Author Topic: Question about tax preparers  (Read 2379 times)

Mighty-Dollar

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Question about tax preparers
« on: November 17, 2016, 05:50:01 PM »
Do tax preparers often use TurboTax?

I am looking to hire a tax preparer who will simply enter all of the numbers related to the rental of my home in 2016 into TurboTax and nothing else. Then I was going to take it from there.

How much might someone charge to do this?

Would you trust HR Block to do this? I've heard that HR Block has a lot of incompetent people working there.

seattlecyclone

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Re: Question about tax preparers
« Reply #1 on: November 17, 2016, 08:34:40 PM »
Why would you hire someone to use TurboTax? It's designed to be as user-friendly as possible given the tax code; I wouldn't trust someone else to operate the software better than myself.

Kakashi

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Re: Question about tax preparers
« Reply #2 on: November 18, 2016, 03:02:29 AM »
Agree, why in the world would you hire someone to essentially data-entry for you?

Unless you're saying you don't know much about rentals and taxes and want to make sure it's done right, and then you do the rest of your taxes yourself.

Not sure if any one offers the service isolated like that.

HR Block is the bottom of the barrel in terms of tax preparation.  It's for the masses, who have a simple tax return with W2 income only and standard deductions. 

CareCPA

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Re: Question about tax preparers
« Reply #3 on: November 18, 2016, 09:22:30 AM »
What's your end goal? If it's simply data entry, I don't think you'll save much time anyway since you'll have to check for accuracy. If it's to get someone knowledgeable to do the rental portion of the taxes, then you may as well just pay for tax prep since that's probably one of the more complicated parts of your return.

If H&R Block charges by the form like other chains, then it may actually be cheaper to go to an independent accountant.

Cpa Cat

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Re: Question about tax preparers
« Reply #4 on: November 18, 2016, 09:56:22 AM »
#1 TurboTax is enough to drive any professional preparer insane. What takes me 15 minutes on a professional tax software would take me an hour on TT.

#2 A paid tax preparer is required by the IRS to sign the tax return. TT offers no function for this. In other words, no - a reputable tax preparer would not agree to use TurboTax, because it breaks the rules.

#3 My time doing support for TurboTax has taught me that there are some tax preparers who use TT to prepare returns. Not sure I'd want to hire any of them... but you could find one.

My experience with TurboTax indicates that most self-preparing landlords are making mistakes with their rentals. It asks a lot of questions that they just don't understand, and the average TT user's reaction to questions they don't understand is to skip them or plug in 0.

Hire someone who is going to get it right and actually signs your return as a professional tax preparer when its finished.

SeattleCPA

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Re: Question about tax preparers
« Reply #5 on: November 18, 2016, 10:28:02 AM »
I agree with pretty much everything CPA CAT says.

The only two things I'd add are (1) if you're not really paying anything in taxes or paying much, I personally don't think it makes sense to hire a CPA. I.e., you'll make more errors with TurboTax and probably miss some opportunities as compared to a tax accountant... but you don't want to spend a dollar to chase a nickel... (2) TurboTax works great when all of your income appears on some informational return you get from the payer so a W-2, a 1099, a simple K-1, etc. However, if you've got to construct a profit and loss statement or build an accounting system to feed income and deductions data into your return, TurboTax doesn't produce all that great of results in my experience.

BTW, I run a CPA firm in Seattle area and we do small business and corporate taxes. (I mention that so you know my potential biases and blindspots...)



DavidAnnArbor

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Re: Question about tax preparers
« Reply #6 on: November 19, 2016, 12:58:32 PM »
Yes HR Block often makes mistakes.
How complicated is your tax situation ?

fredbear

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Re: Question about tax preparers
« Reply #7 on: November 22, 2016, 05:22:31 PM »
#1 TurboTax is enough to drive any professional preparer insane. What takes me 15 minutes on a professional tax software would take me an hour on TT.
.....

