It’s Tax Time – Don’t Wait Until the Last Minute to File

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You know tax season has begun when your mailbox contains W-2s, 1099s and lots of other tax-related documents needed for filing annual state and federal income tax returns.

While many of us dread preparing our taxes, it’s one of those necessary tasks that we have to get through every year. At least those receiving tax refunds have something to look forward to! But, there is some good tax news this year because the filing deadline has been extended for three days and you have until April 18, 2017 at midnight to get your taxes filed.

We don’t recommend you wait until the last minute, though. Filing early is highly recommended. One of the main reasons is to avoid identity theft. According to the Internal Revenue Service (IRS), identity theft has become a big problem and criminals file fraudulent tax returns and collect refunds in your name leaving you with a mess to clean up. Early filing will prevent this.

Starting early also gives you more time to prepare your returns so you can make sure they are accurate. Plus, you’ll get your refund earlier and if you do have to pay, you’ll have more time to plan for it.

Many wonder whether it’s better to prepare those tax forms themselves or hire a professional. It usually depends on how complicated your finances and returns are. Either way, there is some homework you’ll need to do to keep your stress level down and to complete your filing on time.

  1. Don’t wait until the last minute.
  2. Collect needed documents in advance.
  3. Review your documents to be sure you have everything you need and get what is missing.
  4. Determine if you’ll file online or by mail.
  5. Decide if you’ll prepare your tax returns yourself, use a computer tax program or have a tax preparer do it for you.
  6. Before choosing a professional, interview them over the phone or in person to verify their experience and ask any other questions you may have. Then, make an appointment and check their license and credentials.

According to the California Tax Education Council (CTEC) website, California professionals who can charge a fee to prepare tax returns must be licensed as an attorney or certified public accountant (CPA); or be a CTEC-registered tax preparer or an enrolled agent.

CTEC states that “choosing a tax preparer who is not one of those four professionals may prevent you from legal recourse against fraud. It may also increase your chances for additional taxes, interest and fines.”

Check the license

CPA: If you choose a CPA to prepare your taxes, the California Board of Accountancy (CBA) encourages you to check the status of a CPA’s license on their website. Or call the board at (916) 263-3680.  You can also find any public enforcement documents related to a California CPA here.

Attorney: To verify the license of an attorney, go to the California Bar Association website.

Tax Preparer and Enrolled Agent: To verify that a tax preparer or enrolled agent is certified, go the California Tax Education Council website.

Helpful Information

The CBA’s Consumer Assistance Booklet has helpful tax information and can be viewed here on their website.

If you need more information on your federal taxes, check the IRS website at www.irs.gov.

California tax information can be found  at the California Tax Service Center www.taxes.ca.gov and at the Franchise Tax Board website.

Take some time now to get those tax returns ready and avoid the headaches and stress of waiting until the last minute.

Beware of the Imposter IRS

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Inevitably, tax season comes, and with it some new form of scam to watch out for.

The Internal Revenue Service recently issued an alert to taxpayers and tax professionals to be on guard against fake emails purporting to contain an IRS tax bill related to the Affordable Care Act (ACA).

Generally, the scam involves an email that includes a fake CP2000—a notice commonly mailed to taxpayers through the U.S. Postal Service—as an attachment. In reality, this document is never sent as part of an email to taxpayers—the IRS does not initiate contact with taxpayers by email or through social media. Here are some other ways to spot the scam:

  • The CP2000 notice appears to be issued from an Austin, Texas, address
  • The tax issue is related to the ACA and the notice requests information regarding 2014 coverage
  • The payment voucher lists the letter number as 105C.

The fraudulent CP2000 notice includes a payment request for a check made out to “I.R.S.” be sent to the “Austin Processing Center” at a post office box address. This is in addition to a “payment” link within the email itself. Don’t do it!

Frequent fakes:

 The IRS website (www.irs.gov) lists some of the most prevalent IRS impersonation scams, which include:

  • Demanding payment for a “Federal Student Tax.”
  • Demanding immediate tax payment for taxes owed by paying with an iTunes or other type of gift card
  • Soliciting W-2 information from payroll and human resources professionals
  • Attempts to “verify” tax return information over the phone such as Social Security or bank account numbers
  • Pretending to be from the tax preparation industry

Remember, neither the IRS nor the California Franchise Tax Board (FTB) will ever:

  • Call and demand immediate payment and threaten arrest.
  • Call without giving consumers an opportunity to discuss a potential tax dispute.
  • Call and ask for your credit card numbers.
  • Call and ask for payment via pre-paid debit cards.

