Tax Prep Questions

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wasilvers

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I'm a CPA and looking at the health of my business. We do audit, review, compilation, business and personal taxes. I see all the business side of things doing well, audits are flying in, we get new business clients all the time. BUT what we don't get is the young to mid-age guys coming in as new 1040 clients. The only new personal returns we get are the elderly switching accountants or the guys about to go to jail, under audit, or have screwed up their last 2 years returns beyond recognition.

I'm wondering what is happening to this demographic? So I ask you guys - who prepares your taxes for you? (I'd assume on a do-it-yourself website like this, most probably prepare their own.) If you choose a 'professional' (I use that loosly for the H&R or Jackson Heweitt users) - why do you choose them?

Thanks for you insights!

Just to add a plug in here - In most cases your local CPA charges less, is more accurate, and fixes H&R returns too :wink:
 
I think most young guys don't see the advantage of using a CPA when they can do their taxes themselves for free. They need to be shown the advantage, which is usually getting more of their money back into their pockets.

After I bought my house I did a test, TurboTax vs CPA. CPA got me an additional $500 TT would have never found so I was converted.

My wife used to use H&R Suck before we were married and they totally hosed her. I will never let any relative or friend go there.

I use a CPA for two main reasons. First, they know the tax code and the changes that happen every year. They understand that tax law is NOT black and white and there is a fair amount of your money hiding in the gray. I don't think H&R or JH knows that the gray exists, plus the people they use are not true tax professionals. They just bring those people in at tax time and then they go back to their regular life/jobs when it's over. That's not the kind of person I can put my full financial faith in.
The second reason I use a CPA is because if I ever happen to get audited, I want to have a person who is knowledgeable about tax law fighting the IRS for me. There's no sense going into a gun fight with a knife when I can just hide behind the sniper.

And yes, my CPA charges less than H&R.
 
Father-in-law is a retired high end CPA, sister-in-law is also a high level corporate CPA.

I used to do the whole TT thing, but decided once I started getting investments etc that I needed another set of experienced eyes on everything to keep it square. I'll admit that I was a little concerned about my FIL knowing about my financials, but at least this way he knows his daughter and grand kids are in great shape. ( I hope! :-k )
 
I use a local tax preparer. He's not a CPA, but in the 5 years I've been using him, he's found things the CPA I used before him never saw.

The degree doesn't matter as much as the person's knowledge and how well they keep on top of tax code changes. I made more money last year than in any of the previous 5 years (pulling investments to pay for my son's college) and this guy got me almost $900 back because he timed the withdrawls with investment and other deductions to zero out and it worked out better than he planned because of the lousy economy. In "normal years" for me he's been able to work with me to zero out my return every year I've been with him. A good tax guy is worth his weight in gold. Literally !!!
 
I've used only three preparers in my lifetime, and I'm retired!

The first was an H&R guy I used for many years. He was very good and guided me through three property purchases then he passed away.

The second preparer was another H&R guy who was a corporate controller who moon lighted at H&R. I used him for many years also until their rates went up sky high!

I now use a retired corporate controller who my GF's family uses. He's just as good as the previous two guys and charges a ridiculously low rate!
 
Well most guys in their mid 20s like me arnt married and don't own homes. I've always done my own except a few times when I had 5-10k in tool expenses to deduct, I went to a local place and was really disappointed.

Not to get off topic but in the next year or so I will be married and a new home owner. What is the difference in a cpa and say h&r block? I had been curious about this but had never had anybody to ask. An e z form is enough to piss me off, I wouldn't dare try to do my own with all the new changes I will have.
 
from what I've seen, a lot of the younger group go to H&R block. why, I don't know, but they sure aren't getting any favors done by them.
I was there when a friend of mine got a phone call; he was a tax preparer. the guy wanted to know if he did quick return on the amount that he was getting back. he said that it would be there in 3 days, but that wasn't fast enough-he needed the money NOW!
Doesn't H&R block write checks on the spot, and withold a percentage of your return?
I personally have never gone to a CPA. Figured till they got done with all the investment forms, including limited partnerships, I'd be paying through the - - - ! not to mention the IRA rollover, that I spread over 2 yrs.
the good news is I'M NOT IN JAIL; YET!! :lol:
 
Loggerhead Mike said:
What is the difference in a cpa and say h&r block? I had been curious about this but had never had anybody to ask.

I can only speak in generalizations and my personal experience - there are always exceptions.
Many of the 'retail' tax prep places such as H&R Block hire normal people to work for them. If you look, you will see some job ads in December saying "Learn how to do taxes - no experience necessary" - this is the class they teach people how to use H&R's software, then they hire out of the class. So a few weeks training on software makes them an expert.... Meanwhile a CPA has gone to school for 4 - 5 years (current regs) and passed a comprensive 4 part test (usually 2 solid days of testing) on detailed aspects of tax and accounting issues. They will have had to work in the industry for 1-3 years under direct supervision of another CPA before they can be licensed as a CPA. Also they must have a minimum of 40 hours of continuing education a year in their profession. I know for my firm we spend 2 days of training on individual taxes, 2 days on business taxes, and about a week on individual/business law changes throughout the year. Plus the reading we are required to do 'off the clock' to keep up on changes We also do lots of training in audit, but that doesnt apply here.
Then there is everything in between these two levels - generally referred to as tax preparers. Used to be, anyone could call themselves a paid tax preparer and file returns. Now the IRS is making them take a test (some basic math and basic return skills).

