Author Topic: Highway robbery... Last min taxes, CPA wants 2500!!!  (Read 3144 times)

MissGinger

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Highway robbery... Last min taxes, CPA wants 2500!!!
« on: October 13, 2015, 01:55:33 PM »
Been a big year - attempted jumped in to stash lifestyle=chaos. Sold giant big stupid house, moved (twice, three times if you include the stint in a 25' RV while we tried to find a place to live in new state). Ok enough excuses.

We need to file our taxes - by Thurs. Found the paperwork in the back of the third POD, found a tax guy willing to do said taxes, and just got the estimate - $2500 - 3k. Back in our old life, I thought we were getting reamed at $1000/yr.

Last year didn't seem that complicated...Income was largely W2, we had a rental, sold it, and initiated a 1031 exchange (didn't complete transfer in 2014, so it's going to continue into 2015).

I guess my question is how do I buy some time to find a more reasonable tax person? I was thinking of doing my best w turbotax, filing, then filing amended returns with help from a reasonable CPA after the 10/15 deadline. Any other ideas?

COlady

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Re: Highway robbery... Last min taxes, CPA wants 2500!!!
« Reply #1 on: October 13, 2015, 02:13:14 PM »
CPA here. Sounds a little bit high on the estimate but it is October 13th after all....comes with a huge premium.

Sounds like you could have some state allocation issues that can take significant time depending on the state (every state wants their cut from the time you lived there). I would have to do research on the initiated but not completed 1041 issue.  Also, have you been doing your taxes yourself in the past? I generally add $500 to an estimate for someone with a rental that has done their own taxes in the past without much tax knowledge.  Typically the rental is not accounted for properly by the client and it takes me significant time to fix past mistakes if they're material (CPAs can't just turn a blind eye to known tax issues).

I'm not in public accounting anymore (do some tax prep on the side).  To be honest I wouldn't want a CPA that's been working 80 hour weeks complete my tax return on October 15th. Even the best person is going to make mistakes when tired and may not find the best solutions for your situation.  I would do as you suggest and file your tax return via Turbo Tax doing the best you can and then take it to a CPA to review and amend later.  Then if you owe additional tax at least you will be subject to only the failure to pay penalty and not the failure to file penalty which is much larger.


catccc

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Re: Highway robbery... Last min taxes, CPA wants 2500!!!
« Reply #2 on: October 13, 2015, 02:16:04 PM »
another CPA voting for you to use turbotax.  Mostly because of the timing, so you can shop around and amend if necessary.  (I have to file DH's state biz taxes and our personal state taxes by Thurs.  Really Wed. night, I can't count on being down to the wire and making the post office in time on the 15th...) 

COlady

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Re: Highway robbery... Last min taxes, CPA wants 2500!!!
« Reply #3 on: October 13, 2015, 02:21:22 PM »
Ha ha CATCC! I have to file my mom's taxes with 5 public traded partnership sales by Thursday morning as well! CPAs are always good at pushing taxes out until the last minute.

Cpa Cat

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Re: Highway robbery... Last min taxes, CPA wants 2500!!!
« Reply #4 on: October 13, 2015, 02:31:16 PM »
I just want you all to know that I'm a CPA and I did my own tax returns back in April. :)

Also, all of my clients are done. The latest I want to E-file is Oct 14, so that I can be sure I have all of my IRS acceptance confirmations in and I'm not following up with anyone last minute on Oct 15.

You can do TT and amend. Also remember that TT has phone support and that you can schedule a callback from them if the phone queue is long. And they do hire CPAs and EAs to offer limited tax guidance.

MoonShadow

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Re: Highway robbery... Last min taxes, CPA wants 2500!!!
« Reply #5 on: October 13, 2015, 02:44:43 PM »
Back in our old life, I thought we were getting reamed at $1000/yr.

You were, but presumably that was before April 15th, not October 15th.  Can you file an extension yourself?

COlady

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Re: Highway robbery... Last min taxes, CPA wants 2500!!!
« Reply #6 on: October 13, 2015, 02:51:51 PM »
Moonshadow....there are no more extensions. October 15th is a 6 month extension from the original due date of April 15th.

MissGinger

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Re: Highway robbery... Last min taxes, CPA wants 2500!!!
« Reply #7 on: October 13, 2015, 02:55:27 PM »
More info...
- We did file for the extension back in April
- "New" CPA here has had my tax organizer and paperwork for 2 weeks, before providing his "estimate" today. His estimate was 4-5x the amount the friend who referred me to him paid a few years ago
- Didn't move out of state till 2015, and hopefully the dust will settle and we can have our act together for an orderly April 2015 filing!
Driving now to go pick up my tax docs from "new CPA"

COlady

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Re: Highway robbery... Last min taxes, CPA wants 2500!!!
« Reply #8 on: October 13, 2015, 03:08:05 PM »
Missginger, every client's situation is different.  CPAs bill by the hour so your friend's return may have been a slam dunk and that's why it was 5X cheaper than yours. However, he/she shouldn't have waited 2 weeks to give you an estimate.

COlady

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Re: Highway robbery... Last min taxes, CPA wants 2500!!!
« Reply #9 on: October 13, 2015, 03:12:20 PM »
You might consider asking that CPA what they would charge to review and amend your return after October 15th.  I'll bet a large amount of that $3k is the fact that all the guy wants to do is take a nap or drink a beer, or both.  There is probably a bit of padding in there for the fact that you gave him the stuff in October. Maybe not, but you can ask.

I retract my previous statement of CPAs work on an hourly basis.  During the period of Oct 1 - Oct 15th, CPAs work on an hourly basis plus a huge premium for super late clients. I know my firm did...because most clients will willing pay the additional fee so why not. We called it the PIA add on.

jwright

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Re: Highway robbery... Last min taxes, CPA wants 2500!!!
« Reply #10 on: October 13, 2015, 03:18:01 PM »
As a tax CPA as well, I wouldn't take you as a client at this late date, so I assume you are getting charged a premium.

Also, partners in my old firm billed at $300 - $350 per hour, the cheapest associates at about $150.  Assuming a blended average, they are estimating 12 hours or so to do a first year return with a 1031 and multi state issues.  I don't think that's unreasonable for my area.