.
Information Release
For Release: Immediate Release
Date: March 3, 2010
Subject: Tax / Consumer Interest
Media Contact: Professional’s name: Franklin Katz, ATP, PA, PB
Professional’s business name: Frank’s Tax & Business Service
Business address/location: 120 York Road,
Kings Mountain, NC 28086-3151
Professional’s phone: (704) 739-4039
Professional’s e-mail: [email protected]
National Contact: Nancy Kuenster, 800.558.3402, ext. 1172; [email protected].
Self Tax-Preparation Can Be Costly
By Delmar C. Gillette, Economic Planning Services Inc., Newport News, VA
National Association of Tax Professionals (NATP) Appleton, WI – Two different taxpayers; two similar results…just how much does professional tax preparation differ from what you can do yourself? Can a professional really save you enough tax liability to be worth the cost? Let’s see.
Ms. G, after using software to complete her income taxes, felt sick to learn that in addition to the $31,000 she had already paid in estimated taxes, she owed an additional $12,000. At the urging of a friend, she visited the friend’s tax professional. That advice saved Ms. G $14,000! How?
Ms. G had sold a rental house with a large capital gain. After examining the return and asking several questions, the tax professional uncovered several software errors. The tax software had:
• Doubled her W-2 income;
• Not properly allocated the basis, selling expenses, or the sales price to the land and the building;
• Had not asked understandable questions about the settlement statement on the sale of the real estate; and
• Did not properly place the sale of the land and building on Form 4797.
• Missed several itemized deductions by not asking the right questions;
• Didn’t probe enough to properly calculate basis and depreciation of a recent acquisition that was to be rental property;
• Incorrectly calculated the alternative minimum tax (AMT);
By reworking the return, correcting the errors, and using Schedule A instead of using a standard deduction, the tax pro was able to remove the AMT tax (a $7,000 savings) and reduce the regular income tax. Rather than writing a check to the IRS for $12,000, Ms. G received a refund from the IRS of $2,000 – a savings of $14,000.
A second taxpayer, Mr. B, saw a tax professional on the advice of his brother. He had sold a limited partnership interest and needed assistance reporting the sale (and its explanation) on the tax return. Mr. B had completed his income tax return by hand using manual calculations. He and his wife had sold their personal residence and many belongings to move to a continuing care retirement community. He was unaware that the retirement community’s entrance fee, as well as the monthly fee, had a “medical expense” component in it – of over $65,000!
Believing that he did not have enough in deductions to qualify, Mr. B had not prepared a Schedule A to itemize even though he had enough deductions with just the medical expense! He could also claim real estate taxes, charitable contributions, the balance of the medical expenses (prescriptions, doctors, etc.), expense from a settlement statement, and dividends that were previously identified incorrectly (qualified/nonqualified). By using records from several years, the tax professional was able to reduce the capital gain on the sale of the taxpayers land. You can imagine that Mr. B was smiling when, instead of paying the IRS just under $1,000, he was getting a refund of nearly $7,000 – a savings of almost $8,000.
Here is what Ms. G and Mr. B had in common:
• Both felt competent to prepare their own tax returns, yet given the complexity of tax return preparation, both lacked knowledge beyond salaries, retirement income, dividends, and interest.
• Ms. G was confused as to how to input data for the sale of her rental property and how to use Schedule A deductions instead of the defaulting standard deduction. Without being asked probing questions such as those a tax professional would ask, she missed out.
• Mr. B was unaware that part of the retirement community’s fee was partially for lifetime medical support. Without the knowledge of a tax professional, he missed many additional eligible tax deductions.
There is no equal to having the assistance of a trained professional who asks probing questions and applies specialized knowledge to achieve the maximum refund or minimum balance due on behalf of his or her clients. To find a professional tax preparer, look to a member of NATP. NATP members are professionals who subscribe to a stringent code of ethics and standards of professional conduct (read them in the Press Room at National Association of Tax Professionals). NATP maintains a listing of professionals in your area at Home.