What broke me of TT a couple years ago was that moment when you'd gone along and gone along and entered all manner of data and answered all manner of insufferably breezy questions, and it suddenly said, "Got you, you twit!  If you want to finish this form you have to upgrade.  Click here to blow $40, or don't click here and scrap your return up to this point."  (Summary; not quite verbatim.)  The version you had, of course, had always previously provided that form. All of a sudden I realized how very tired I was of contemptuous customer service.  The divorce was as swift and avulsive as one of the great Doctor Sandra Lee's videos.

Since then I've gone with HR BLock CD version.  They are nicer.  It's not so great.  It has a tendency to throw up its hands and say, "Well, goldurnit, I cain't do that form, so could you just go ahead, review the instructions, fill in the blanks, make certain your math is correct, and put whatever you come up with in here?"  This induces a certain queasiness. 

I hired an Enrolled Agent to do the taxes for a trust we were winding up and she used professional software.  She was an old friend of the woman whose trust it was.  Somehow, the EA and her software did not manage to cast the poppy cake to Cerberus and we fell afoul of the California Franchise Tax Board, which is a little colder-hearted than a bureaucracy in Kafka.   When I realized that she, and They, and I, all had no real idea why the Board had announced we owed whatever it was charging us, I just got with my co-Trustee and we paid.   My thought, if brainlessly obvious, was still unanswerable: Why on earth spend $500 to get a simple 2 or 3-page final return done, and get fined anyway?

You may say I'm a dreamer, but I'm not the only one.  I think taxes should be doable by a person of completely average intelligence, IQ >= 90, on no more than 5 forms, in under 2 hours, without having to pay software companies or hire specialized genii like Ms Cat.  It should be like voting - You're a citizen, we trust you to vote, we trust you to pay your taxes, and we'll make system simple and friendly enough that you can.  Starting the laugh track in 5 ... 4 ... 3 ... 2 ...   

Cpa Cat

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Re: Question about tax preparers
« Reply #8 on: November 22, 2016, 07:30:09 PM »
#1 TurboTax is enough to drive any professional preparer insane. What takes me 15 minutes on a professional tax software would take me an hour on TT.
.....


I hired an Enrolled Agent to do the taxes for a trust we were winding up and she used professional software.  She was an old friend of the woman whose trust it was.  Somehow, the EA and her software did not manage to cast the poppy cake to Cerberus and we fell afoul of the California Franchise Tax Board, which is a little colder-hearted than a bureaucracy in Kafka.   When I realized that she, and They, and I, all had no real idea why the Board had announced we owed whatever it was charging us, I just got with my co-Trustee and we paid.   My thought, if brainlessly obvious, was still unanswerable: Why on earth spend $500 to get a simple 2 or 3-page final return done, and get fined anyway?

The CA FTC is the worst state tax agency in the entire country. It hates all humans. If you argue with it, it just triples your penalties. If you don't have a filing requirement in California, but somehow get on its list, it haunts you for YEARS.

No joke -  prior to becoming a CPA, we had a similar situation to you with a corporation my husband owned. We paid to have the return professionally prepared.  The first notice was for $600, and we wrote a polite letter disputing it... the second notice was $1200... so we called and got it "resolved"... the next notice was $2,500 and a notice to levy. We ended up paying it. The whole thing came up because our S-Corp owned a share of another S-Corp that had an employee who briefly did work in California one year, even though no money was made in California - hahahaha... it doesn't matter.

This year I got another letter demanding a tax return for California. TEN YEARS LATER.

And you're probably thinking... "But you're a CPA, you just made it go away, right...?"

HAHAHAHAHAHA.

I'm on the phone, trying to explain that we have no filing requirement in California - it's my third call, each "resolving" the issue and followed by a letter, each followed by escalating threats from CA FTB, and the agent tells me that 2006 wasn't marked final, that's why I have this problem. So I say, "If it wasn't marked final, then what happened to the last ten years of returns?" She says, "I don't show a request for those years." WTF? Is this some kind of zombie return? We thought it was dead, but now it's rising from the grave?

I actually had to get California's Taxpayer Advocate involved. We'll need to wait another ten years to see if it actually got resolved.

