How to Choose a Tax Preparer

With the 2015 tax filing season quickly approaching, I thought I would share this article the IRS published earlier this month about how to “Make a Wise Choice when Selecting a Tax Preparer”. I summarized a few key points below, because lets face it, it’s 2015 and nobody has the attention span to read a full article.

Here are some key take-aways:

  • Select a professional you trust. Since they will have access to sensitive data, including your social security number along with income and investment data, make sure you aren’t handing an engagement over to someone who could compromise your personal data. At Launch Consulting, we safeguard your data and use a secure file exchange software to protect your privacy.
  • Ask about preparation fees upfront. No-one likes surprises, especially in April around deadline time. Avoid any preparer that charges a fee based on refund, or says they can get you a larger refund. If a CPA is telling you this, it’s 100% unethical and against the rules of the State Board holding their license.
  • Make sure your preparer doesn’t disappear after April. Sometimes questions arise and you need your preparer to clarify. At Launch Consulting, we are with you year round, not just for tax preparation, but for tax planning and business consulting. We want to see you succeed, and we promise to be there every step of the way to help.

Lastly, only Enrolled Agents (EA), Certified Public Accountants (CPA), and Attorneys have unlimited representation rights in front of the IRS. As a licensed CPA, I can represent you on any matters including audits, payment/collection issues, and appeals.

 

The full article can be read here.

For any questions about business or personal taxes, contact Paul Glantz, CPA at paul@launchconsultinginc.com

Five Tax Strategies Now for Refunds in April

As the year winds down, there is nothing more important than discussing year-end tax strategy. Building communication between yourself, your CPA, and your investment advisor will guarantee you are a winner come April 15. Far too often, poor decision making and bad planning will lead to a big bill from the IRS. I’ve compiled a list of five powerful tips you can use now to help reduce your tax bill next year.

  1. If you had any big losers in the market this year, consider “realizing” these losses, and preserving your investment position by purchasing back that same security 31 days later.
  2. Consider using a credit card to pay deductible expenses before the end of the year. The IRS operates on the “year of swipe” principle. So while you will not receive the bill for these expenses until 2016, you can benefit from the deduction in 2015.
  3. Apply strategy to your itemized deductions. In some states, and cities (like Austin, Texas), you can make your property tax payment between October and January. If planned correctly, you can double your real estate tax deduction every other year, while still taking advantage of the standard deduction for in-between years.
  4. Defer income and accelerate your deductions. Ask your boss to hold on to that year-end bonus until January or have your employer bump up your last few 401k contributions. Other strategies for accelerating your deductions include increasing the amount you set aside for next year’s FSA or, if eligible, make a full years worth of HSA contributions before December 1, 2015.
  5. If you made a Traditional to Roth IRA conversion earlier in the year, and the value of the assets has since declined, you could wind up paying a higher tax than necessary. You can combat this by backing out of the transaction, and re-characterizing the conversion. Later, you can reconvert to a Roth.

Stay tuned for more tax planning tips as we wait for information on any “extender legislation” for temporary tax rules set to expire Dec 31.

For more information on year end planning, contact Paul Glantz, CPA at paul@launchconsultinginc.com

 

IRS releases publication with “Ten Tax Tips for Farmers”

Being that many of my clients are from Austin, Texas, I thought I would share this publication released by the IRS yesterday.

Here is a brief overview of some of the more important tips:

Net income losses: If your farm generates a negative profit (expenses greater than income), you may be able to carry this loss back to offset taxes paid in a prior period, thus generating a refund. You also have the option to carry it forward and offset future year income and taxes.

Weather related sales: This one is important as we’ve seen some dry periods in Texas, especially during 2011 when we had the Bastrop fires. If you are forced to sell more of your livestock because of drought or flooding, then you may be entitled to delaying the gain from these sales.

Loan Repayment: While you’re entitled to a tax deduction for all ordinary and necessary business expenses, only interest paid on a loan nets you a deduction. It is important to note, that the loan must have been used for business, and not personal purposes.

Fuel Credits/Refunds: Use an ample amount of fuel on the farm last year? This provision written in the code allows for a credit or refund of excise taxes paid on fuel for farming purposes.

For more information, please contact Paul at paul@launchconsultinginc.com or visit the IRS website for more details.