For a FREE brochure on how to find a tax preparer, visit the NATP Press Room at National Association of Tax Professionals and download or request a copy of NATP’s “Finding the Right Tax Preparer” brochure.
Members of the National Association of Tax Professionals (NATP) work at offices that assist over 11 million taxpayers with tax preparation and planning. The average NATP member has been in the tax business for over 20 years and holds a tax/financial designation and/or a college degree. NATP has nearly 18,000 members nationwide. Members include individual tax preparers, enrolled agents, certified public accountants, accountants, attorneys, and financial planners. Learn more at National Association of Tax Professionals.
NATP is a nonprofit professional association founded in 1979 to serve professionals working in all areas of tax practice through professional education, tax research, and products. The national headquarters, located in Appleton, WI, employs over 40 staff members.
The Biggest quesiton is has the tax software that you purchased or completed on line ask the correct question, and did you as the taxpayer able to deseifer the tax law before completing you tax return properly.
If you feel that you did everything correct, and you get audited there is no one that you can turn to to help you due to the fact that if you had a professional prepare your return, he can help you to straighten out the tax problem. Now your on your own. And it could cost you a lot more in Taxes, plus Interest and penalities.
So if you feel that you are saving Preparation fees in the long run, figure out what that software cost you. If you use Turbo Tax Business, over the counter Price is around $100.00, and you have to do it yourself, plus there are deductions that it does not allow.
If you use a Tax Professional who knows the trucking industry, you should have no problems, but again, the IRS is auditing a great number of Sch C Filers, Sole propreitors starting this year. mininum is 10,000 taxpayers. nationwide
Franklin Katz, ATP ,PA, PB
Frank’s Tax and Business Service
120 York Rd
Kings Mountain, NC 28086-3151
(704) 739-4039
Fax: (704) 739-3934
Providing Professional Accounting Services and Income Tax Preparation
Circular 230 Disclaimer – Any tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or tax-related matters addressed herein.
Information Release
For Release: Immediate Release
Date: March 3, 2010
Subject: Tax / Consumer Interest
Media Contact: Professional’s name: Franklin Katz, ATP, PA, PB
Professional’s business name: Frank’s Tax & Business Service
Business address/location: 120 York Road,
Kings Mountain, NC 28086-3151
Professional’s phone: (704) 739-4039
Professional’s e-mail: [email protected]
National Contact: Nancy Kuenster, 800.558.3402, ext. 1172; [email protected].
Self Tax-Preparation Can Be Costly
By Delmar C. Gillette, Economic Planning Services Inc., Newport News, VA
National Association of Tax Professionals (NATP) Appleton, WI – Two different taxpayers; two similar results…just how much does professional tax preparation differ from what you can do yourself? Can a professional really save you enough tax liability to be worth the cost? Let’s see.
Ms. G, after using software to complete her income taxes, felt sick to learn that in addition to the $31,000 she had already paid in estimated taxes, she owed an additional $12,000. At the urging of a friend, she visited the friend’s tax professional. That advice saved Ms. G $14,000! How?
Ms. G had sold a rental house with a large capital gain. After examining the return and asking several questions, the tax professional uncovered several software errors. The tax software had:
• Doubled her W-2 income;
• Not properly allocated the basis, selling expenses, or the sales price to the land and the building;
• Had not asked understandable questions about the settlement statement on the sale of the real estate; and
• Did not properly place the sale of the land and building on Form 4797.
• Missed several itemized deductions by not asking the right questions;
• Didn’t probe enough to properly calculate basis and depreciation of a recent acquisition that was to be rental property;
• Incorrectly calculated the alternative minimum tax (AMT);
By reworking the return, correcting the errors, and using Schedule A instead of using a standard deduction, the tax pro was able to remove the AMT tax (a $7,000 savings) and reduce the regular income tax. Rather than writing a check to the IRS for $12,000, Ms. G received a refund from the IRS of $2,000 – a savings of $14,000.
