| 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.
|
| What is the Annual Filing Season Program (AFSP)? |
| |
The Annual Filing Season Program aims to recognize the efforts of non-credentialed return preparers who aspire to a higher level of professionalism. Those who choose to participae can meet the requirements by obtaining 18 hours of continuing education, including a six hour federal tax identification number (PTIN) for the upcoming year and consent to adhere to the obligations in Circular 230, Subpart B and Section 10.51.
Upon completion of these requirements, the return preparer received an Annual Filiing Season Program - Record of Completion from the IRS.
Annual Filing Season Program participants are included in a public database of return preparers on the IRS website. The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications includes the name, city, state, ZIP Code, and credentials of all attornerys, CPAs, enrolled agaents, enrolled retirement plan agents and enrolled actuaries with a valid PTIN, as well as all Annual Filing Season Program - Record of Completion holders. |
| 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 for Healthcare? |
| |
If you or anyone in your household enrolled in a health plan through the Health Insurance Marketplace, you'll get Form 1095-A, Health Insurance Marketplace Statement.
You will get this form from the Marketplace, not the IRS.
You will use the information from the Form 1095-A to calculate the amount of your premium tax credit. You will also use this form to reconcile advance payments of the premium tax credit made on your behalf with the premium tax credit you are claiming on your tax return.
The Form 1095-A will tell you the dates of coverage, total amount of the monthly premiums for your insurance plan, the second lowest cost silver plan premium that you may use to determine the amount of your premium tax credit, and amounts of advance payments of the premium tax credit.
|
| 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, Health Insurance marketplace statement. |
| » |
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 |
| » |
Automobile expenses (if
used for deductible activities, such as business or charity) |
| » |
Travel expenses (business
purposes only) |
|
|
| |
New
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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