If you get a suspicious phone call from someone claiming to be from the IRS and asking for money or personal information, do not give out anything. Hang up immediately. You can always call the IRS directly at (800) 829-1040 if you think you owe taxes. FTB urges taxpayers to report any suspicious emails or phone calls received from tax scammers through its website at www.ftb.ca.gov, which also has additional fraud protection tips. FTB will contact a taxpayer by mail—often several times—prior to calling directly. FTB also uses an automated dialer program and a copy of that program’s message can be found on FTB’s website.

If you go with a pro:

California is one of the few states to have set requirements for professional tax preparers, according to the California Tax Education Council (CTEC). State law requires anyone who prepares tax returns for a fee to be either an attorney, certified public accountant (CPA), CTEC registered tax preparer (CRTP) or enrolled agent (EA). Choosing a tax preparer who is not one of those four professionals may prevent you from legal recourse against fraud. It may also increase your chances for additional taxes, interest and fines.

Always verify the legal status of a tax preparer before handing over your private tax information. To verify whether a person or firm is currently authorized to practice public accounting in California, check the license on the California Board of Accountancy’s website at www.dca.ca.gov/cba/ and visit its “Tax Resources” and “Consumer Assistance” sections for more information.

 

Consejos De Ultimo Minuto Para Preparar Su Declaración De Impuestos

shutterstock_93790930Se acerca el 15 de abril y si todavía no ha seleccionado un preparador de impuestos, aquí hay algunos consejos:

1. Obtenga recomendaciones de familiares y amigos

2. Revise la historia del preparador de impuestos con la autoridad apropiada:
La Junta California de Contabilidad para contadores públicos certificados y contadores públicos. http://www.cba.ca.gov

3. Es buena idea conocer en persona o por el teléfono al profesional de impuestos antes de preparar tus impuestos.

4. Otros Servicios
Muchas veces la primera relación del contribuyente con los contadores públicos certificados es a través del trabajo de preparar impuestos. Servicios adicionales pueden tener requisitos adicionales, tales como: revisión por pares y autoridad para firmar.

Consejos Finales:

  • Nunca firme una declaración en blanco.
  • No use un preparador de impuestos que se niega a firmar su declaración de impuestos o completar la información de preparador de impuestos requeridos.
  • Asegúrese de obtener una copia de su declaración de impuestos completa.
  • E-file (presentar su declaración de impuestos electrónicamente) y solicite un reembolso de depósito directo. Generalmente recibirá su reembolso más rápido y reduce la posibilidad de robo de identidad.
  • Su declaración federal de impuestos debe ser presentada antes de la medianoche el 15 de abril. Sin embargo, si necesita tiempo extra puede presentar IRS formulario 4868 antes del 15 de abril y retrasar la presentación de su declaración federal hasta el 15 de octubre. La extensión automática no demora el requisito que paga sus impuestos antes del 15 de abril y las sanciones podrían imponerse y pueden cobrar interés.

Last Minute Tax Preparation Tips

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The April 15 tax deadline is approaching, and if you haven’t yet selected a tax preparer, here are some tips from the California Board of Accountancy to help make a wise choice.

  • Get recommendations from family, friends, and others you trust who may have had similar tax preparation needs.
  • In California, the only individuals allowed to charge a fee for preparing taxes are
    Certified Public Accountants (CPAs), Public Accountants (PAs), Enrolled Agents (EAs), attorneys, and California registered tax preparers (CRTPs).
  • Only CPAs, EAs and attorneys have unlimited representation rights before the IRS and may represent their clients on any matters including audits, payment/collection issues, and appeals.
  • In addition to tax preparation, are you looking for an accountant to assist with financial planning, estate questions, IRS issues, or business planning?
  • Review the tax preparer’s history with the appropriate licensing authority. The Board of Accountancy for CPAs and PAs provides the public the ability to check the status of a license with “License Lookup” on its website, cba.ca.gov.
  • Check the California Tax Education Council (CTEC) for California registered tax preparers; the U.S. Department of the Treasury for enrolled agents; and the California Bar Association for attorneys.
  • Meet the tax professional: Because you will be trusting someone with your financial information, being comfortable with them is important. Interview them, preferably in person, but at the very least, by phone.

