There are so many different messages coming out of DC, per the media, that if you try to make sense of it all through the mass media lens, then you’re bound to work at cross purposes with yourself.
There’s the Republican health care bill, and the current version of the bill is dominating political headlines.
Or, of course, there’s the initial budget being proposed by President Trump which is sure to make certain sectors, of my client base pretty happy.
Then again, there are the war drums being banged (once again) from North Korea …
Happy Spring, everyone!
But truly, if you subject yourself to media hysteria, you will make 1) poor financial decisions (because things ALWAYS change) and 2) you will remain in a state of continuous frustration and anger — because that’s what the media feeds on, no matter the political tilt.
I choose to “opt out” of the hysteria. While, of course, keeping my powder dry to respond to REAL issues in my life.
And YOU get the luxury of being able to trust that my staff and I are following all of the tax law changes as they come, and taking greatest possible advantage on your behalf.
Of course the tax law we’re currently using for return preparations has been “in the books” for quite some time now, so we’re not needing to make any rapid shifts these days. Just working the plan, and helping you save the most amount possible.
Speaking of savings… I see many IRAs set up this time of year, and of course, as we review our clients’ return information. But I also see some common mistakes, and I’d like to help you with those.
Let this be a “palate cleanser” from all the chaos, and let’s take a positive step towards saving WELL this week.
4 Very Common Mistakes Brooklyn Investors Should Avoid When Opening An IRA
“Part of making good decisions is recognizing the poor decisions you’ve made and why they were poor.” -Warren Buffett
Opening an IRA for your retirement is almost always a good investment, but it’s not always a simple process. There are IRA alternatives (like a SEP, 401k, etc.) that many of our clients know how to use (but you might not), there is the Roth option, and of course there are also the pitfalls that people fall into when setting them up. For example:
Not getting professional advice.
Don’t try to do this on your own. Despite the many softwares, websites, etc. trying to lure you with the promise of saving money on commissions or other professional fees, those who work with a professional do tend to see better overall returns over time, for a number of reasons. Not to mention the timely, expert advice they can provide when you need it — which you surely will from time to time.
If you are reading this post, whether as a client (or you’re considering still working with us) or someone passed it on to you, know that we are in your corner from the get-go for these sort of questions.
Naming the wrong beneficiaries, or not naming any at all.
Making your minor child a beneficiary will require a court-appointed guardian to manage the money until the child turns 18. If you fail to name a beneficiary, it is likely the IRA will become payable to your estate upon your death. This unnecessarily subjects the IRA to estate taxes.
Confining yourself to the form.
Most account agreements allow little space in which to name more than one beneficiary. With a little jiggering though (whether with an additional paper tacked to the initial paperwork, or by working the software a little) you can make sure to add the information of all beneficiaries, and exactly how you want the account to be distributed.
Thinking your financial institution keeps records of everything.
In this age of mergers and acquisitions, who knows where your records could be? Keep copies of your account agreement and beneficiary designations, and let your professional and your family know how to find them.
And as I mentioned, we’re here to help. Let me know if you have any questions.
James Pantzis, CPA, PC
This past Sunday, the NCAA revealed the brackets for March Madness. The country will be inflicted with a particular form of hysteria these next few weeks, but unfortunately, this little national hoops holiday isn’t one which my staff and I get much chance to participate in. We’re too busy doing your taxes!
Yep, this is close to our busiest time of the year, and we’re working “like mad” (see what I did there?) to handle the increased volume this year. Because with all of the political chaos out there, it’s clear that people want real answers from someone who knows them — and cares.
But let me say this: though my business does well this time of year, I’d rather things were better and our tax code was simpler. I’d rather the economy was roaring and everyone felt confident enough to handle their own financial forms.
However, the sheer complexity of the tax code keeps me in business — to take the hassle away from you, and apply our expertise to your situation. But wouldn’t it be more efficient if paying taxes didn’t actually require so much expertise?
I know … a bit of a controversial statement from a tax accountant. But I get tired of seeing new clients bring last year’s tax returns to us–and realize that if we’d helped them sooner, they would have saved a bunch of money (fortunately, we *can* file amended returns!). If things were simpler, people would keep more of their money — and THAT’S one of my passions.
Now, I have some thoughts here that might feel a bit controversial. But I’d love your thoughts on it, and I read every note that comes my way.
Why You Should Consider Giving Away Your Tax Refund by James Pantzis
“If you do what you’ve always done, you’ll get what you’ve always gotten.” -Tony Robbins
We have many clients who are receiving tax refunds this month, and that number of course will only be rising. So, here’s a thought for you: What would it look like for you to give your refund away?
