same tax situation. (ie. married couple, 2 kids, etc.).

Very interesting, the returns ranged from paying large taxes to getting back large refunds.
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Old 05-11-2015, 10:01 PM   #32
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I'm still waiting for them to finish reviewing the return, and explaining to me the reason for the large discrepancy between the earlier return and this one. When he asked on april 13th if I wanted to file or wait, I should have just taken it and went with it. I certainly never would have expected that more review would have raised my taxes.
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Old 05-12-2015, 07:21 AM   #33
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I'm still waiting for them to finish reviewing the return, and explaining to me the reason for the large discrepancy between the earlier return and this one. When he asked on april 13th if I wanted to file or wait, I should have just taken it and went with it. I certainly never would have expected that more review would have raised my taxes.
But if the new amount is correct and the IRS caught the mistake, you're better off knowing it now than paying a penalty later. My audit risk is very low, but I simply missed reporting a stock sale once and they caught it. That turned out to be nothing because it was a very small loss but they assumed a zero basis and a large gain until I corrected it.

If you aren't concerned with your taxes being accurate, you might as well be doing them yourself.
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Old 05-12-2015, 09:28 AM   #34
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But if the new amount is correct and the IRS caught the mistake, you're better off knowing it now than paying a penalty later.
Absolutely. The headache of an audit that goes back the last few years would be huge, given the complexity of the estate settlement, which took two years.

The question is still 'IF' the new return is accurate.
Bottom line though, the preparer should have contacted me personally when he first noticed the increase by a multiple of three. There's no excuse for that.
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