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FAQ's

What is an accountant?
  It's a matter of WHY they are non-credentialed. Is it because they can't pass the exam? Have they tried? Can they do it? There's obviously a difference between NCAs who can't pass any of the exams, NCAs who have passed the exams but didn't bother getting a license, and NCAs who used to practice more actively but are now "retired" because they prefer to take life easier.

Tax planning or tax compliance? It depends. Most of a typical NCA's experience will probably be in tax compliance. What a NCA knows is pretty much dictated by their experience and their personal drive to learn.

NCAs can be very good. It takes guts (or ignorance) and a heck of a lot of perseverance to go out there and make it without any sort of credential. They've either proven they can do it and dropped the credential after building up a client base, or just sort of wandered into the profession after years of experience.

Or, they could just be NCAs because they can't pass the exams. You can't really tell unless you ask, but can you trust the answers?


What is an Certified Public Accountant (CPA)?
  Is someone required to be a CPA to be an accountant anyway? No.

The only real difference (for a client, practically speaking, besides the ethics stuff) between a CPA and an EA when it comes to taxes is that a CPA can legally sign off on audits as to whether standard accounting practices have been implemented consistently and correctly. This is called an attestation. CPAs are valued for being an impartial attesting party.

Also, the four parts of the CPA exam are REG (regulations), AUD (audit & attest), FAR (financial accounting & reporting), and BEC (business environment and concepts). Please not that there is not a part consistently of tax law although it is contained with some of the sections.

Less than 25% of what you need to know to be a CPA is tax. Just like lawyers specialize, accountants do too. That said, the CPA credential has come to be shorthand for "accountant". Like EA's, CPAs are permitted to practice before the IRS.

While we're here, let me point out that after you get a credential, you have to get continuing professional education (CPE) to maintain said credential. CPAs need 120 hours every three years, but that 120 hours can be in pretty much anything. (Though they do need to do 2 hours of ethics every year.) Most CPAs will probably do a tax updates CPE course, but it's not required. A CPA can choose to do zero tax and be just fine.


What are the difference between an EA, CPA and an Accountant?
  An EA has to pass a set of exams and do CPE to maintain their license. However, there are three main differences:

» The EA exam is 100% taxes. The EA Exam is the Special Enrollment Exam (SEE). Part 1 deals with individuals, Part 2 with businesses, and Part 3 with rules and regulations
» EA CPE must be tax-related (with the exception of 2 hours a year in ethics.) 72 hours every 3 years, this works out to 24 hours a year. Most EAs are part of the NAEA (National Association of Enrolled Agents), which mandates 30 hours of CPE per calendar year. All of it in tax (okay, yes, less 2 hours of ethics.)
» As aren't required to know GAAP. (Many do, anyway, because the obvious synergy between bookkeeping and taxes is really hard to ignore. An EA doing business on their own usually has some sort of bookkeeping license or experience.)


EAs are trained in tax compliance: it is the be-all and end-all of their existence. Many EAs are former IRS agents (Not Me) (formally IRS agents can get an EA license without taking the exam after working 5 years in the IRS.) Some EAs are accountants who decided to take the EA exam instead of the CPA exam because they aren't interested in audit/attest work. These accountants are usually comparable to a CPA in terms of knowledge. In fact, within the Big Four, the EA is an acceptable substitute for the CPA within the tax branches of the firms.


Where are my Federal/Missouri/ Illinois refund(s)?
  Federal :You can check on your federal refund by going to www.irs.gov/Refunds
They will need 3 pieces of information: Security Number, or Individual Taxpayer Identification Number, Filing Status, and exact refund amount.
  Missouri :You can check your Missouri refund by going to www.dor.mo.gov. Check my Income tax return or refund. They will need 3 pieces of information: Security Number, or Individual Taxpayer Identification Number, Filing Status, and exact
  Illinois :You can check your refund by going to www.tax.illinois.gov


Is there an age limit on claiming my child as a dependent?
  To claim your child as your dependent, you child must meet the qualifying child test or the qualifying relative test. To meet the qualifying child test, your child must be younger than you and as of the end of the calendar year, either be younger than 19 years old or be a student and younger than 24 years old.
  There is no age limit on claiming your child as a dependent if the child meets the qualifying relative test.
As long as you meet ALL of the following tests, you may claim dependency exemption for your child:
1. Qualifying Child or qualifying relative test
2. Dependent taxpayer test
3. Citizen or resident test
4. Joint return test.

How much does an unmarried dependent student have to make before he or she has to file an income tax return?
  If you are an unmarried dependent student, you must file a tax return if your earned and/or unearned income exceeds certain limits. Even if you do not have to file, you should file a federal income tax return if you can get money back.

Can I receive a tax refund if I am currently making payments under an installment agreement or payment plan for a prior year's federal taxes ?
  No. A condition of your installment agreement is that the IRS will automatically apply any refund due to you against taxes you owe.