Yes, this is a radical idea to think about, but consider: what does this tax refund represent to you?
If you’re like many families, it’s a bit like “found money” — i.e. an unexpected windfall. And, in those scenarios, it’s tempting to hoard it, or to splurge.
However, as with other windfall scenarios which I’ve written about in the past, one of the smartest things you can do is to give a portion (at least) of it away.
Why do I suggest this?
Well, I believe it’s actually enlightened self-interest in the long run. And not just in your sense of “feeling good”.
I see the balance sheets of people from every walk of life, and over the years I’ve noticed an interesting phenomenon: individuals and families who make giving a priority, even when they aren’t “wealthy”, seem to do better in the long run. And I mean financially — not just in their state of mind.
(Though, there are significant soul reasons for giving. Have you seen, as I have, that those who freely give seem to be more pleasant company?)
Before you write this off as being “ask the universe” mushiness, understand that 1) I don’t subscribe to that baloney and 2) I am merely reporting an observed phenomenon. Do with it what you will.
You see, I make it a point to observe how money works. And, for some reason — money gets attracted to those who aren’t merely in hot, desperate pursuit of it. It’s almost like it is in romance — potential lovers are usually turned off by the overly-aggressive seeker.
So consider this. I know it might feel painful. But trust me when I tell you that it can actually provide you with a deeper feeling of joy than if you choose to cling tightly to everything that comes your way.
I hope I didn’t ruffle your feathers … but if so, understand that most of all, we are here to walk with you no matter WHAT your balance sheets look like, or what you choose to do with it.
And lastly, we’re here to help. Let me know if you have any questions.
James Pantzis, CPA, PC
These days, I’m often glad that it’s our busy tax filing season, so that I have an easy excuse when political conversations are happening: Oh THAT [crazy new political story]? Huh, didn’t see it — I’m too busy with tax season.
With all of the chaos out there, the division and shouting — from Washington to Facebook to right here in Brooklyn, it’s helpful to try to tune out the shouting and focus on what is actually in our sphere of productivity.
So speaking of being productive, it might be time to get moving on your tax files, if you haven’t already.
The IRS did a study a few years ago that computed that the *average* time that it takes to complete a tax return is 22 hours. And obviously, that number varies by the return, but I’m reminded (again) of the blessing that it is to free our clients’ TIME — not to mention the additional deductions we find, the stress we remove, and the security we can provide in knowing that it’s being handled right.
Already, we have many, many Brooklyn tax clients who have filed, have received refunds and have written us notes telling us that they’ve never been more pleased with their filing experience. And of course, this makes me happy, as you might imagine.Now, I’ve got something here that we posted towards the beginning of January, but as we are moving into the depths of March, I thought it would be worth posting once more…
James Pantzis’s Tax Paperwork Checklist
“We are not retreating — we are advancing in another direction.” -Douglas MacArthur
With the increased penalties associated with the ACA in 2017, and all of the other changes every year, filing your taxes on your own is not for the faint of heart — even with nice-looking softwares on the market which purport to make it easy for you.
But that’s what we’re here for. Let us be your easy button.
Below is a list of what you will need during the tax preparation process. Not all of them will apply to you — probably MOST will not. Nonetheless, it’s a useful checklist.
Before you get overwhelmed: yes, this is a long list — but it’s the unfortunate reality of our tax code that it’s not even comprehensive! But these items will cover 95% of our Brooklyn tax clients. Really, this is for ensuring that we’re able to help you keep every dollar you can keep under our tax code.
Even if for some strange reason you won’t be using our cost-effective services this year, feel free to use this list as a handy guide…
Social Security Numbers (including spouse and children)
Child care provider tax I.D. or Social Security Number
Employment & Income Data
W-2 forms for this year
Tax refunds and unemployment compensation: Form 1099-G
Miscellaneous income including rent: Form 1099-MISC
Partnership and trust income
Pensions and annuities
Jury duty pay
Gambling and lottery winnings
Prizes and awards
Scholarships and fellowships
State and local income tax refunds
Health Insurance Information
* All 1095-A Forms from marketplace providers (if you purchased insurance through a Marketplace)
* Existing plan information (policy numbers, etc.)
