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Author: Wennejunk Three stars, 500 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121144  
Subject: Corporate tax Question Date: 3/4/2009 10:08 AM
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We've used a local CPA for tax preparation for the last few years and last year they bumped our rates way up and haven't contacted us for this year's files.

I recognize that as a strategy in paring your customer base to those who are most profitable and that's fine - I understand that, no problem. There are others around who are closer, less expensive and just as good for our business.

However, our business is fairly simple and I am considering just doing the taxes myself using Turbotax for Corporations.

I would appreciate any input from others who have done this as well as feedback as to whether self preparation and filing increases the chances of an audit.

I have nothing to fear from an audit, but if I have to drop what I'm doing to prep for an audit, its not worth the $600 I save doing the taxes myself.

If you are a CPA and respond, please identify yourself as such so I'll know where you are coming from on this.

Thanks,

Tom
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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 104943 of 121144
Subject: Re: Corporate tax Question Date: 3/4/2009 11:16 AM
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We've used a local CPA for tax preparation for the last few years and last year they bumped our rates way up and haven't contacted us for this year's files. I recognize that as a strategy in paring your customer base to those who are most profitable and that's fine - I understand that, no problem. There are others around who are closer, less expensive and just as good for our business.


I'm a CPA. I think you have a communications problem. They haven't contacted you for this year's files? Why haven't you contacted them? Any CPA firm that's any good is too busy these days to be begging you to get your work to them.

Yes, some people do raise fees to weed out the less profitable jobs. But depending on the client and the job, the lowest total fee may still be profitable. And sometimes, the big clients pay big fees, but you have to sweat blood, and earn every dime of it.

It's also true that costs have gone up in this business ever since Sarbanes-Oxley, and not just the SEC end of the business. Tougher auditing and accounting standards mean more time to complete a job, and that has translated into higher salaries for accountants. Good accounting students are like football players - they can negotiate a signing bonus. Malpractice insurance rates have gone up, too, with more restrictions and questionnaires imposed by insurers. And those costs get passed onto the client.


However, our business is fairly simple and I am considering just doing the taxes myself using Turbotax for Corporations. I would appreciate any input from others who have done this as well as feedback as to whether self preparation and filing increases the chances of an audit. I have nothing to fear from an audit, but if I have to drop what I'm doing to prep for an audit, its not worth the $600 I save doing the taxes myself.


You lost my sympathy there. If they've raised your fees "way up", to $600, you were paying a rock-bottom price before. You say your return s "fairly simple". Maybe it is, but how good are your records? Even if they're clear as crystal, I would think it's very hard to get a corporate return done by a CPA for less than $600 in today's market, unless somebody's doing you a real favor. If it's true, as you say, that "There are others around who are closer, less expensive and just as good for our business," then by all means call them. But it's getting a little late to file without an extension.

I don't have a real opinion as to whether a CPA doing the return reduces the likelihood of an IRS audit. I sort of think so, but their actual selection process is secret.

Corporate returns are due March 16. I say call your CPA today. If you dash out and buy the TurboTax business package today, and get it loaded and updated, you're in for a do-it-yourself training program the next two weeks, with a deadline looming.

Bill

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Author: edcosoft Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 104944 of 121144
Subject: Re: Corporate tax Question Date: 3/4/2009 12:07 PM
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I am NOT a CPA and actually have never filed a C-corp return (but have done many simple S-corp and 1041s). If your return is "fairly simple" why don't you try it alone, even without TT? Probably all the forms and entries are the same as from last year (except different amounts), so get out last year's return and see how your CPA did it. Trying to follow TT might be a problem for a beginner but after you have modified last year's return for this year's values, then use TT to check your figures and see how TT could simplify your work next year.

good luck

ed

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Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 104946 of 121144
Subject: Re: Corporate tax Question Date: 3/4/2009 4:02 PM
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I am NOT a CPA and actually have never filed a C-corp return (but have done many simple S-corp and 1041s). If your return is "fairly simple" why don't you try it alone, even without TT? Probably all the forms and entries are the same as from last year (except different amounts), so get out last year's return and see how your CPA did it. Trying to follow TT might be a problem for a beginner but after you have modified last year's return for this year's values, then use TT to check your figures and see how TT could simplify your work next year.

I'm not a CPA but spent my career in corporate accounting and have done a lot of taxes. I think this suggestion might work but will take a LOT of time. To be sure exactly what's included in the numbers on each line from last year you'll have to reconstruct last year's return from the raw data. Then you still have to do this year's return. And you still can't be sure you didn't miss something or were not aware of some change in tax law.

$600 for a corporate return isn't bad. I know individuals with fairly simple personal returns plus a living trust who pay far more.

If your CPA has always called in the past and didn't this year that could simply mean he's especially busy this year. Or maybe he has a new assistant who forgot to remind him to call. Give him a call and ask politely if he's still interested in doing your return. You can always say you know it's small and won't be offended if he'd prefer you go elsewhere. But I wouldn't tackle it yourself at this late date. Better to have it done by a pro and then investigate what it would take for you to do it yourself next year.

