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Old 05-18-2014, 08:37 AM   #21
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If your "barely itemizing" you could try to bunch your itemized deductions every other year and take the standard deduction in the odd year. Move charitable giving to be generous every other year and tight in odd years----give in advance in December one year and push off into January for the year not itemizing. You can do the same thing with state taxes if your doing estimated payments.
+1.This is a standard tactic that might help a little if you have some flexibility.
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Old 05-18-2014, 09:05 AM   #22
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I used a tax preparer/advisor about 20 years ago. He set up his own business and was a friend of my family. He'd do our taxes (for a fee) and also would talk with me about tax strategies for lowering my taxes for free during the year. But most of his "strategies" were things like buy a house, buy property and rent it out, invest in municipal bonds - things I already knew.

A related question. What is the difference between a "tax preparer" and a "CPA"? I know a CPA is certified and probably has more training, etc. My experience with CPAs is they seem to be willing to do your taxes but seem to shy away from giving "advice" but maybe that is just my impression. And don't CPAs have to deal with things other than taxes, like doing bookwork for businesses? Do some CPAs "specialize" in tax planning? I've always looked at CPAs similar to doctors. You can ask a urologist about your chest pain and would get advice but if you really want better advice you'd go to a cardiologist.
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Old 05-18-2014, 09:14 AM   #23
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As I recall there are "unlicensed" preparers, enrolled agents (EAs) and CPAs (certified public accountants). Anyone can hang out a shingle and hold themselves to be a tax preparer. IIRC EAs have passed an IRS test and other criteria and may even have CPE requirements (I'm not sure on the CPE requirements).

CPAs typically have a bachelors or masters degree, pass a national exam, and have 2 or more years of experience working under another CPA. However, only a small subset of CPAs specialize in taxes (most are auditing or corporate accounting and financial reporting) but most CPAs who hold themselves out as tax preparers specialize in taxes.
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Old 05-19-2014, 10:46 AM   #24
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We use a CA(CPA) and are very pleased with the service and the outcome. She does our returns and she gives us guidance on tax planning. In one instance she brought in a tax specialist for one hour review.

We engaged her in 2006. Apart from dealing with her going forward, I wanted her to review our past tax returns. I had prepared them myself and had some concerns. We were doing some retirement planning and the last thing that we wanted was a knock on the door from our IRS. We had good records. Bottom line was the she refiled back to 1999 for me and several years for my wife.

We had a net gain of $8500 on those refiles, confidence that our returns were complete and accurate, and a tax plan going forward. Our incremental tax rate is 39 percent. We can write off the accounting fees.

We have absolutely no issue with paying for good professional advice/service.
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Old 05-19-2014, 01:06 PM   #25
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If I made $165K/yr, and had a life, no way would I self-prepare in preference to paying a known and satisfactory CPA $340 per year. It actually adds up to peanuts.

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Old 05-21-2014, 09:28 PM   #26
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Often there is a tax preparer (not a CPA) doing the actual work in the CPA's back office ;-)
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Old 05-22-2014, 02:39 AM   #27
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^ The last time I used a CPA firm (associate CPA is a farmer friend of 30 years), for son's Canadian income in college (fellowship, scholarship, teaching, stipend) they used a Canadian firm for the Canadian portion and the US portion was sent to India but was delayed because the Indian people quit inmass to work for another outfit and a new outsourced firm had to be found and vetted.
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Old 05-22-2014, 02:48 AM   #28
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What tax program are you talking about?
Doesn't matter. The questions they ask are all the same. The look and feel are different between programs. I've tried just about all of them but settled on the cheapest, the group that sold out to Intuit, and the one I started in DOS, dot matrix, green monitor.
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Old 05-22-2014, 07:50 AM   #29
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If your "barely itemizing" you could try to bunch your itemized deductions every other year and take the standard deduction in the odd year. Move charitable giving to be generous every other year and tight in odd years----give in advance in December one year and push off into January for the year not itemizing. You can do the same thing with state taxes if your doing estimated payments.
+1

I bunch deductions and plan on itemizing every other year. I pay two years of property taxes in the itemizing year (the big tax in Texas) and make any charitable contributions then. I have a small charitable trust at Fidelity Charitable Trust. They will let you start with (I think) a $5,000 contribution. Gifts to qualified charities (they need an IRS charity number) can be made as low as $50. I use this for almost all of my charitable giving. I put a few years of donations in when the year is right. The donation date is when it is deductible and not when sent to your intended charities.