I can't imagine what it's like to be an accountant in California and have to deal with CA FTB on a regular basis. I am 100% convinced, by the way, that the mail room at the CA Franchise Tax Board is just one giant shredder that sucks up anything you send them, with a special filter mechanism for checks.
« Last Edit: November 22, 2016, 07:32:13 PM by Cpa Cat »

fredbear

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Re: Question about tax preparers
« Reply #9 on: November 22, 2016, 09:37:48 PM »
The CA FTC is the worst state tax agency in the entire country. It hates all humans. If you argue with it, it just triples your penalties. If you don't have a filing requirement in California, but somehow get on its list, it haunts you for YEARS.

Who-ee!  Ms Cat, don't hold back.  Just let it all out.  You'll feel better.  We're here for you.

I believe everything you wrote.  I was dumbfounded to learn, some years ago, that if you had ever earned any money in CA, the CA FTB attempted to levy on your pension in whatever state you now lived.  Any money earned in California was subject to CA state taxes, in perpetuity, is their position.  Apparently the state of Nevada just (politely) tells them to fuck off, their levies are ignored, which is one reason many CA retirees move there.

It's an outgrowth of a couple factors.  1) State-level compulsory empathy, producing ever-growing entitlements and ever-growing services.  It's not enough that you give individually, it's more efficient and, of course, caring, to compel everyone to give via their taxes.  And it's important that we also coronate state and municipal workers; their unions have been so generous to the politicians.  2) a state-level sock-the-rich mentality.  The problem is the eel-like ability of the rich to slither out of the net - defer income, slip it into post-retirement compensation schemes, take it as carried interest or unexercised stock options, refuse to sell appreciated stock even when the resulting taxes would make a big difference to the downtrodden via their tax gatherers, the CA FTB.  This kind of revenue harvesting makes any state that practices it terribly vulnerable; a vast portion of the revenues is supposed to come from a tiny percentage of the populace.  Like all other leverage it can run both ways, and if the tiny percentage who is supposed to pay so much craps out (as they know well how to do), there can be huge downswings in revenue.  Plus the rich are self-portable.  As a friend said of modern relationships, "Nobody has to be here."  If you are a part of the California royalty, you can sell a ranch house in CA and buy a ranch in New Mexico (Ed Marston). 

The poor sad lackeys at the CA FTB have to get it somewhere.  You and I are apparently sufficiently docile to be good targets.  Based on my experience, they simply make up some figure that you "owe," dare you to dispute and double it if you do, thus extorting your payment based on a muttered "life's too short."  When they did it to the trust, I thought about appeals, poring over the tax code, calls, letters on imposing stationery, etc, and I thought, "No.  I'm going to cave in."  And did.  People talk about the way the taxed decide to move to states where there is little or no state tax.  Your experience and mine suggests that at least some people are not so much moved by the dollar value they will save living elsewhere, as by a desire to get away from the larcenous arrogance of the tax agency.  I am FI, and could afford California taxes, but I am old and bristly and will not put up with that treatment again.  I will never move there, never invest there, and never do business in that state. 

With This Herring

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Re: Question about tax preparers
« Reply #10 on: November 22, 2016, 10:20:44 PM »
+1 to Cpa Cat's hatred of TurboTax and all other points.  What a mess.  I was used to working on professional software.  I left OldJob and was offered use of TT on CD by a family member.  NEVER AGAIN.  One million unhelpful questions, and then federal-state taxability differences on K-1 interest have to be entered backwards on the nasty input forms.  Family member with same K-1 had to amend his return once I showed him how botched up the final form gets if you input the interest in what would seem to be a logical fashion.

Same family member does his own taxes every year and then takes the resulting tax returns to a CPA (not me) to be checked.  CPA just sees paper, never TT.  I'm not sure if this is a gray area on the whole preparer signature thing (see Cpa Cat point #2, below).  I am not suggesting that this method would be appropriate for your case or any other.
#2 A paid tax preparer is required by the IRS to sign the tax return. TT offers no function for this. In other words, no - a reputable tax preparer would not agree to use TurboTax, because it breaks the rules.

Don't go to H&R Block, Liberty Tax, or any other pop-up shops that offer classes towards a tax-prep gig to all and sundry a month before tax season starts.