I may be biased as a CPA, but I put a lot of work, long nights, lost family time etc behind getting those letters behind my name. When I see a return prepared by H&R or one of the other retail tax preparers - I automatically assume I am going to have to amend it. A few years ago, 90% of the ones I got had to be amended. Now that is down to around 60% - but that still means more than half were done incorrectly. And the rates they charge - it shames me to see people charged that much. At my highest billing rate - the 'I hate you, leave my office" rate, I can't even come close to what they are charging. Usually I come in at $200 for what H&R charged $400 for - and that is with new client setup time included -which we normally write off. I'll let you know this, many accountant's like H&R clients to come to them - it usually means 1-2 amended returns in addition to a tax return... more $ in our pockets.

At my last public firm, we repeatedly got H&R referrals to our office. It was all the 'hard' returns that they didn't know how to do. To their credit, this office referred them on to someone else - so that's one good thing for them. As I said to start, there are some exceptions to this, but this has been my experience.
 
LOL, a coworker just reminded me of something we did. 2 years ago, we went to one of the careers websites of one of these companies. They had a test to take for people who thought they knew taxes and could work for them. We both took it and the next day got called by a regional guy. We had scored so highly, they wanted us to manage our own offices in different towns -and they kept after us for a while. Ahhh, we both had a good chuckle at that.
 
I feel your pain. I have been a licensed contractor for the last 40yrs. nuff said.......River
 
wasilvers said:
Loggerhead Mike said:
What is the difference in a cpa and say h&r block? I had been curious about this but had never had anybody to ask.

I can only speak in generalizations and my personal experience - there are always exceptions.
Many of the 'retail' tax prep places such as H&R Block hire normal people to work for them. If you look, you will see some job ads in December saying "Learn how to do taxes - no experience necessary" - this is the class they teach people how to use H&R's software, then they hire out of the class. So a few weeks training on software makes them an expert.... Meanwhile a CPA has gone to school for 4 - 5 years (current regs) and passed a comprensive 4 part test (usually 2 solid days of testing) on detailed aspects of tax and accounting issues. They will have had to work in the industry for 1-3 years under direct supervision of another CPA before they can be licensed as a CPA. Also they must have a minimum of 40 hours of continuing education a year in their profession. I know for my firm we spend 2 days of training on individual taxes, 2 days on business taxes, and about a week on individual/business law changes throughout the year. Plus the reading we are required to do 'off the clock' to keep up on changes We also do lots of training in audit, but that doesnt apply here.
Then there is everything in between these two levels - generally referred to as tax preparers. Used to be, anyone could call themselves a paid tax preparer and file returns. Now the IRS is making them take a test (some basic math and basic return skills).

I may be biased as a CPA, but I put a lot of work, long nights, lost family time etc behind getting those letters behind my name. When I see a return prepared by H&R or one of the other retail tax preparers - I automatically assume I am going to have to amend it. A few years ago, 90% of the ones I got had to be amended. Now that is down to around 60% - but that still means more than half were done incorrectly. And the rates they charge - it shames me to see people charged that much. At my highest billing rate - the 'I hate you, leave my office" rate, I can't even come close to what they are charging. Usually I come in at $200 for what H&R charged $400 for - and that is with new client setup time included -which we normally write off. I'll let you know this, many accountant's like H&R clients to come to them - it usually means 1-2 amended returns in addition to a tax return... more $ in our pockets.

At my last public firm, we repeatedly got H&R referrals to our office. It was all the 'hard' returns that they didn't know how to do. To their credit, this office referred them on to someone else - so that's one good thing for them. As I said to start, there are some exceptions to this, but this has been my experience.
A previous financial advisor of mine suggested that, because of my extensive knowledge of financial matters (self taught investor :roll: ), I should take the Block course and then start advertising myself as an independent preparer and specialize in the elderly. Said I might even get some offers to manage some older folks day to day financial affairs from their kids. I considered the liability, weighed what I knew about finance against what there was to know, skipped the course and changed financial advisors. #-o
 
Turbo Tax guys, be sure you include all your income/ deductions. Just a minute ago I just finished up a return for a teacher. I had to ammend 2010 and get her back over $300. If this was my return, I'd be upset. I mean, I would have liked that money for more fishing gear back in April last year rather than almost being July (over a year) and just now getting it. :lol:
 
wasilvers said:
Turbo Tax guys, be sure you include all your income/ deductions. Just a minute ago I just finished up a return for a teacher. I had to ammend 2010 and get her back over $300. If this was my return, I'd be upset. I mean, I would have liked that money for more fishing gear back in April last year rather than almost being July (over a year) and just now getting it. :lol:

I honestly spend the most time on my taxes deducting everything I can. (legitimately)
 
fender66 said:
I honestly spend the most time on my taxes deducting everything I can. (legitimately)

There's not much to deduct anymore. My tax guy is telling me to pay off my mortgage as there isn't much to deduct anymore. I still have enough deductions to do a long form so I'm taking every last bit that I can, while I can!
 

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