I think you need to learn to do your own taxes. The federal and state programs may cost you $60 or $70 every year but you will get a better feel of your situation. If you have enough in Vanguard, you can get it for free. the amount you are currently paying is a bargain but you probably spend as much time filling out the paperwork as it would take to do it yourself. If your life is as simple as you say, the CPA isn't going to find you special deductions.
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Old 05-22-2014, 07:57 AM   #30
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^ The last time I used a CPA firm (associate CPA is a farmer friend of 30 years), for son's Canadian income in college (fellowship, scholarship, teaching, stipend) they used a Canadian firm for the Canadian portion and the US portion was sent to India but was delayed because the Indian people quit inmass to work for another outfit and a new outsourced firm had to be found and vetted.
Having your tax info sent to India is scary. If that can't get your identity stolen, I don't know what else to try. Your info would have to be accessible by a countless number of people.
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Old 05-22-2014, 09:11 AM   #31
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Often there is a tax preparer (not a CPA) doing the actual work in the CPA's back office ;-)
Count on this the majority of the time. His/her time is too valuable to be doing data entry work. For the last eight years, I spend three months as the back office tax preparer (a great retirement job). Most folks don't submit their tax info in an organized way, even though they are given a booklet to fill out, so I spend my day sorting, data entry, flagging missing data, assumptions made, etc.

Of course, the returns are fully reviewed by the CPAs before they are willing to put their signature on the return.

Do 100-150 returns each year. And still have not done my own personal return!!
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Old 05-22-2014, 11:07 AM   #32
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I use independent CPA who in their younger years was with the IRS. When we first went to him he audited several prior years and found a couple grand we could amend and get back. That paid for several years of his fee of $350. Every year I calculate the taxes and he would do his work and all but one year the prepared return tax bill was lower than may calculation by more than his fee. Starting in 2012 the year I fired we meet in the fall to discuss strategy to reduce lifetime tax best way to take income from our investments and maximize ACA subsidy and no additional charge.
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Old 05-22-2014, 01:31 PM   #33
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OK, I am a CPA and I prepare individual returns. Our firm prepares about 1200 returns a year.

There are two types of people that use our services. The first is the type that have a somewhat complicated return. Maybe have a lot of investment activity(sales, etc), maybe a rental property or stock options. I have seen a lot of people mess up their returns by failing to properly prepare report any out of the ordinary type of transaction. Penalties for forgetting the Alt Min Tax or even assuming the IRS is correct if they send you a notice can cost more than our fee.

The other type is the type that wants convenience. Typically they have Schedule A & B and little else. They come to us for the convenience. We have a minimum fee of $300. We don't discourage the "Convenience" client, but they do pay for that convenience.

The tax programs like TurboTax or TaxAct have gotten better over the years. They used to be horrible. But in order to make them easier to use, they have caused them to be very time consuming. You have to go through multiple question and answer interviews.

We tell our "Convenience" clients that it is OK if they want to prepare their own returns. We suggest they come back every second or third year for us to do their return at which time we will review their prior returns as well.

As for advice, you are more likely to get advice from a CPA or CA than you are a basic Tax Preparer. Just don't expect that you are going to pay $100 for Tax Prep and also get free advice.
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Old 05-22-2014, 01:48 PM   #34
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Jimbo125 sounds to me like a professional who provides a service that meets a client's needs.
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Old 05-22-2014, 02:48 PM   #35
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Having your tax info sent to India is scary. If that can't get your identity stolen, I don't know what else to try. Your info would have to be accessible by a countless number of people.
This is not unique, I know of many major businesses that out source this type of work to India or other 3rd world countries. Your medical records, financial data, etc. much of the work handled 'over there'. These are US or Canadian companies, so I'm sure their audits cover all the same privacy policies we know.
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Old 05-22-2014, 05:31 PM   #36
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Often there is a tax preparer (not a CPA) doing the actual work in the CPA's back office ;-)
Perhaps, but the return is reviewed by the CPA and the CPA signs the return as the preparer and takes responsibility for the return.
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Old 05-22-2014, 05:34 PM   #37
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Jimbo125 sounds to me like a professional who provides a service that meets a client's needs.
+1
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