* If claiming an exemption, your unique Exemption Certificate Number
* Records of credits and/or advance payments received from the Premium Tax Credit (if claiming)
Residential address(es) for this year
Mortgage interest: Form 1098
Sale of your home or other real estate: Form 1099-S
Second mortgage interest paid
Real estate taxes paid
Rent paid during tax year
Interest income statements: Form 1099-INT & 1099-OID
Dividend income statements: Form 1099-DIV
Proceeds from broker transactions: Form 1099-B
Retirement plan distribution: Form 1099-R
Capital gains or losses
Auto loans and leases (account numbers and car value) if vehicle used for business
Student loan interest paid
Early withdrawal penalties on CDs and other fixed time deposits
Personal property tax information
Department of Motor Vehicles fees
Gifts to charity (receipts for any single donations of $250 or more)
Unreimbursed expenses related to volunteer work
Unreimbursed expenses related to your job (travel expenses, entertainment, uniforms, union dues, subscriptions)
Education expenses (tuition and fees)
Child care expenses
Medical Savings Accounts
Tax return preparation expenses and fees
Estimated tax vouchers for the current year
Self-employment SEP plans
Self-employed health insurance
K-1s on all partnerships
Receipts or documentation for business-related expenses
State and local income taxes
IRA, Keogh and other retirement plan contributions
Casualty or theft losses
Other miscellaneous deductions
We’re here to help. Let me know if you have any questions.
James Pantzis, CPA, PC
Four Tips On Gently Encouraging Your College Graduate Living At Home To Independence by James Pantzis
It’s a hard world out there, for sure.
(You know it’s tough when they can’t even get the Best Picture award right at the Oscars!)
And for our young millennials, it sure seems like things are harder than they were when we were entering the workplace life.
If you haven’t already watched this, I highly encourage you to check out this video clip of best-selling author and thought leader, Simon Sinek, about the particular challenges faced by a generation of young people who have been raised in the world of Facebook, streaming video and instant communication:
Sometimes our technology, which promised to make our lives better, carries a bunch of unintended consequences that we don’t see right away.
And sometimes, our love for our children can prevent them from growing in the way they need to, or from taking on the responsibilities that make for a fuller, more rewarding life.
I’ve seen this dynamic with a few clients, and so I thought I’d offer some tips on helping our younger ones move forward with more effectiveness.
And out of our basements!
[And yes, we’re cranking through tax season and our calendar is very full. But that does NOT mean we don’t have time set aside for you.
Email me by clicking the email button in the upper-right corner of this page or call us ((718) 858-9864), and let’s get you on the calendar ASAP so that we can ensure you aren’t “lending” unnecessary money to Uncle Sam.]
Four Tips On Gently Encouraging Your College Graduate Living At Home To Independence by James Pantzis
“We believe in ordinary acts of bravery, in the courage that drives one person to stand up for another.” -Veronica Roth
If you’ve got a recent college graduate living at home, searching for his or her first “real” job, you know how difficult the job hunt can be these days. In the interest of getting your kids off the sofa and out of the house, here’s some of my advice…
1. Clean up the online profiles. Potential employers will check your new grad’s profile on Facebook and other social media sites. Advise your job-seekers to remove images and language that might give recruiters pause. Coach them on how to use sites like LinkedIn to create a more professional online persona.
2. Network. Your son or daughter might be tired of hearing, “It’s not what you know, it’s whom you know,” but it’s still true. If you have useful contacts, introduce your children. Otherwise, nudge them toward making an effort to connect with people in their chosen field, and advise them on how to act.
3. Work for free. This may seem counterintuitive when you want your children to start making money, but internships and volunteer work can teach them useful skills while introducing them to the world of work, and can bring them into contact with a wider range of networking contacts who may be able to help them in their fledgling careers. I can’t over emphasize how powerful this strategy can be, especially if your child wants to break into a difficult industry.
4.Update the wardrobe. Remind your kids that jeans and T-shirts won’t make the grade in most workplaces, especially when they’re interviewing there. Help them pick out some sophisticated, professional-looking outfits so they can go out into the world with style.
To your family’s lasting financial and emotional peace — including your grown children …
James Pantzis, CPA, PC
Every year around this time of year, the Treasury Department releases their list of the various shenanigans that criminals and the like try to pull around taxes. Obviously, this activity peaks around now, and so it’s a very good idea to be on your guard.
Last week, the IRS completed their 2017 IRS Scams list, and though it isn’t substantively different from last year’s list, the tactics within each category keep evolving. Fortunately, with us in your corner, you don’t need to worry much about these.
But readiness is always something I encourage. These shenanigans include different ways that perpetrators would want to steal your personal information, scam you out of money or talk you into engaging in questionable behavior with your taxes.
