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Started By
Message
Should I find another CPA?
Posted on 5/5/15 at 7:40 am
Posted on 5/5/15 at 7:40 am
I opened a business in October which has been doing great. I met with two CPA's late 2014 to manage my taxes, and I went with the one I am with now because he promotes himself as a small business consultant and appeared more available.
I found his advice helpful for the first couple meetings because he gave me info that I simply could not get off an internet search or message board. I have met with approximately 3 times the last year for $150 a pop.
He charges $450 to prepare a tax return. However, I found that I did all the leg work--entering into spread sheets all my expenses from 2014 and organizing all my receipts. Do most CPA’s work like this?
I simply handed him a binder with all my expenses and receipts and he had the return done for me in approximately a week. He also set my estimated taxes I owe the next year.
Well, I just recently found out that I could have deducted the interest for my student loans and saved $900 in taxes. He said he could do an amendment for me for $165 if I want.
I have 2 problems with this. As my CPA, I feel like he should have a check-off list of everything that could possibly be deductible prior to filing my return. Although this is ultimately my responsibility, I can’t help but wonder what else he forgot to mention that may have been a deduction.
Also, if I have 3 years to make an amendment, why not wait until later in case we forgot anything else? It’s not like he I don’t have the option of doing the amendment myself or later, I just feel like I am being hustled.
Any input would be greatly appreciated. TIA
I found his advice helpful for the first couple meetings because he gave me info that I simply could not get off an internet search or message board. I have met with approximately 3 times the last year for $150 a pop.
He charges $450 to prepare a tax return. However, I found that I did all the leg work--entering into spread sheets all my expenses from 2014 and organizing all my receipts. Do most CPA’s work like this?
I simply handed him a binder with all my expenses and receipts and he had the return done for me in approximately a week. He also set my estimated taxes I owe the next year.
Well, I just recently found out that I could have deducted the interest for my student loans and saved $900 in taxes. He said he could do an amendment for me for $165 if I want.
I have 2 problems with this. As my CPA, I feel like he should have a check-off list of everything that could possibly be deductible prior to filing my return. Although this is ultimately my responsibility, I can’t help but wonder what else he forgot to mention that may have been a deduction.
Also, if I have 3 years to make an amendment, why not wait until later in case we forgot anything else? It’s not like he I don’t have the option of doing the amendment myself or later, I just feel like I am being hustled.
Any input would be greatly appreciated. TIA
9
Posted on 5/5/15 at 7:55 am to WarmBubble
(no message)
This post was edited on 6/11/15 at 8:50 am
Posted on 5/5/15 at 8:09 am to WarmBubble
First of all. The more leg work we do, the more we will charge you. Depending on your tax return and what all is comprised of it, $450 isn't bad.
Second, a $900 dollar savings on student loan interest is odd bc after a certain agi, depending on your filing status, you get phased out and the max you can deduct is $2500. It's possible though. I'd have to look at it.
Also, we send out an organizer that lets people fill out their info and it asks questions about certain things.
$165 for an amended return that he's already prepared and was paid for? If it's as simple as entering in one figure then we just amend it. Yea, that's be bush league. However, if we have to amend it and spend an hour entering in more expenses or deductions bc you forgot to give it to us, yes then we'd charge a fee.
Second, a $900 dollar savings on student loan interest is odd bc after a certain agi, depending on your filing status, you get phased out and the max you can deduct is $2500. It's possible though. I'd have to look at it.
Also, we send out an organizer that lets people fill out their info and it asks questions about certain things.
$165 for an amended return that he's already prepared and was paid for? If it's as simple as entering in one figure then we just amend it. Yea, that's be bush league. However, if we have to amend it and spend an hour entering in more expenses or deductions bc you forgot to give it to us, yes then we'd charge a fee.
Posted on 5/5/15 at 8:10 am to WarmBubble
Did you try telling him it was HIS job to tell you all the deductions since he saw your expenses?
Talk to him and tell him your issues. If he doesn't budge, take you business elsewhere and tell him why. You know, the same thing he would do to you if he were losing money doing business with you.
Talk to him and tell him your issues. If he doesn't budge, take you business elsewhere and tell him why. You know, the same thing he would do to you if he were losing money doing business with you.
Posted on 5/5/15 at 8:17 am to Ray Finkle
quote:
Second, a $900 dollar savings on student loan interest is odd bc after a certain agi, depending on your filing status, you get phased out and the max you can deduct is $2500. It's possible though. I'd have to look at it.
My student loan interest was approximatley $2500.
