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Tax pros do make mistakes
By Timothy Watson
I read an article about mistakes on tax returns a couple of weeks ago. http://www.marketwatch.com/News/Story/paid-preparers-returns-rife-mistakes/story.aspx?g...
Let me start off by saying that taxes should be a year round concern for you, especially with the economy how it is right now. Keeping up with your tax situation can save you hundreds, if not thousands, of dollars every year. I fall into the category of an unlicensed paid preparer. That said, every year my boss has a 12 week book course and an 8 week computer based course that everyone must pass. On top of that, during our downtime, our company has many, many training programs online that we must do. Also, I visit the IRS site on a daily basis and try to stay on top of the various changes, and I always download the Publication 17 PDF when it is released and study it. Even will all of this training, the tax code is complicated and even IRS agents get stuff wrong. I cannot speak for other preparers, but I strive to do a return as accurate as possible. We are only human though, and everyone makes mistakes. In my case, if someone comes into the office with a return I cannot do, I will call my boss and he will do the return himself. And even though he has more than 20 years experience doing taxes, he tells me he learns something new every day. For example, last year I had 1 brutal return. Now, I have prepared over 500 returns, and some have been really tough, but nothing I can't handle. I can't recall the exact details, but they had deductions not normally seen. They came into the office very well prepared. I got 2 hours in to doing the return and had to call my boss for help, and it took him another 3 hours. I did miss a deduction, other than that, what I had done was correct. Also, they were New York residents but stay here in the winter, so I also had to do a NY state return. I'm in Florida, so it is rare that we do state returns, but we can do them. So a correct return was filed for them. I wrote an earlier post on why it is important to be prepared for your tax preparer. To help insure that a correct return is filed, you need to have your tax records. If your not sure you need something, bring it anyway. I don't want to miss a deduction or a tax credit that can benefit you. Trust me, I want to prepare the best tax return I can for you. I will dig through all of your papers to find a tax deduction for you that otherwise might be missed. Your tax preparer should do the same. When I first started doing taxes 4 years ago, I was told that if you give 10 different people a fairly complicated return to do, you will get 10 different answers. I would say it holds true, to a point. During our practice problems, everyone got different figures compared to the correct return. Not to brag, but I was usually correct the first time. And I found one of the problems to be wrong, because whoever in corporate did the return flat out missed a Section 179 deduction. I had a different return last year where the client had her tax return prepared by a competitor the previous 2 years. Well, they were done wrong, and she has to file an amended return for those years. The mistakes cost her a couple of grand in refunds for those 2 years. The mistake was about depreciation, and IMO, it was a mistake that should not have been made. It was basic stuff. We earned her business. Also, it helps to know the for yourself the basic deductions if you going to itemize. 2 years ago, I had a potential client come into the office and ask about writing off his business suites and dry cleaning for them. He was a big guy and a little intimidating, and I still told him no, that is not a legal deduction. He made an appointment anyway for a few days later and never showed up. Sorry, I don't do illegal deductions. Now, a UPS or Postal Service uniform, or scrubs for hospital workers, uniforms like these are tax deductible, provided you paid for them and are not reimbursed by your employer. I always practice due diligence in preparing a tax return. I can not stress this enough: Do not listen to tax advice given to you, unless if that person prepares taxes every tax season. I have had many clients come in who were given the wrong information from family, a friend or co-worker. But then I will find a deduction for them they did not know about. I have a happy client who will come back to us. -----------
Tim Watson is a tax preparer in Florida. Visit his tax blog at http://www.downpaymentblues.net/taxguide.
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