And before I explain about these (and how to guard against them), I also wanted to ask you a favor…
Would you leave us a review on Yelp or Google Maps for other potential clients to see? We have found that these sources can be so helpful for people evaluating their options, and we would love to have as much information there as possible. Thank you!
Now, onto those dirty dozen…
The Top 12 2017 IRS Scams by James Pantzis
“Don’t think or judge, just listen.” -Sarah Dessen
Scammers are creative … but not THAT creative. As I mentioned, this list is similar to the one from last year.
And if they were so smart, they’d be doing something real, instead of criminal.
But knowing what to look out for is only the first step. After I describe these, I’ll give you a quick rundown on how never to get taken in.
This is the list — presumably in the order of most common first, and in the order in which the IRS described them.
Phishing: This is when people use tax time to try to get you to do something that might help them steal your personal info. Know this: The IRS will never initiate contact with taxpayers via email about a bill or refund. So don’t click on anything that says it’s from the IRS, because it almost certainly is not.
Phone Scams: This was much bigger last tax season, but in October 2016, one of the primary phone centers from which these calls originated was raided. But phone calls do continue, and it usually involves con artists threatening you with police arrest, deportation and license revocation, among other things. The IRS always initiates contact with you via postal mail and typically only contacts you via phone for an ongoing correspondence.
Identity Theft: This isn’t “tax related”, except that people like to steal SSN info, and file taxes before you do. Simple solution: file your taxes before the scammers file your taxes. We can help with that.
Return Preparer Fraud: Believe it or not, there are some tax pros who get set up with the IRS for purposes of stealing personal information and perpetrating refund fraud. The good news is that such tax professional outfits are pretty easy to spot. For one, they usually don’t keep in touch with their clients via a weekly blog. 😉
Fake Charities: This is when organizations set up shop for the purpose of soliciting (supposedly tax-free) donations. They imitate legitimate organizations and unsuspecting donors give them money. The IRS has a tool you can use called “Select Check” to ensure the organization you’re donating to is legit.
Inflated Refund Claims: Don’t have anyone prepare your taxes who asks you to sign a blank return or charges fees based on a percentage of your refund. This is a no-no.
Excessive Claims for Business Credits: There are two credits that the IRS is keeping an especially close eye on. One is the fuel tax credit, which is a tax benefit generally not available to most taxpayers and most often limited to off-highway business use, including use in farming. The other is the research credit. Research activities have to be scrupulously documented to qualify.
Falsely Padding Deductions on Returns: Basically, this is about lying on your return and improperly claiming credits such as the Earned Income Tax Credit or Child Tax Credit. This problem, and the IRS trying to fix is, is why refunds were delayed this year for many.
Falsifying Income to Claim Credits: Sometimes con artists will try to get taxpayers to falsely claim income so they can qualify for the Earned Income Tax Credit. Basically again, don’t lie to the IRS.
Abusive Tax Shelters: Sometimes tax pros invent complicated schemes (usually involving insurance) to falsely enable clients to avoid paying any tax. If someone offers you a scheme that sounds too good to be true, check it with us.
Frivolous Tax Arguments: This is aimed at the crowd that claims that the income tax “has never properly been legislated” and so therefore nobody should have to pay any tax. You can understand why the IRS doesn’t dig that. Here’s their rundown on the various schemes: https://www.irs.gov/tax-professionals/the-truth-about-frivolous-tax-arguments-introduction
Offshore Tax Avoidance: Not a great idea these days. The Panama Papers, while fascinating, aren’t a guide for financial planning.
Now … in order to avoid this stuff, it’s actually quite simple.
1) Be skeptical. Don’t just take somebody’s word for it, especially if they are contacting you via phone.
2) Don’t reply to (or click on) emails, calls or other communication without first confirming that the source and sender is legitimate. If you get something that seems hinky, check with us.
3) Did I mention that you can check with us? Sure, you can go to the source itself (the IRS), but this is after all what we are here for.
Allow us to serve you well.
To your family’s lasting financial and emotional peace…
James Pantzis, CPA, PC
We are rocking and rolling through tax season these days at Ye Olde Pantzis Tax Shoppe. But I woke up Monday to the news that the federal government took in a record $1.08 trillion in taxes during the first quarter of their fiscal 2017 (which ran from Oct ’16 – Jan ’17).
That’s a lot of nickels.
