Author Topic: Stuck between a rock and a hard place: accountant vs. tax software  (Read 1305 times)

kms

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I know Iím kinda late but the reason Iím late is also the reason for this thread. For the last three years Iíve used an accountant to do my taxes. However, I am growing increasingly frustrated with her because she is always late (filed my 2018 extension on the last possible day, and I have yet to receive my 1040-ES payment voucher for the estimated taxes 2019 payment that was due April 15) and always has some sort of excuse. I stuck with her because she was incredibly helpful setting everything up and advising me after my wife and I had moved to the US in 2016, but 2017 and 2018 have both been a catastrophe (I ended up with a hefty penalty for 2017), and have decided to no longer rely on her services. I am, however, torn between finding another accountant, one that is more reliable, and doing the taxes myself.

Hereís my situation:
  • I am self-employed with customers abroad
  • No LLC yet, but am seriously considering starting one this year for liability reasons
  • I have two bank accounts that I get paid to, one in the US and one in Europe
  • My wife owns a property abroad (no rental income, used by family) and we have money in a shared bank account abroad, which means we have to file an FBAR
  • My wife is a regular employee and receives a W2 each year
  • As of January 2019 we have a daughter
  • We are married filing jointly

The first three points in particular were what drove me to get an accountant in the first place, in addition to setting up my business, but given that I am growing increasingly discontent I am seriously considering to switch to tax software instead. Either that or find a new accountant familiar with filing foreign earnings.

Any advice on what software to use? Iíve heard good things about TurboTax Home & Business and H&R Block Self-employed. Not sure which one is better; theyíre priced about the same. Which one is easier to use, anyone experienced with both? Will either of them work in my/our particular situation?

walkwalkwalk

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #1 on: April 18, 2019, 08:46:29 AM »
The only part I would caution you about is the FBAR. Are you comfortable filling out that form? If so, they have a fillable PDF that submits via email on FinCen's website. https://www.fincen.gov/report-foreign-bank-and-financial-accounts

Also, setting up an LLC may be complex considering the international aspects. I would talk to an attorney about that.

kms

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #2 on: April 18, 2019, 09:29:57 AM »
Thanks, that was a great tip. I've looked at the FBAR filing requirements and forms and am fairly confident that I should be able to fill out that form.

The LLC is a separate issue. That I agree with you on, I will definitely need to talk to a professional (attorney, CPA, etc.) about that. For now, I would like to keep this issue separate though since I am at the moment not too worried about liability issues just yet.

Midwest

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #3 on: April 18, 2019, 09:45:48 AM »
An LLC set up as a disregarded entity is simply reported on your return.  In my state, they are really easy to set up.  As stated above, you need to understand any implications from an international perspective.

If you decide to do yourself, look at taxact.  Turbotax is awful.  The only downside in your situation would be the FBAR is not integrated into the tax return on taxact.  Not sure about turbotax.

The penalties for screwing up the foreign filings are draconian so be careful not to run afoul of that and make sure you file all of them.

Cpa Cat

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #4 on: April 18, 2019, 09:52:14 AM »
I think if the only thing you dislike about your accountant is the timing of the filing, you may want to simply tell her you're dissatisfied with that aspect and ask her when you need to turn in your documents in order to guarantee that your return is finished by April 15.

Assuming you're able to turn in your documents by the date she tells you, that should eliminate your problem with her.

kms

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #5 on: April 18, 2019, 03:49:15 PM »
I think if the only thing you dislike about your accountant is the timing of the filing, you may want to simply tell her you're dissatisfied with that aspect and ask her when you need to turn in your documents in order to guarantee that your return is finished by April 15.

Assuming you're able to turn in your documents by the date she tells you, that should eliminate your problem with her.
Honestly, I think that ship has sailed. I have already tried that approach but it hasn't worked. To summarize a long story: she asked me to provide her with preliminary 2018 data until mid January so she could calculate the estimated payments for 2019. I emailed her everything she needed on December 31, 2018. It is now April 18, I am already three days overdue for my first 2019 payment, and I have yet to receive my payment vouchers.
« Last Edit: April 18, 2019, 03:52:31 PM by kms »

Sibley

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #6 on: April 18, 2019, 04:18:18 PM »
At a minimum, you need a new accountant. I'd actually question if they're not in violation of professional standards - being late and causing penalties due seems like a huge no-no. (I am a CPA but not in that line of work anymore, thus memory is rusty)

DavidAnnArbor

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #7 on: April 19, 2019, 02:21:35 PM »
Your accountant is responsible for paying those penalties that she caused  you to have for her tardiness given that you gave her all the info she asked for.