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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 104947 of 121144
Subject: Re: Corporate tax Question Date: 3/4/2009 4:14 PM
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$600 for a corporate return isn't bad. I know individuals with fairly simple personal returns plus a living trust who pay far more.

While I realize "simple" means different things to different people, using my definition (Schedules A, B & stock/bond/MF D) if this is a pass-through trust they're getting ripped off bigtime. If we're talking about a 1040 with Schedule C and a 1041 for the trust, that's a different matter.

Phil

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 104948 of 121144
Subject: Re: Corporate tax Question Date: 3/4/2009 4:40 PM
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While I realize "simple" means different things to different people, using my definition (Schedules A, B & stock/bond/MF D) if this is a pass-through trust they're getting ripped off bigtime. If we're talking about a 1040 with Schedule C and a 1041 for the trust, that's a different matter.

Phil

======================================
A Schedule D can take 2 minutes or 2 days.

Bill

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Author: Wennejunk Three stars, 500 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 104949 of 121144
Subject: Re: Corporate tax Question Date: 3/4/2009 4:46 PM
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Hey Bill,

First of all, thanks for actually answering my question as to audits!

Secondly, thanks for the gentle slap around you gave me. I re-read my post and I'm sure it came across reasonably snotty, especially to a CPA professional. That wasn't my intent, of course, but perception equals reality...so I was snotty.

This CPA more or less came with the company when we took over. We stayed with them based on the previous owner's recommendation as we had many other issues to work on and the pricing was reasonable.

For the last 4 years, we were billed a flat $500 for taxes, last year they bumped it to ~$750 (the $600 I mentioned was the delta between tax software and their pricing), something I found upon receiving the invoice.

I know this is also a reasonable rate in the grand scheme of things, but it was an unforecast extra expense and an irritant at the time.

In years past, my contact always initiated communication in late December with an end of year reminder email. It was something I came to expect and also something appreciated as my attention was usually elsewhere (as it has been this year until last week)

Given that their clientele is primarily much larger businesses and high net worth individuals, their location is in the high-rent part of town, the atypical lack of contact and the large price change...I figured they were paring their client list to the most profitable. I could be wrong, I am fairly often.

I may contact them anyway after I file the extension or search for another CPA or try it myself. All is still up in the air and I was mostly trying to get a feel for practicality of alternatives.

Filing an extension is not a problem for us and we will have no tax due.

My comment regarding less expensive was an assumption - I've done no research. You're response was useful to help me realize their pricing, even after the change, was not out of line.

Let me close by saying (in case there was any doubt) I have the highest regard for CPA's in general and the firm I have worked with in particular (even if they 'bumped me' &%$&!). You have reinforced that impression by your measured comments.

Thanks,

Tom

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Author: Wennejunk Three stars, 500 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 104950 of 121144
Subject: Re: Corporate tax Question Date: 3/4/2009 5:01 PM
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Billjam and Ed,

Thanks for the suggestions. Our return was an 1120 with no extra schedules with revenues and expenses very similar to last year, we could do it, just have to take the time.

- and I don't mind investing the time to learn. I think its important to know what goes into the preparation of taxes, even if someone else ultimately does it for you.

Mostly i just wanted input on whether having a CPA prepare the company's taxes had any beneficial effect beyond that of knowing more about the topic than I did and therefore more likely to be accurate.

I received some feedback on that question from the other Bill.

Thanks,

Tom

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 104956 of 121144
Subject: Re: Corporate tax Question Date: 3/4/2009 9:18 PM
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(Don:)..thanks for the gentle slap around you gave me. I re-read my post and I'm sure it came across reasonably snotty, especially to a CPA professional. That wasn't my intent, of course, but perception equals reality...so I was snotty.


Now, I didn't say that. And I wasn't trying to slap you.
But you're welcome. I'm glad you took it in the spirit intended.

OK, you mentioned elsewhere you have a 1120 without too many wrinkles.
So it's not an 1120S where you have other shareholders who will scream for K-1s, and you don't mind and extension. So if doing TurboTax really intrigues you, go for it.

And I can see that a raise in fees from $500--->$750 in one year is a large percentage increase, they might just be making up for past year's lack of an increase, too.

Consider one other thing, though. As a business owner, your time must be worth something to you. By the time you've bought, installed and updated your TurboTax program, and gotten up to speed on the corporate package, along with the boredom and frustration that will come with it, the time and aggravation will easily hit that $750 figure, in my opinion.

Bill

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Author: bookie71 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 104969 of 121144
Subject: Re: Corporate tax Question Date: 3/5/2009 11:21 AM
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Four years without an increase in fees. You should see what has happened to salaries in the CPA profession and the difficulty of getting good help.

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Author: Wennejunk Three stars, 500 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 105087 of 121144
Subject: Re: Corporate tax Question Date: 3/10/2009 8:55 PM
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As a business owner, your time must be worth something to you.

Yep, absolutely. This is another factor in the mix. The only real net benefit is actually knowing what goes into the forms so I can understand in the future if a question arises.

Thanks again,

Tom

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