Cpa Cat

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Re: Question about tax preparers
« Reply #11 on: November 23, 2016, 01:16:44 PM »
Your experience and mine suggests that at least some people are not so much moved by the dollar value they will save living elsewhere, as by a desire to get away from the larcenous arrogance of the tax agency.  I am FI, and could afford California taxes, but I am old and bristly and will not put up with that treatment again.  I will never move there, never invest there, and never do business in that state.

This is exactly right, and exactly my policy.

In one of my tax publications recently, I read an amusing case of a man in Nevada successfully suing the CA FTB for harassment (Hyatt v. California Franchise Tax Board). California's law makes it immune from lawsuits over the conduct of its tax agents, and it argued all the way to the U.S. Supreme Court that the CA FTB was essentially above the law - and lost - but Nevada did have to apply its law in the same way that it would in a suit against its own government.

The case went on for twenty years though. Obviously, it's beyond normal people to fight the CA FTB. And certainly individuals within California are barred from doing so. Hyatt was extremely rich.

I tried to find the full list of Hyatt's original complaints, but couldn't find it. My recollection is that California tax agents came to Nevada, looked through his windows, raided his garbage, came to his church, his doctors, and other places he frequented, shared his social security number and private tax information with the other people, and falsified evidence for his audit.

Anyway - sorry to derail. :)



Spork

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Re: Question about tax preparers
« Reply #12 on: November 24, 2016, 09:30:40 AM »
I love this post.  I love the snarky wording.  And I had exactly the same reaction to Turbotax a couple of years ago.  (They backed off of it... but not before H&R sent me a free copy of their at-home software.)  Mostly I love the conclusion: a normal person should be able to read through the instructions and fill out the forms effortlessly.   

I've actually forced myself to do things manually a few times (and then re-did them with tax prep software to cross check).  It is a good lesson in understanding how stuff works... but geez, they have a way of changing "put the number from box 5 of your W-2 in box 16" into a 3 page dissertation that you require a lawyer to read.

#1 TurboTax is enough to drive any professional preparer insane. What takes me 15 minutes on a professional tax software would take me an hour on TT.
.....

What broke me of TT a couple years ago was that moment when you'd gone along and gone along and entered all manner of data and answered all manner of insufferably breezy questions, and it suddenly said, "Got you, you twit!  If you want to finish this form you have to upgrade.  Click here to blow $40, or don't click here and scrap your return up to this point."  (Summary; not quite verbatim.)  The version you had, of course, had always previously provided that form. All of a sudden I realized how very tired I was of contemptuous customer service.  The divorce was as swift and avulsive as one of the great Doctor Sandra Lee's videos.

Since then I've gone with HR BLock CD version.  They are nicer.  It's not so great.  It has a tendency to throw up its hands and say, "Well, goldurnit, I cain't do that form, so could you just go ahead, review the instructions, fill in the blanks, make certain your math is correct, and put whatever you come up with in here?"  This induces a certain queasiness. 

I hired an Enrolled Agent to do the taxes for a trust we were winding up and she used professional software.  She was an old friend of the woman whose trust it was.  Somehow, the EA and her software did not manage to cast the poppy cake to Cerberus and we fell afoul of the California Franchise Tax Board, which is a little colder-hearted than a bureaucracy in Kafka.   When I realized that she, and They, and I, all had no real idea why the Board had announced we owed whatever it was charging us, I just got with my co-Trustee and we paid.   My thought, if brainlessly obvious, was still unanswerable: Why on earth spend $500 to get a simple 2 or 3-page final return done, and get fined anyway?

You may say I'm a dreamer, but I'm not the only one.  I think taxes should be doable by a person of completely average intelligence, IQ >= 90, on no more than 5 forms, in under 2 hours, without having to pay software companies or hire specialized genii like Ms Cat.  It should be like voting - You're a citizen, we trust you to vote, we trust you to pay your taxes, and we'll make system simple and friendly enough that you can.  Starting the laugh track in 5 ... 4 ... 3 ... 2 ...