Still No Tax Law – 12/5/17
It is already December and the biggest tax changes since 1986 are on the table. The House and Senate bills have big differences still, making it difficult to plan before the year-end.
Some suggestions are logical despite the uncertainty. We know there will be changes. Some deductions will disappear or change in 2018. Tax brackets are changing. Standard deductions are increasing and personal exemptions could be eliminated.
- Since state and local income tax deductions may go away, if you make estimated payments and itemize deductions, make all your state and local 4th quarter payments before Dec.31st for a larger 2017 deduction.
- Another itemized deduction item, mortgage payments due in January can be paid in December and increase deduction.
- Homeowners can also pay real estate taxes in December instead of January.
- If you plan to make some charitable contributions in 2018, you might want to make them in 2017 in case you don’t itemize in 2018.
- In addition to deduction planning, delaying income can be beneficial to self-employed individuals. Sending year end invoices in January will move your income into 2018.
These are general suggestions that will help some taxpayers and not others. Hopefully by the time your 2017 taxes are done we will understand how the changes will affect your 2018 tax filing.
How does a tax firm provide a quality product? Here are a few of my answers.
Acquiring good information. The more information supported by documentation the more accurate and “audit proof” the return can be. The preparer may need to ask questions to confirm history and source of documents or request more documents to clarify the client’s verbal or written statements.
Research and discussion. A firm that encourages preparers to discuss particular tax situation with each other or supervisors and to research unusual items or treatments, will have a more knowledgeable staff. Annual training is an important part of this process.
Review. Even the most experienced and accurate preparers make errors. Whether a typing error or misunderstanding of information or law, a second set of eyes, is always important. Even a sole practitioner can improve accuracy by reviewing their own work a day or two later.
Providing the client with what they need. A quality product includes not only a neatly assembled client copy of the tax return but also other information and instruction necessary to help the client file the returns. Worksheets may be added on an as needed basis depending on the interest of the client. Instructions should be clear and usually include envelopes correctly addressed. Information on how to better prepare for the next tax year can be helpful.
Confidentiality. Tax return preparers, whether a CPA, EA or other preparer, are required by the I.R.S. to maintain a clients confidentiality. The office staff should not be heard discussing other clients by name or description. Everyone’s social security number must be protected. A client’s tax documents should be securely stored and conveyed.
Observing laws. In this electronic age, more and more rules are necessary to prevent fraud and theft. Your tax preparation firm should be following the laws for your benefit and theirs. While preparers are now required to offer efiling, this process has many rules to be followed. A preparer should never ask you to sign a blank form or offer to file your return without getting your signature first. Even though inconvenient, it helps to protect you as a taxpayer. Dishonesty in one area of work can carryover to other acts.
As I said, everyone makes mistakes. At Brown Tax Accounting, this year we are concentrating on minimizing the errors. Sometimes this takes longer that you might like or it may cost more than someone else charges, but we hope to have more satisfied clients in the long run.
Julie K. Brown CPA, EA January 13, 2012
|IRS TAX TIP 2012-06, January 10, 2012
Many people look for help from professionals when it’s time to file their tax return. If you use a paid tax preparer to file your return this year, the IRS urges you to choose that preparer wisely. Even if a return is prepared by someone else, the taxpayer is legally responsible for what’s on it. So, it’s very important to choose your tax preparer carefully.This year, the IRS wants to remind taxpayers to use a preparer who will sign the returns they prepare and enter their required Preparer Tax Identification Number (PTIN).
Here are ten tips to keep in mind when choosing a tax return preparer:
Report abusive tax preparers to the IRS. You can report abusive tax preparers and suspected tax fraud to the IRS on Form 14157, Complaint: Tax Return Preparer. Download Form 14157 from www.irs.gov or order by mail at 800-TAX-FORM (800-829-3676).