This is what he responsed with when I emailed him I noticed the 1098-E form:
quote:
Sorry. I didn't see the attachment. The difference is about $900 less in tax. The fee to prepare an amended return is $165. Do you want me to prepare the amended return? The 1040X cannot be filed electronically, so I can mail you the return to submit or you can pick it up at my office.
quote:
$165 for an amended return that he's already prepared and was paid for? If it's as simple as entering in one figure then we just amend it. Yea, that's be bush league. However, if we have to amend it and spend an hour entering in more expenses or deductions bc you forgot to give it to us, yes then we'd charge a fee.
It just appears to be one entry. I can do this myself, correct?
Posted on 5/5/15 at 9:40 am to WarmBubble
quote:
WarmBubble
If you reported student loan interest on your 2013 tax returns then he should have asked the question for 2014. If this is the case, he should prepare the amended returns at no cost.
If you didn't report any student loan interest in 2013 then I do not feel that he had any responsibility to ask you the question. He should then charge for the amendment.
We are not going to ask about every deduction - an analytical review is all we can do. I also use an organizer that the taxpayers (should) go through.
Posted on 5/5/15 at 10:19 am to krehn11
You should just do it yourself. It has to be paper filed anyway. The form is 1040x. It's 2 pages, you fill out everything the same as from your 1040 except for the one change, provide a 1 sentence explanation on page 2, and include the 1098e. 30 minutes and done.
CPA should do it for free if you gave him the 1098 in the first place. If not, $165 charge is fair.
CPA should do it for free if you gave him the 1098 in the first place. If not, $165 charge is fair.
Posted on 5/5/15 at 10:41 am to krehn11
quote:
If you reported student loan interest on your 2013 tax returns then he should have asked the question for 2014
This.
quote:
If you didn't report any student loan interest in 2013 then I do not feel that he had any responsibility to ask you the question
And this.
Plus by all accounts his fees are very reasonable. CPAs in public practice make money on their time. We aren't selling a product, so every 10-15 minutes means something to the bottom line, as crazy as that sounds. I find it hard to imagine why people get so aggravated paying a CPA an hourly fee but not a mechanic fixing their vehicle. This is just one of the reasons I'm getting out of public practice. People hate taxes and hate paying someone to prepare them.
Posted on 5/5/15 at 10:49 am to WarmBubble
If you provided the accountant with the Form 1098-E reporting the student loan interest, and the CPA neglected to include it on your tax return, then he should feel an obligation to correct his negligence. If he will not acknowledge his negligence and correct it for free, then you probably should seek another advisor.
Posted on 5/5/15 at 11:02 am to Jabstep
quote:
Jabstep
quote:
Plus by all accounts his fees are very reasonable. CPAs in public practice make money on their time. We aren't selling a product, so every 10-15 minutes means something to the bottom line, as crazy as that sounds. I find it hard to imagine why people get so aggravated paying a CPA an hourly fee but not a mechanic fixing their vehicle. This is just one of the reasons I'm getting out of public practice. People hate taxes and hate paying someone to prepare them.
Sounds like you're venting here. The OP was asking questions because he's simply inexperienced when it comes to dealing with these matters. When you review or re-read (if you so choose to) what he said, he went out of his way to point out that the CPA in question had given him excellent advice in regards to his business (he mentioned the cost per hour and was still pleased so it's not as if this guy is a skinflint from the info provided).
This guy is doing things the right way and he's not rushing to judgment.
Posted on 5/5/15 at 11:14 am to WarmBubble
Did you provide him with the 1098-E?
Posted on 5/5/15 at 11:18 am to GFunk
I was venting but I didn't mean to direct it at him, just a lot of people in general. I'm glad people like him come to this board for advice. The last thing he should do is run for the cheapest option because that type of person is more likely to do something far worse than failing to ask about student loan interest.
Posted on 5/5/15 at 1:36 pm to Poodlebrain
quote:
If you provided the accountant with the Form 1098-E reporting the student loan interest, and the CPA neglected to include it on your tax return, then he should feel an obligation to correct his negligence. If he will not acknowledge his negligence and correct it for free, then you probably should seek another advisor.
I filed my taxes from 2013 with Turbo Tax. I do beleive I reported my student loan interest then. I thought I had given him a copy of the final report, but I need to go back and check. And no, I did not give him the 1098-E form from 2014. It completely slipped my mind.
Prior to giving him a list of expesnes from 2014, he did provide me a grid with the categories for all my business expenses (This, I thought, was very helpful). Common deductions for a married acouple were never really discussed though. The business was the major theme for every session.
My wife and I figured there would be more deductions, however, in addition to the busines. We asked him clearly what other deductions could be made (Perhaps TurboTax had spoiled us in the previous years). We bought a house in 2014 and so he told us about real estate insurance interest. My wife was also in shcool so we included any expenses related to this (she did not take out a loan, however).