You have a case in small claims court for the penalty.

You also should find another tax accountant who will do things right. Once you understand your return then you could use software, but because of the complicated nature of the return, the software might force you to use one of their accountants to finish the return, and tack on an additional price.

wageslave23

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #8 on: April 23, 2019, 10:32:51 AM »
Your accountant is responsible for paying those penalties that she caused  you to have for her tardiness given that you gave her all the info she asked for.

You have a case in small claims court for the penalty.

You also should find another tax accountant who will do things right. Once you understand your return then you could use software, but because of the complicated nature of the return, the software might force you to use one of their accountants to finish the return, and tack on an additional price.

Did you provide her with EVERYTHING by her deadline?  A lot of clients will send in some random stuff early on and then not respond promptly to follow up questions.  They get moved to the back of the line.  If you are prompt in responding to her information requests then yes - get a new accountant.  But in your situation you definitely should use an accountant.  What I recommend is that if you have a business or rental property then use an accountant, they will pay for themselves.  I have worked full time in the industry for 10 yrs and I still have to seek out colleagues for help on issues at times and this is with using professional tax software.  I'm close to FIRE so I'm not just saying this to justify the industry.  I'd love to see the whole industry crash and burn, but right now its a necessary evil with all of the intricacies in the tax code.

kms

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #9 on: April 23, 2019, 04:42:40 PM »
Yes, I did. Everything she said she needed in order to send me the estimated tax payment vouchers by April 15. It is now April 23 and I still haven't heard back despite repeated inquiries.

Thanks everybody for your opinions. Guess it's time to start looking for a new accountant, I already have two recommendations from friends that I am going to contact this week.

SeattleCPA

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #10 on: April 23, 2019, 05:25:29 PM »
I think if the only thing you dislike about your accountant is the timing of the filing, you may want to simply tell her you're dissatisfied with that aspect and ask her when you need to turn in your documents in order to guarantee that your return is finished by April 15.

Assuming you're able to turn in your documents by the date she tells you, that should eliminate your problem with her.
Honestly, I think that ship has sailed. I have already tried that approach but it hasn't worked. To summarize a long story: she asked me to provide her with preliminary 2018 data until mid January so she could calculate the estimated payments for 2019. I emailed her everything she needed on December 31, 2018. It is now April 18, I am already three days overdue for my first 2019 payment, and I have yet to receive my payment vouchers.

This comment from a CPA...

You really need to stay within the lines if you want to get good service from any CPA or CPA firm and not pay a huge amount of money. That means using the organizer they supply, turning in all your materials at one time and in an organized fashion, using a decent accounting system for rental properties and small businesses, and then responding quickly to the queries from CPA.

Further, you need to give them time. They do several hundred returns in a few weeks. A client breaks the system if they need a "custom tailored" approach... or they really need more than just a tax return but also help organizing their financial records. Or if they need the accounting done.

One other comment. Consider the price you're paying. If you're paying less than H&R Block (where people earn $11 an hour according to glassdoor), you're not getting a professional service. You'll getting document preparation.

BTW? I support the idea to use TurboTax or something like that. Your finances however may be too complicated.

kms

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #11 on: April 29, 2019, 12:20:22 PM »
BTW? I support the idea to use TurboTax or something like that. Your finances however may be too complicated.
Yeah, I've already talked to one of the recommended accountants and we are working through the havoc my previous accountant left behind as we speak. Based on the tips and information I've received already he will be more than worth his money.

Thanks again everybody for your help and input.

A Fella from Stella

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Re: Stuck between a rock and a hard place: accountant vs. tax software
« Reply #12 on: June 23, 2019, 06:47:48 AM »
The software is a pain if you have more than a job and a house. Use a CPA, but let the guy know that you expect the return to be completed within 30 days of everything being sent to him. If he can't comply, you must find someone new.

My return covers 3 states, and is 150 pages long. My CPA gets the stuff done in less than a month, and I pay him promptly. We have that sort of arrangement, and neither would tolerate something other than that.