Here’s a topic we know everyone’s overjoyed to talk about: tax season!
While not everybody’s favorite time of year, our annual tallying of gains and losses and deductions and credits is, however, inevitable, and for quite a few of us, inevitably frustrating. Since we have longstanding tax pros as East Nashville neighbors — the folks at Advanced Tax & Income Services over on Forrest Avenue — we figured now would be a good time to tap their brains, while those W2s and 1099s are still fresh from our mailboxes.
Scott Stone, EA CFS at Advanced (that means enrolled agent and certified fund specialist, which means he knows a thing or 30 about this stuff), was kind enough to answer some pressing tax-time questions as he and his team digs into their busy season:
Advanced Tax & Income Services’ Scott Stone, Cecil Stone, Houston Reasonover and William Wallace
The East Nashvillian: A lot of people struggle with whether to turn to a professional or do their returns themselves. Are there any guidelines that you see that can help people know which avenue to take?
Scott Stone: “Many people should be filing their return themselves, using any of the free-file options available to them. However, many people who are filing their returns themselves shouldn't be, as they may not understand a question being asked of them, or the potential outcome, positive or negative, of answering a question incorrectly.
“Every year after the tax filing season ends, we help out a substantial number of taxpayers who have received IRS correspondence proposing changes to a self-filed return. The free-file companies also want taxpayers to think that with an Internet connection, they can prepare any return with no problems, similar to a home improvement store whose motto is, ‘You can do it, and we can help.’”
Are there more common mistakes/missed opportunities that you’ve seen people making with their tax returns?
“The most common mistakes we see with free-file returns are with capital gains and losses from the disposition of stocks, bonds and mutual funds, the sales tax deduction, and dependent care benefits. Keypunch errors often generate IRS correspondence, since the IRS cross-matches each return with the corresponding documents received from employers, banks, mortgage companies, etc.”
Are there new things for 2014 — changes in the tax code, Affordable Care Act twists — that we should be making sure we’re aware of?
“The ‘Bush tax cuts’ as they are commonly referred to were again extended this year, just as they have been for many years. Therefore, the basic return as it affects the majority of taxpayers hasn't changed, with the exception of the Affordable Care Act. The ACA will impact every return filed, with the exception of dependents' returns. It could be as simple as a checkbox, or could be extremely complicated with additional forms and penalties.”
What kinds of things can we do to make doing our taxes more painless — whether it’s ways to organize info better, making sure we’re keeping better track of certain things, filing early?
“Organization is key, especially if you are self-employed, have rental property, claim business miles on your auto, etc., whether you file your own return or not. Knowing the tax laws as they impact you is great if you prepare your own return, otherwise a good tax professional’s job is to play detective, and search out those expenses that you might not otherwise think of.”
Most of us complain endlessly about having to do taxes. You do it day in, day out. Do you think you’re uniquely equipped to like the process, or to find the fun in crunching all these complicated numbers?
“Since we are all wired differently, I think that what one person enjoys doing, whether for a living or for pleasure, can vary differently for us all. If all I did all day long was deal with numbers, then yes, I would probably be as bored as people think I am. Once you factor the human element into the equation, it becomes a very interesting, and very rewarding job, knowing that I have helped someone out to the best of my abilities.
“I often compare myself to a bartender... once the finances hit the desk, everything else comes out with it. This allows me to build not just a business relationship with my clients, but also a personal relationship. They become like my extended family, and we're more apt to help a relative than we are a total stranger.”
Need to dig a little deeper or inclined to get a tax detective on your side? Learn more/reach out via the Advanced Tax & Income Services website.