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Resources to Know About Before Filing Your Taxes

2012-03-23 by

So you’ve spent the last month dreading the thought of doing your tax return, but the day has come and you know it’s time to get it over with. You sit down and pull up your tax sofware, and start answering questions. Name? check Address? check….Then, you run into that question that you’re unsure about. It might be the number of deductions you can take, whether you are eligible for this credit, or how many business expenses you can claim. Whatever it is, you don’t want to get it wrong and have the IRS come knocking at your door. But, you have other work that needs to get done, and you just want to get this darn tax return over with!

When you can’t get a quick answer from the TaxQuips forum, here are three options you should consider that I’ve tried and tested over the years. Each one has its pros and cons.


  1. The free solution – The IRS actually offers a free helpline at 1-800-TAX 1040 (800-829-1040) that you can call to get tax filing help. Since it’s a free service (besides the – 40 minute wait time), it doesn’t hurt to try this one out. If you’re lucky, you’ll get in contact with an enrolled agent who can help you with your question. However, the help service is notoriously spotty, with a recent Washington Times study showing 3 out of 10 people who call the toll-free helpline won’t get through to a human being, and those that do are often redirected to the IRS website. In fact, the IRS itself warns you that you cannot rely on information you get from their printed or verbal guidance.

  2. The costly solution – Hiring a last-minute Enrolled Agent, CPA or tax assistant to answer your question is also a popular solution (especially for business owners). However, be aware that this costs anywhere from $100-500 per hour, depending on complexity, and is limited as to availability as the tax deadline approaches. The benefit here is, you will be getting someone to do your taxes for you, whose job is to keep up to date with the current tax code.

  3. The happy medium – a NEW RESOURCE – There’s a clever new website called Task.fm that offers a place where tax professionals will answer your personalized tax questions quickly for a set cost. For those of you with one-off questions that need to be answered, I would highly recommend looking into this. For an affordable rate (~$20), you get an Enrolled Agent or CPA who will answer your question in a short while. Not a bad deal if you ask me!


All said and done, what you’re looking for is a quick, accurate, and affordable answer to your tax questions.

If you have the disposable income and are willing to pay for someone to do your taxes, hire an Enrolled Agent or CPA (make sure you do your due diligence!).

If you are willing to do the gritty work of reading and understanding the tax code yourself, use the IRS helpline.

If you just want an answer quickly for an affordable rate, go to Task.fm . (Click here to bookmark).

Note: TaxMama and graduates of TaxMama’s Online Enrolled Agent Exam Review Course are among the tax professionals prowling this site to provide answers for you.

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Cyber Defenders Saves the Day

2010-10-01 by

We returned Tuesday afternoon to find parts of the house infested with ants. And one of my computers infected with something, or it got messed up during the brown-outs when temps hit 113 here in the Valley. The computer kept shutting down every few minutes for no apparent reason. So, I lost the week trying to get it to work properly. (It kept turning off – and Internet Explorer can’t access key sites, like the IRS site.) I did find a terrific solution, even though it took much longer than I would have liked to effect the fixes.

With all the possible choices – Norton, Kaspersky, McAfee, I decided to select McAfee to scan my computer for viruses and spyware. Turns out, there was no virus. But there was a bunch of spyware. It was a fortuitous choice. Not only do they provide the routine security software, they also have 24/7 telephone support service if you’re having a problem. Better yet, you can get unlimited tech support for up to 5 computers for under $300 per year from their Cyber Defender service. (In fact, you can get your computer diagnosed at no cost.)

http://www.cyberdefender.com/

Their tech support took over my computer controls and examined the files and cleaned up stuff that was clogging the registry and otherwise slowing the computer down. You can’t imagine what a reassuring feeling it is to just turn it over to them, without having to drag your computer to some service-center and hope you get it back in your lifetime.

The only problem? The kind techie who took my computer was too efficient. After he got done cleaning up, he didn’t ask me – he just started a defrag process. On a computer with gigabytes of hard drive (rather than the old devices with megabytes), the defrag processes take forever. It ran all day, late into the night. I have recommended to the company that they consider asking before defragging. Perhaps we might need to actually USE the newly functional computer? We can be trusted to run de-fragmentation processes while we sleep. Except for that really frustrating glitch (think biting nails and climbing walls), they were heaven-sent. If you use their services, tell them in advance to show you how to run defrag yourself – and do it at night.

We’re adults. We can be trusted.

Note: The service contract is well worth the money. You can deduct it as a repair and maintenance expense. And you can reach a live person 24 hours! Just when you need someone in an emergency. They help you on the spot.