And it reminded me of why we love what we do here — not because we take particular pleasure in seeing governmental coffers bulge, quite the opposite. We exist to help people like YOU pay their fair and legal share, but only their fair and legal share of taxes. The government doesn’t need you to give them any tips!
But far too many Brooklyn people end up doing so because they don’t have a skilled advocate in their corner, nor do they have someone who can help them navigate through the pile of forms to fill out (and know which ones NOT to fill out). It can be a confusing mess if you’re not skilled and practiced — but if you’ll pardon the horn-tooting, we are, and we love the opportunity to serve.
And speaking of tax money, those who have already filed their taxes and claimed the Earned Income Credit (EIC) or the Additional Child Tax Credit (ACTC) have had their refunds held back because of congressional action. The VERY good news is that the IRS says they will start processing those refunds on February 15th — though the IRS did say in a statement that “these refunds likely will not start arriving in bank accounts or on debit cards until the week of Feb. 27.”
The best way to check the status of your refund is the “Where’s My Refund?” tool on IRS.gov: https://www.irs.gov/refunds Hopefully we’ll see some movement on that front for our clients, and soon. But you never should expect things to move fast, unfortunately.
So, that business aside … it’s been a relatively smooth tax season for the most part. We love getting the chance to see our clients, and having all the catch-up conversations we haven’t had throughout the year. And “tax time” is the perfect time for you to get other, long-delayed financial tasks accomplished. One of these is the sometimes-dreaded estate plan. This is something which every family should have in place, and so I’ve got some further thoughts on that for you in this week’s Note…
Start The Estate Planning Process During Tax Season by James Pantzis
“Arriving at one goal is the starting point to another.” -John Dewey
Most of us spend a considerable amount of time and energy in our lives working for our families and accumulating wealth.
But unless you’re careful, much of it could go to waste.
That’s why a well-crafted estate plan is so critical. It ensures that your hard-earned wealth (including intangible, non-financial assets) can pass intact to those you intend to be your beneficiaries, instead of being siphoned off to government processes and bureaucrats, or even being lost. We all dislike handing over our resources to those who don’t have our best interests in mind.
A well-made estate plan guarantees that this will NEVER happen to your family.
“But, what happens if I don’t create an estate plan? Doesn’t the judicial system have easy steps in place for families?”
Yep, and it’s called “probate” (Latin for “prove the will”), and it’s an ugly process.
You see, “probate” guarantees government interference in how you transfer your estate (however large or small). Documents must be filed, and approval must be received from a court to pay your bills, pay your spouse an allowance, and account for your property. Oh, and even worse — it all takes place in the public’s view.
If you fail to plan your estate, not only do you lose the opportunity to protect your family from an impersonal, complex governmental process (that is a burden at best), but it’s slapped across the public domain for all to see.
Then, of course … there’s taxes. You think the government is incentivized to keep those low on your behalf? There’s a variety of solutions for each family’s particular situation, but the plain fact is that working without a plan is U-G-L-Y no matter how you slice it.
When it comes right down to it, planning is a gift for your family (the people you love most), because if you don’t take care of things while you are living and able, they’ll have a mess to clean up when you are gone.
Even more, if you have children, you want to establish the proper (legal) procedure for ensuring they’re taken care of properly.
So if these issues are important to you (and I believe they are), make your tax preparation appointment with us count twice, and we can set you up with information about how to get the estate planning process started right.
To your family’s lasting financial and emotional peace…
James Pantzis, CPA, PC
Whatever you might think about the New England Patriots, it’s nearly impossible not to respect their prowess on the football field. And there are plenty of storylines we can all take away from that epic game:
* Apparently it’s a good year to be a man with a foreign-model wife, with a sketchy history with the rules and who is written off by nearly everyone …
* Or maybe it was about the completion of the ultimate scrappy underdog story (remember, Tom Brady was the 199th pick in the draft, despite his current hero-status) …
* Or, for the commercial-watchers out there, we learned many things: cleaning the house turns regular Joe’s into muscular, computer-animated hunks, Justin Bieber likes to dance, all of us should appreciate each other’s differences, pursue our dreams no matter what, etc.
Sports is a diversion, entertainment. But it also tells a story. And I hope that if you’re feeling like life has knocked you to the mat, that you can find the strength to get back up. Even when nearly everyone (perhaps even yourself) has written you off.
And, of course, the commercials also wanted to teach us that artificial intelligence software is going to help bored, big-chain tax preparers with your taxes. Or they wanted to teach us that we can sit on a wall and do our own taxes with our smartphone (and fall off in the process).
Sure … you can try to go one of those routes.