»  Because your refund is not applied toward your regular monthly payment, you must continue making
    your installment agreement payments as scheduled and in full.

»  Regardless whether you are participating in an installment agreement or other payment arrangement
    with the IRS, you may not get all of your refund if you owe certain past-due amounts, such as federal tax,
    state tax, a student loan, or child support.

To qualify for head of household filing status, do I have to claim my child as a dependent?
  In certain circumstances, you do not have to claim your child as a dependent to qualify for head of household filing status; for example, a custodial parent may be able to claim head of household filing status even if he or she released a claim to exemption for the child.

What should I do if I made a mistake on my federal return that I have already filed?
  It depends on the type of mistake that was made:

»  Many mathematical errors are caught during the processing of the tax return and corrected by the IRS,
    so you may not need to correct these mistakes.

»   If you did not attach a required schedule or form, the IRS will contact you and ask for the missing information.

»   If you did not claim the correct filing status or you need to change your income, deductions or credits,
     we can help you file an amended or corrected return.

What do I do if I haven't filed my Tax Return(s)?
  Regardless of your reason for not filing a required return, file your tax return as soon as possible, to avoid any further penalties incurred from the IRS. Call us to set an appointment; we would love to help you with ANY problems.

What do I need to bring to show proof that I had health care coverage the past year?
  Under the Affordable Care Act, you are now required to have qualifying health care coverage for each month of the year, qualify for the coverage exemption, or make a shared responsibility payment when filing your federal income tax returns. IRS policy is for all paid tax preparers to perform due diligence. This includes verifying all taxpayers, spouses and any individual that taxpayer claims as a dependent have qualifying health care coverage (Minimum essential coverage). In lieu of providing Alliance Tax proof of coverage, we will ask you to sign our due diligence form that verifies of your qualifying health care coverage.

Minimum essential coverage is a health care plan or arrangement specifically identified in the law as minimum essential coverage, including:
 
 
» Employer-Sponsored coverage, COBRA coverage and retiree coverage.
» Coverage through the Exchange.
» Health insurance you purchase from an insurance company directly.
» Medicare Part A coverage, Medicare advantage plans, Most Medicaid coverage.
» Children's Health Insurance Program (CHIP) coverage.
» Certain types of Tricare coverage under chapter 55 of title 10 of the United States Code.
» Coverage provided by the Peace Corps Volunteers.
» Coverage under the Department of Defense.
» Refugee Medical Assistance supported by the Administration for Children and Families.
» Health coverage provided through a student health plan that is self-funded by a university (only for a plan year beginning on or before December 31, 2014, unless recognized as minimum essential coverage by HHS)
» State high-risk health insurance pools for plan or policy years that begin on or before December 31, 2014.

What documents do I need to bring to file my tax return?
  Current Clients:
 
 
» W-2 Forms
» 1099 Forms
» Receipts- Make sure you have documentation for every charitable contribution you made, whether it is a cancelled check, statements from your church, bank or credit cards, or acknowledgment letters from organizations to which you've given money or goods. The documentation should include your name, the dates and the amounts are listed.
» 1095 A, B or C Forms- These forms show proof of health insurance. An exemption certificate number (ECN) will be required if you applied for a health care exemption in the Marketplace.
» 1098 Forms
» K-1 Forms (Income from a partnership, small business, or trust.
» IRA contributions
» Lottery or gambling winnings/losses
» Income and expenses from rentals
» Alimony paid or received
» Medical and Dental expenses
» Real estate and personal property taxes
» Job-related educational expenses
» Child care expenses and provider information
» Casualty or theft losses
» Tuition and Education Fees (1098-T) / Student loan interest(1098-E)
» Estimated Taxes or foreign taxes paid
» State or local taxes paid
» Professional & Union dues
» Uniform & Job supplies
» Automobile expenses (if used for deductible activities, such as business or charity)
» Travel expenses (business purposes only)
  Current Clients:
 
» Bring all forms listed in Current Clients
» Copies of last year's Tax return
» Driver's license(s) and Social Security Card(s) for everyone on the tax return

If I'm unable to file my return by the deadline, what should I do?
  If you are unable to file your return by the deadline, please call and let us know and we can file an extension for you. Filing an extension give you extra time to get your paperwork together for the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by the tax deadline, plus you may owe penalties.

What should I do if I receive a letter from the IRS?
  If you receive a letter from the IRS, we ask that you provide us with a copy of the letter for a tax preparer to overlook. It can be faxed, emailed or dropped off at our office.

How long should I keep my tax records/returns?
  The IRS advises that taxpayers keep their tax records for 3 to 7 years. Please examine the following chart provided.
1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
2. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
4. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
5. Keep records indefinitely if you do not file a return.
6. Keep records indefinitely if you file a fraudulent return.
7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.



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