But looking back, he didn't ask us about student loan interest, nor did we think about it at the time.
So all-in-all, I guess both parties dropped the ball. It just seemed odd, espcailly after several meetings, that something as major as student loan interest (for either of us) was never discussed. I have yet to confront him about my issues, but I will express my concenrns about the making sure something like this doesn't happen again.
Thank you all for your responses.
Posted on 5/5/15 at 1:41 pm to WarmBubble
We quit using a CPA years ago when we realized he added little/no value to our return prep. We itemize, my better half is a sole practitioner, I have some 1099 income. In short, not rocket science for the decently educated and mathematically competent. Many annual summaries of tax law changes are out there, so unless you have a big change in status, open a new business & incorporate, etc, it's not radically different each year.
We found we did not need to pay someone $500 to fill out the form. (We track all of our expenses/deductions during the year, so at tax time, things are pretty straightforward.)
We found we did not need to pay someone $500 to fill out the form. (We track all of our expenses/deductions during the year, so at tax time, things are pretty straightforward.)
Posted on 5/5/15 at 1:58 pm to hungryone
That's a risk you are willing to take and it may work out for you, but most people in your situation can't accurately fill out their return. I've used this example before, it's a state issue, my uncle with a finance degree has been filing his own return for years. He had no clue what the Fairplan credit was, had not been deducting school expenses for his kids and several other items. He had easily cost himself 2k over several years.
Federal income tax expense is likely one of the top 2-3 cash outflows expenses each individual is incurring each year, why not pay a little to make sure it's correct? Just
my take.
Federal income tax expense is likely one of the top 2-3 cash outflows expenses each individual is incurring each year, why not pay a little to make sure it's correct? Just
my take.
Posted on 5/5/15 at 2:14 pm to Jabstep
Because of literally everything she posted.
Posted on 5/5/15 at 2:28 pm to Jabstep
quote:
I've used this example before, it's a state issue, my uncle with a finance degree has been filing his own return for years. He had no clue what the Fairplan credit was, had not been deducting school expenses for his kids and several other items. He had easily cost himself 2k over several years.
If he's not taking the time to keep current on tax law changes, then no, he shouldn't do his own returns. But it's an easy enough task for many professionals who are required to keep up with tax law changes anyway, or who do so as a matter of being informed citizens.
We did use TurboTax a few years ago, but it was also a ripoff (not free because of the various schedules we file). We still file a paper return, mainly because we always have to pay, so I don't care how slowly the IRS processes the damn check, LOL.
Posted on 5/5/15 at 6:53 pm to WarmBubble
It wasn't on your 2013 return and you didn't give him the 1098-E for 2014.
Not being an arse, but this is 90% on you. I would charge you as well for an amended return unless you were a large client that was already paying a lot for my services.
My advice is still to just fill out the 1040X yourself. It is a very simple 2 page form. There is only 1 change to make. Probably take 1 hour to do.
Here is a link to a printable form you can fill out yourself, print and drop in mail in about the amount of time you have probably spent in this thread.
LINK
Not being an arse, but this is 90% on you. I would charge you as well for an amended return unless you were a large client that was already paying a lot for my services.
My advice is still to just fill out the 1040X yourself. It is a very simple 2 page form. There is only 1 change to make. Probably take 1 hour to do.
Here is a link to a printable form you can fill out yourself, print and drop in mail in about the amount of time you have probably spent in this thread.
LINK
Posted on 5/5/15 at 7:21 pm to WarmBubble
quote:
He charges $450 to prepare a tax return. However, I found that I did all the leg work--entering into spread sheets all my expenses from 2014 and organizing all my receipts. Do most CPA’s work like this?
I don't know if most work like this, but if he's doing the leg work for you it will cost quite a bit more than $450 even for a personal return, let alone a business return.
quote:
I just recently found out that I could have deducted the interest for my student loans and saved $900 in taxes. He said he could do an amendment for me for $165 if I want.
If you gave him the loan info then he probably shouldn't charge you to do the amendment, but honestly you probably saved more than that in the upfront fee. If you didn't give him the loan info at first then he's perfectly entitled to charge for it. He can't possibly check for every possible deduction, there are 30 gazillion pages of tax code to go through.
I wouldn't worry about it all that much, we aren't talking about big dollars here anyway. If you want total white-glove turnkey service that will be many thousands of dollars.
Posted on 5/5/15 at 8:43 pm to WarmBubble
His tax prep fee is reasonable. The $150 a pop for each meeting could be considered a bit excessive depending on the amount of time and/or work performed.
$165 for a 1 entry amendment is a little high, but not excessive.
$165 for a 1 entry amendment is a little high, but not excessive.
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