But I’m hoping you see the value of having a real, well-trained professional in your corner.
Well, next week happens to contain Valentine’s Day. And just because I’m a tax professional, doesn’t mean I won’t offer dating advice. 😉
(Even if it is coming from a compulsive penny-pincher like me. But maybe that’s a good thing for you.)
A Brooklyn Tax Professional’s Valentine’s Day Plan
“Love keeps the cold out better than a cloak.” – Henry Wadsworth Longfellow
With all of the turmoil in our nation, it’s a good idea to save money wherever possible. Anything can happen.
Truth be told, of course — I’m usually in favor of saving money no MATTER the occasion, which is part of why we’re so ruthless on behalf of our clients.
With Valentine’s Day coming up (Tuesday the 14th), I thought I’d help my Brooklyn clients and friends make some romance magic, but do it in a way that saves them cash. Yes, America — you can still be romantic on a budget.
With that in mind, here are some ideas to jumpstart your Valentine’s Day plan.
Of course, I should add a disclaimer: “Results not guaranteed.”
So, instead of the tired old “flowers, candy and chocolate” [boring!], here are a few of my favorite modest (and occasionally tongue-in-cheek) suggestions for a sizzling Valentine’s … one that won’t torch your wallet!
The Video Greeting: With all of the the video tools out there these days, it’s never been simpler to create a heartfelt message of love for your sweetie. Then, post it to YouTube, Facebook, Instagram, SnapFace or whatever other platform you choose! Um, just be sure to make that video setting to “private” unless you want to share with the world your undying love for your honey (hopefully with all your clothes on).
The Hopeless Singer/Artist Method: I hear this one works well. Even if you can’t sing, your valentine will give you kudos for the effort. (Ask me how I know about that one.) You could step it up by writing an original song and then sing it. Or, for the slightly-less courageous, you could pull a page out of John Cusack’s book in Say Anything and hold a boombox (or smartphone) above your head and blare Peter Gabriel’s “In Your Eyes”. That seemed to work.
Not a singer? More of a writer? Or artist? For the otherwise artistically inclined:
– You could pen a poem on nice paper
– or even paint it
– You can paint a picture of your honey. Just be sure it looks good.
And, of course, you can COMBINE the previous two suggestions for even more romance sizzle.
The Surprise Mid-Day Outing: Surprise your love with a ‘picnic’ in the park, at the beach, or any other outdoor nature spot. If the weather isn’t ideal for outdoors, you could bring the outdoors inside — find a fake palm tree, flowers, sand, beach umbrella, radio, towels (borrow them). Nothing says “I love you” like fake palm trees.
Write a Message To Be “Stumbled Upon”: Well, perhaps not *literally* stumbled upon, but try a nice outdoor surprise. With snow outside, you could stomp out the message and fill in the letters with spray paint or flower petals or rocks. Without snow, you can use sidewalk chalk to write a message to your sweetie.
Wait a minute, you say? I should stick to taxes?
James Pantzis, CPA, PC
The world is awash in shouting these days. Can you feel it?
It’s tax season, and so I’m not spending much time in Facebook, but I know for a fact that there is a lot of anger, frustration and noise about politics. So much so that it seems everywhere you turn these days somebody is agitating over something.
Can I give some unsolicited advice? Tune out.
Yes, everyone is saying that we need to listen to each other, and there is a great deal of truth in that. But in my opinion, the voices we MOST need to listen to are the ones sleeping under our own roofs. The ones we hear on a regular basis — through our actual ears, not just in “virtual land”. The ones that should matter most to us.
Perhaps also the ones who can help you save a boatload on your taxes? Ahem. (Well alright, perhaps that one is a tad self-serving. But really though.)
It’s time to focus on what we are each called to do with our valuable hours. Last time I checked, you weren’t getting paid to inform your friends of the newest, most-reliable, political opinion. You probably aren’t changing many hearts online by pointing out problems. You might in fact just be adding to somebody else’s noise.
Yes, the world is divided and broken. So let’s take a breath, extend grace, and buckle down to the work of each of us moving our specific worlds forward, with excellence and kindness abounding.
And speaking of excellence abounding, can we have a conversation about the tax preparation process? I’ve been doing this long enough to know what it is that makes the process feel good for my Brooklyn clients. It’s the mark we continue to shoot for, and I’d like you to know about how we see our work…
What To Look For In a Brooklyn Tax Professional
“Celebrate what you want to see more of.” -Tom Peters
Unfortunately, with the way that most tax professionals and CPA’s present themselves to the world, it seems like we’re all the same. We all seem to offer the same services, for pretty similar fees. If I weren’t working every day in this industry, I’m pretty sure I would think that all accountants and CPA’s were the same.