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Small Business Software

2009-07-01 by

Today TaxMama hears from Leah in Georgia who wants to know. “What is the best small business tax software? I have doubts about QuickBooks and Quicken for business.”

Dear Leah,

Hmm…I can understand your doubts about QuickBooks and Quicken as tax software, since neither of them are. They are bookkeeping programs. Tax programs, for professional use, include software like ProSeries, Pro fx, Drake, ATX and more, programs you can find here: http://taxsites.com/software.html

Are you asking about the best software to use for bookkeeping? That’s a different matter. The best software depends on the level and complexity of information a company needs. You can get accounting programs costing several thousand dollars, or just a couple of hundred dollars. http://taxsites.com/software2.html

You’re right about Quicken. I see it used for business. But the reports are a total pain. Too much personal stuff gets mixed into it. It is terrific for managing and understanding personal finances. And it has some nice features I particularly like. But..no – not for business.

Personally, for working with small business offsite, I prefer QuickBooks online.
http://www.taxquips.com/index.php?id=552

Why? Without having to visit the client’s office or business location, I can do all the bookkeeping from my office. We can get on the phone and look at the same information at the same time. They don’t have to stop working, while I have their books – and I am not limited to the accounting adjustments in the accounting back up of QuickBooks.

Besides, everyone seems to be traveling for business these days. My clients can log in from anywhere in the world and enter their daily cash expenses, or issue checks.

It’s gotten much faster and more versatile than it used to be. AND, now you can convert a regular QuickBooks file to the online version when you set it up. That was not a possibility in the past.

The software has always been flexible. You can always make entries for prior periods, out of order – so you don’t have to wait until you have all the check information or invoice information. You can correct entries when you reconcile the checkbook. And if you learn all the capabilities of the system, you can use QuickBooks for just about any kind of business and generate just about any kind of reports. Those are just some of the reasons why I prefer it.

Stay tune to TaxQuips #1269 the comments from other tax and accounting professionals for their favorite software.
http://taxquips.com/index.php?id=1269

And remember, you can find answers to all kinds of questions about bookkeeping and other tax issues, free. Where? Where else? At TaxMama.com

[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]

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TaxQuips #552
Review of QuickBooks


Corporate Myths About Filing Tax Returns - and Extensions are due!

2009-03-13 by

Someone brought something interesting to my attention yesterday. And he made a good point. I’ve noticed it, too, especially in the nature of questions I get from readers who’ve set up a quickie corporation.

Folks who’ve incorporated, but never really got around to using the corporation seem to think they don’t have to file anything. Uh, unclear on the concept? Look, you set up a corporation. You alerted IRS that you exist by getting your federal ID number. IRS is looking for paper. They don’t know that you didn’t do a thing; that you never even opened a bank account; that you didn’t sell a dime’s worth of products or services.

How is IRS supposed to know that? Only if YOU tell them. That means you must file a tax return. Even if it’s all zeroes. And you have to file it by March 16th this year.

If you don’t really know what to do, at the very least, buy yourself 6 months of breathing space. File an extension. That would be Form 7006. It’s automically approved. No explanations needed. That will give you time to get advice and help, if you need it.

To make sure that your extension is received by the IRS on time, the best way to do this is to file electronically. Get 25% of by using this link with coupon code taxmama25. http://snurl.com/filelater

For those with corporations that have actual activity – like, running a real business, you may find yourself having to pay money with your extension. http://snurl.com/filelater is designed to let you pay electronically and to get a receipt for the payment. The neat thing about the way they’ve set up the payment system is that the money comes directly from your bank, instead of via a credit card – no ‘convenience fees’!

Although many states accept the IRS extension, the state in which you’ve incorporated may not. Look up your state’s rules here. You’ll also find links to the right state forms.

Incidentally, you can use http://snurl.com/filelaterto file your personal extensions and get an electronic receipt, too. Those are be due on April 15th.

Ask TaxMama
Where taxes are fun and answers are free
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The number ONE free tax podcast online
FileLater
Convenient Extension service for business and personal returns


What Would You Tell Obama?

2009-02-05 by

Brent Clanton on CNN650

When filling in for an absent guest with Brent Clanton this week, he asked me an interesting question. “What if President Obama came to you right now and asked your advice on how to re-start the economy? What would you tell him?”

What would YOU tell him?

Ask TaxMama
Where taxes are fun and answers are free
www.TaxQuips.com
The number ONE free tax podcast online



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