A second taxpayer, Mr. B, saw a tax professional on the advice of his brother. He had sold a limited partnership interest and needed assistance reporting the sale (and its explanation) on the tax return. Mr. B had completed his income tax return by hand using manual calculations. He and his wife had sold their personal residence and many belongings to move to a continuing care retirement community. He was unaware that the retirement community’s entrance fee, as well as the monthly fee, had a “medical expense” component in it – of over $65,000!
Believing that he did not have enough in deductions to qualify, Mr. B had not prepared a Schedule A to itemize even though he had enough deductions with just the medical expense! He could also claim real estate taxes, charitable contributions, the balance of the medical expenses (prescriptions, doctors, etc.), expense from a settlement statement, and dividends that were previously identified incorrectly (qualified/nonqualified). By using records from several years, the tax professional was able to reduce the capital gain on the sale of the taxpayers land. You can imagine that Mr. B was smiling when, instead of paying the IRS just under $1,000, he was getting a refund of nearly $7,000 – a savings of almost $8,000.
Here is what Ms. G and Mr. B had in common:
• Both felt competent to prepare their own tax returns, yet given the complexity of tax return preparation, both lacked knowledge beyond salaries, retirement income, dividends, and interest.
• Ms. G was confused as to how to input data for the sale of her rental property and how to use Schedule A deductions instead of the defaulting standard deduction. Without being asked probing questions such as those a tax professional would ask, she missed out.
• Mr. B was unaware that part of the retirement community’s fee was partially for lifetime medical support. Without the knowledge of a tax professional, he missed many additional eligible tax deductions.
There is no equal to having the assistance of a trained professional who asks probing questions and applies specialized knowledge to achieve the maximum refund or minimum balance due on behalf of his or her clients. To find a professional tax preparer, look to a member of NATP. NATP members are professionals who subscribe to a stringent code of ethics and standards of professional conduct (read them in the Press Room at National Association of Tax Professionals). NATP maintains a listing of professionals in your area at Home.
For a FREE brochure on how to find a tax preparer, visit the NATP Press Room at National Association of Tax Professionals and download or request a copy of NATP’s “Finding the Right Tax Preparer” brochure.
Members of the National Association of Tax Professionals (NATP) work at offices that assist over 11 million taxpayers with tax preparation and planning. The average NATP member has been in the tax business for over 20 years and holds a tax/financial designation and/or a college degree. NATP has nearly 18,000 members nationwide. Members include individual tax preparers, enrolled agents, certified public accountants, accountants, attorneys, and financial planners. Learn more at National Association of Tax Professionals.
NATP is a nonprofit professional association founded in 1979 to serve professionals working in all areas of tax practice through professional education, tax research, and products. The national headquarters, located in Appleton, WI, employs over 40 staff members.
The Biggest quesiton is has the tax software that you purchased or completed on line ask the correct question, and did you as the taxpayer able to deseifer the tax law before completing you tax return properly.
If you feel that you did everything correct, and you get audited there is no one that you can turn to to help you due to the fact that if you had a professional prepare your return, he can help you to straighten out the tax problem. Now your on your own. And it could cost you a lot more in Taxes, plus Interest and penalities.
So if you feel that you are saving Preparation fees in the long run, figure out what that software cost you. If you use Turbo Tax Business, over the counter Price is around $100.00, and you have to do it yourself, plus there are deductions that it does not allow.
If you use a Tax Professional who knows the trucking industry, you should have no problems, but again, the IRS is auditing a great number of Sch C Filers, Sole propreitors starting this year. mininum is 10,000 taxpayers. nationwide
Franklin Katz, ATP ,PA, PB
Frank’s Tax and Business Service
120 York Rd
Kings Mountain, NC 28086-3151
(704) 739-4039
Fax: (704) 739-3934
Providing Professional Accounting Services and Income Tax Preparation
Circular 230 Disclaimer – Any tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or tax-related matters addressed herein.