Nothing could be further from the truth.
You see, each tax professional does have certain qualifications. Some might be experts at this sort of tax law, or in working with farmers or with getting money back through IRS representation, or a whole variety of different things … but are they really providing what you, the consumer, wants?
What do you want from a tax preparer?
When I sit down and talk with Brooklyn regular families, here’s what I discover:
You want to be able to work with a caring professional — NOT one of those “cattle call” shops, where you’re squeezed in with a bunch of other people, and seen by harried, poorly-trained employees who just completed a basic tax course.
You want an accurately-filed tax return. You want the whole thing broken down in terms that you understand, and in a way that you don’t need a translator to communicate. You want there to be processes in place to ensure that the most money is kept out of the grasping hands of Uncle Sam, and in your wallet (legally).
You want a heads up about future ways you can legally add deductions and make sure that you can get even more money back in the future. You want assurances everything your tax preparer is doing for you is valid and correct, so a guarantee(s) is essential to the process.
And of course, you want it done fast. Look, I know this is a big deal for consumers. You don’t want your accountant pushing back at you all the time, saying “give me more time”, when you know it’s not because they’re working hard on your behalf, but that they’re so poorly organized that they’re not getting ANYONE’S work done on time.
Oh, and if you ARE getting a refund, you want a tax firm who can get you the most money back, and soon … with the most options available.
Here’s the bottom line: You want professionalism, accuracy, you want clarity, you want to be aware of beneficial tax options, you want peace of mind, you want an efficient use of YOUR time. And at the end of the day, you want to KNOW you got the most money back from the Treasury AND that the IRS will stay off your back so you can sleep like a baby at night.
If the accountant or tax professional you are talking to can’t do these things, you need to call one that can.
James Pantzis, CPA, PC
The Super Bowl teams are set, the new President is inaugurated … why does it feel like things are still going so fast?
Perhaps, for me and my team, it’s because we finally are able to submit tax returns to the IRS (they began receiving them on Monday the 23rd). But it’s also just the time of year when there seems to be a LOT of noise, especially when it comes to taxes.
It’s our job to cut through the noise of the burdensome pile of forms and regulations which form our tax process. Yes, some people get paid to create tasty food, others to patrol our streets, and we? Well, we put out financial and regulatory fires.
And it can be a lot of fun — really! There are stories every year, which circulate around our office, about the grateful client who was utterly hopeless about their financial and tax situation … until they met with us, we crunched their forms and numbers, and not only gave them the nice news of a lower tax bill (or higher refund) than they expected — but that we were able to speak life into the overall situation of their finances.
But for some strange reason, many taxpayers STILL choose to “go it alone” when it comes to preparing their returns.
Well, far be it from me to have such hardy souls be left in the dark. While what I’m writing this week may seem “professionally risky”, we are sincere about wanting everyone in the Brooklyn local area to pay the least amount possible in income to taxes.
So, even though it might encourage some people towards the risks of software-powered self-preparation, instead of our cost-effective, quick-but-meticulous services … here is a list of the most common errors I see when I review self-prepared returns.
(Warning: There’s no “app” for experience.)
Common Tax Return Errors To Avoid For Brooklyn Self-Preparers
“Arriving at one goal is the starting point to another.” -John Dewey
As all of your information is coming into your mailbox or being uploaded to your online accounts this month to prepare for your taxes (Doctor’s bills, 1095’s, 1099’s, old W-2’s, interest statements for student loans, etc.), it can be tempting (to some, at least) to forego the perceived “expense” of using a professional to help you save on your taxes for the year.
If for some reason you decide to go down that lonely road, please do at least watch out for these common errors (which we routinely correct for those who have us review their previous-year returns):
* Filing the wrong status (dependent or independent, 0 instead of 1, etc.)
* Missing forms
* Forgetting to sign it (this is incredibly common! Make SURE you sign!)
* Not adhering to new laws (a biggie)
* (or perhaps worse) Not taking advantage of deductions or credits from new laws
* Math errors or mixing up numbers
* Standardized deduction (one lump sum) when itemizing may return more
* Forgetting earned interest
* Not claiming your charitable donations (more common than you’d think!)