WHAT TO ASK A PREPARER

  • What type of tax work do they typically perform?
  • What office hours does he/she or the firm keep? Are available to take phone inquiries?
  • What type of continuing education have they recently completed? It is important to select a CPA who has completed continuing education consistent with the type of services you are selecting.
  • Has the tax preparer been disciplined?
  • Does he/she carry professional liability insurance? This helps protect consumers in the event a claim is made for damages arising from a tax preparer’s failure to perform tax or other services satisfactorily.
  • If you hire a CPA, ask for an engagement letter that details who will be performing the work, confirms that all personal information is secure and won’t be disclosed without your permission, and specifies the cost of the services.
  • Ask about fees. Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can. Always make sure any refund due is sent to you or deposited into your bank account, not the preparer’s.
  • Ask about anything on your tax return you don’t understand, and review all information before you sign your tax return: name, address, Social Security numbers, or other tax identification numbers. Even if a professional is preparing your taxes, you are responsible for what is on your return.

IMPORTANT ADVICE

  • Never sign a blank return. Don’t use a tax preparer that asks you to sign a blank tax form.
  • Don’t use a tax preparer that refuses to sign your tax return or complete the required tax preparer information.
  • Be certain to get a copy of your completed return.
  • E-file and request a direct deposit refund. You will generally receive your refund much more quickly, and it reduces the chance of identity theft.
  • If you need extra time, you can file IRS Form 4868 by April 15 and delay filing your federal return until October 15. However, getting the automatic extension does not delay the requirement that you pay your taxes by April 15, and penalties could be imposed and interest charged on taxes not paid by the deadline.

 

Consejos Para Preparar Su Declaración De Impuestos

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Se acerca el 15 de abril y si todavía no ha seleccionado un preparador de impuestos, aquí hay algunos consejos:

1. Obtenga recomendaciones de familiares y amigos

2. Revise la historia del preparador de impuestos con la autoridad apropiada:
La Junta California de Contabilidad para contadores públicos certificados y contadores públicos. http://www.cba.ca.gov

3. Es buena idea conocer en persona o por el teléfono al profesional de impuestos antes de preparar tus impuestos.

4. Otros Servicios
Muchas veces la primera relación del contribuyente con los contadores públicos certificados es a través del trabajo de preparar impuestos. Servicios adicionales pueden tener requisitos adicionales, tales como: revisión por pares y autoridad para firmar.

Consejos Finales:

  • Nunca firme una declaración en blanco.
  • No use un preparador de impuestos que se niega a firmar su declaración de impuestos o completar la información de preparador de impuestos requeridos.
  • Asegúrese de obtener una copia de su declaración de impuestos completa.
  • E-file (presentar su declaración de impuestos electrónicamente) y solicite un reembolso de depósito directo. Generalmente recibirá su reembolso más rápido y reduce la posibilidad de robo de identidad.
  • Su declaración federal de impuestos debe ser presentada antes de la medianoche el 15 de abril. Sin embargo, si necesita tiempo extra puede presentar IRS formulario 4868 antes del 15 de abril y retrasar la presentación de su declaración federal hasta el 15 de octubre. La extensión automática no demora el requisito que paga sus impuestos antes del 15 de abril y las sanciones podrían imponerse y pueden cobrar interés.

 

 

Tax Time Tips

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Tax Time Tips

April 15 is approaching and if you haven’t yet selected a tax preparer, here are some helpful tips to assist in making this very important hire.

1. Get recommendations from family and friends
Ask for recommendations from those who you trust and may have had similar tax preparation needs. Here are some considerations:

• In California, the only individuals allowed to charge a fee for preparing taxes are
Certified Public Accountants (CPAs), Public Accountants (PAs), Enrolled Agents (EAs), attorneys, and California Registered Tax Preparers (CRTPs).

• Only CPAs, EAs and attorneys have unlimited representation rights before the IRS and may represent their clients on any matters including audits, payment/collection issues, and appeals.

• In addition to tax preparation, are you looking for an accountant to assist with financial planning, estate issues, IRS issues or business planning?

2. Review the tax preparer’s history with the appropriate licensing authority:

• The California Board of Accountancy for CPAs and PAs, which provides the public the ability to check the status of a CPA license with License Lookup on its website, http://www.cba.ca.gov

• The California Tax Education Council (CTEC) for California Registered Tax Preparers

• The U.S. Department of the Treasury for Enrolled Agents

• The California Bar Association for attorneys

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