Here are the answers to some of the most Frequently Asked Questions our firm receives.
A. The information found on this website is general in nature and may not apply to the reader’s situation. Therefore, the reader should not rely on the information on this website alone. For specific advise, please call us at 404-897-5503. Thank you.
Q. What services do you provide?
A. We prepare all tax returns including individual, corporation, LLC and LLP, non-profit, estate and trust, partnership, payroll, sales tax, property tax, and other taxes. We also provide incorporation services and consultation in choosing the right business entity as well as bookkeeping services.
Q. What is a reasonable wage for S corporation owners. (11-12-02)
A. Ideally, the best way to set pay is to use an amount comparable to an individual being paid similar rate in your industry. Otherwise, I use a standard rule of 50\50. Basically, 50% of income available to owners should be taken as wages and the other 50% should be taken as dividends.
Q. Which items qualify for a cafeteria plan deduction? (11-15-02)
A. The main items consist of Qualified dependent care costs, disability income * accidental insurance, group-term life, dental, & health insurance premium costs, and medical cost not covered by insurance. Any unused amounts in a particular category are lost by the employee and reverts to employer by the end of the plan year
Q. Do I need to visit your office to have my taxes prepared?
A. It is not necessary to visit our office. Many clients utilize the mail or express services to send their information to us. For new clients, we encourage a meeting so that we can discuss your unique tax situation.
Q. How do colleges calculate student financial aid?
A. Colleges calculate student financial aid awards by calculating the college’s cost of attendance (COA) and then subtracting the expected family contribution (EFC). Any remaining amount may be funded with financial aid. Other considerations are how early the financial aid application is filed and the particular school’s available financial aid resources.
Q. What size clients do you accept?
A. We accept any clients within our service range. If the engagement is very large, we will accept it if we feel we have the staff to handle it. If we don’t have the appropriate staff, we may form an alliance with another CPA firm and perform a joint engagement. There is no account too small to be considered important in our office.
Q. Can I deduct student loan interest?
A. Since personal interest is generally non-deductible must meet several tests: You must be the person liable on the debt and the loan must be for education only. Your income can’t exceed $130,000 on a joint return or $65,000 on a single return; married couple filing separately can’t deduct. You can’t deduct if you’re claimed as a dependent.
Q. Can I ever save tax by filing a separate return instead of jointly with my spouse?
A. You sometimes may benefit from filing separately instead of jointly. Consider filing separately if you meet the following criteria: One spouse has large medical expenses, miscellaneous itemized deductions, or casualty losses. The spouses’ incomes are about equal. Separate filing may benefit such couples because the adjusted gross income “floors” for taking the listed deductions will be computed separately.
Q. How do you charge for your services and how does your cost compare to other tax preparation firms?
A. We charge by the hour. We can give you a quotation of our expected costs. When providing our services, if we can help you reduce our time, we will tell you how. Our support, such as our tax organizer, is designed to offer professional, fast, and accurate services and to minimize our charges to you. Our overhead is kept low to allow us to pass our cost savings onto our clients. Our charges are normally less than other quality firms.
Q. Do you work with Start-up Companies?
A. Yes! Many of our clients are just starting in business. We will lead you through the necessary governmental forms. Through our networking, we can also assist in finding you other necessary professionals to deal with (lawyers, insurance agents, mortgage brokers, etc.) throughout the state.
Q. I want to start a new business. Can you tell me which type of business I should form?
A. Yes. When setting up a new business, it is crucial to set up the right type of business, such as corporation, S corporation, limited liability company, limited liability partnership, partnership, sole proprietorship, etc. Our consulting services will help you form the right type of business based on your unique situation with consideration given to liability issues and tax advantages.
Q. How are Limited Liability Companies (LLCs) taxed?
A. A single-owner LLC defaults to being taxed as a Sole Proprietorship. Income/loss from the LLC is reported on the owners personal income tax return. A multi-member LLC defaults to being taxed as a Partnership. A Partnership tax return must be filed. The profit or loss is then reported on the owners personal tax return. Any LLC can elect to be taxed as a corporation. To do so, one must file an election within 75 days of creating the LLC.
Q. Is there any non-tax record that I should keep?
A. There are other records you should keep, even though they don’t appear to have any use for your tax returns. Family documents, certain medical records, insurance policies, records of major purchases, are just a few examples. These documents will be needed in the case of any emergency that may arise.
Q. Should I keep my old tax returns? If so, for how long?
A. Yes, you should keep your old tax returns for at least 7 years. When a return contains information pertaining to the basis of property owned, it should be kept until that property is sold. One of the benefits of keeping your tax returns from year to year is that you can look at last years return while preparing this years. If you do throw out an old return you may fill out form 4506, Request for Copy or Transcript of Tax Form, and send it to the IRS service center where you filed your return.
Q. What pieces of paper do I need to keep in order to do my taxes?
A. Keep detailed records of your income, expenses, and any other information you report on your tax return. A good set of records can help you save money when you do your taxes and will be a trusty ally in case you are audited.
Q. How do I know when certain taxes are due?
A. You can give us a call or check out the Due Date Calendar on this website.
Q. What is the annual gift tax exclusion?
A. The annual exclusion is $11,000 for 2002 and 2003, per donee, with an annual maximum of $22,000 per donee applicable to spouses who utilize gift splitting. Additionally, there is an unlimited exclusion for payments of tuition and medical expenses.
Q. When should I give you my tax information?
A. You should bring all your information in as soon as you have it all together. The sooner you bring it in to us the better chance we have at making sure we’ve done the best possible job for you.
Q. What do I need to do to start a new business?
A. Typically, most people will go to their lawyer first, get the business set up and then contact an accountant. We would rather that you contact us at the beginning. There are many different kinds of companies and we can help you select the best one for the kind of company that you will be setting up. Then we will continue to help you with payroll, tax returns, monthly accounting, financial statements to whatever degree you need.
Q. Are QuickBooks or Peachtree good products?
A. QuickBooks and Peachtree can help you with your small business accounting, but they can not think for you. The software has to be set up properly from the beginning or you will have problems. We find that by setting it up yourself, it can cost you more in accounting fees because it takes longer for us to resolve those errors. We advise that if you are going to use one of these products you have your accountant help you set it up. We can help you with this process.
Q. By using QuickBooks Pro, can I reduce my fees?
A. Our experience shows us that if you know something about accounting AND your computer software is set up properly from the beginning, it is possible that we don’t need to spend as much time on your accounting. But in some cases, the initial set up was not done properly and we end up spending more time ‘cleaning up’ the errors than if we had just entered the detail from the beginning.
Q. What are your fees?
A. Fees vary based upon the work being performed. For Tax work the rate is $125.00 per hour. For accounting work the rate is $100.00 per hour. For Bookkeeping the rate is $50 per hour. Individual tax returns start at $260.00. Business returns start at $375.00. Monthly or Quarterly accounting start at $100.00 per period. Of course the more work we perform or more complex the issue, the greater the price.
Q. Do you work with Start-up (new companies)?
A. Yes! Many of our clients are / were new entrepreneurs that are just starting in business. We will lead you through the necessary governmental forms. Through our area networking, we can also assist in finding you other necessary professionals to deal with. (lawyers, insurance agents, mortgage brokers).
Q. Do you offer free business consulations?
A. Yes, we offer a free hour consultation for businesses. The consulatation is to gather information about you and your business, while you find out more about us. We can usually answer a few questions at that time and determine if you have done the necessary registrations and filings. We request that you bring your last two income tax returns and financial statements (if any). Also bring anything else that you may have a question on.