* Incorrect social security numbers
* Missing the deadlines
* Not checking last year’s taxes to see if anything carries over (again, very common — and a good reason to have a pro check it out)
* Not taking deductions where they’re pertinent (IRA’s, too much Social Security being taken out)
* Failing to include dependents who don’t live with you
* Claiming someone as a dependent who claimed themselves as independent
* Not filing domestic or self-employment taxes
* Not claiming credits where they’re due (Child Tax Credit, Earned Income Credit)
So what can you do to correct all of these errors?
1) Double check. And triple check. Then check again. The idea here is that when another pair of eyes look at it, they can see stuff you don’t. Your mind will tell you that things that you write or calculate are correct, even if they aren’t.
2) Go to a professional. Self-serving? Why, yes. But as I mentioned in my introduction, we get paid to know what we do, and following the tax code permutations is our J-O-B. We’ve seen so many tax returns, even already this year, that what would take you 12 hours — can be accomplished by me and my practiced team in one.
I’m not suggesting we never make mistakes … but can you really afford to skimp when thousands are on the line?
James Pantzis, CPA, PC
I have to first get this off my chest, before we get to the orders of business for today.
A Brooklyn friend who was watching football the other day asked me about a commercial he saw from a “popular” tax chain (who shall remain nameless) that is heavily advertising “free” tax preparation.
Leaving aside the fact that it is only for those who file the absolute SIMPLEST of returns, allow me to let you behind the curtain a little…
One of OUR big revenue centers over the years has always been in fixing the tax preparation mistakes made by these “big box” retail tax outfits and off-the-shelf software programs, and discovering loads of missed opportunities and overpayments made by their clients.
Yes, you might be getting something “free”, but please: don’t be seduced by the siren call of getting something for nothing. You usually end up paying for it, in a whole host of ways.
(Because, speaking of software: do you remember when a former Treasury Secretary used the leading tax software to do HIS taxes, unintentionally created a bunch of errors with it, and then blamed the software itself for all of his tax problems in front of the Senate? Not an uncommon issue, I’m afraid.)
The old adage *is* an adage because it’s so often true: you get what you pay for. It’s the foundation for a stable economic system because it’s almost always true.
Admittedly, this is highly self-serving. But I wouldn’t share it if it wasn’t also serving you.
Alright … moving forward now. Some quick items:
1) The start of actual tax filing will not begin until January 23, 2017. This does NOT mean that we can’t begin the preparation process earlier (we can, if you really have your paperwork in order), but it does mean that the IRS won’t be issuing refunds or otherwise officially accepting returns until that point.
2) Would you do me a favor? Would you leave us a review on Yelp or Google Maps for other potential clients to see? We have found that these sources can be so helpful for people evaluating their options, and we would love to have as much information there as possible. Thank you!
Lastly, and before I get to my quick word for the day, I have included a special incentive for you at the end of this note … check it out!
I’ve given you a bunch of “orders of business” today, and so I wanted to simply tell you a story here, in my note. Would love your thoughts…
James Pantzis’ Rule From The Successful
“Act as if what you do makes a difference. It does.” -William James
Warren Buffett is known to be a generous man. Just a few years ago, of course, he made the biggest single contribution to philanthropy ever made — including an enormous bequest to the Bill and Melinda Gates Foundation (erstwhile rivals on the Forbes rich list).
But it’s also common knowledge that Buffet is generous in other aspects of life as well.
And speaking of Forbes, I read a story in it about Buffett and an MBA student from Kazakhstan. This student attended a function at which Buffett was present but left his camera in the Berkshire Hathaway boardroom. The student wanted some pictures of himself with Buffett — and so, true to his form, Buffett offered to give the student a ride back himself to the office to pick up the camera.
During the drive, Buffett offered some advice to the young man. Do what you love, he told him. He also revealed to the student that his personal goal was not to live like a king, and that he liked living a fairly simple life, eating simple meals and driving a regular car.
It was then that Buffett offered this nugget of wisdom: “Be a nice person … It’s so simple that it’s almost too obvious to notice. Look around at people you like. Isn’t it a logical assumption that if you like traits in other people, then other people would like you if you developed those same traits?”
So I ask you: if this advice was the first thing which rolled off of Warren Buffett’s lips when speaking to a fresh-faced MBA student, what would YOU say to just such a student?
And, of course, if this advice represented part of the essence of why Buffett is so successful (well, that plus preternatural stock market understanding), how can you integrate his advice into your life this week?
Something great to ponder. And, as we head into the busyness of tax season, I wanted to remind you: we’re here to help. Let me know if you have any questions.
James Pantzis, CPA, PC