Leaderboard

I high jacked a thread last week (apologies to NECPA) with ranting about a client that was requesting financial statements when the previous one was not paid. Time does fly when we are having fun! The unpaid audited financials was for the 2012 year that did not get billed until 2014. Well the client had his meeting with the State on Monday and I received this via email today: Good Afternoon Ron, we just finished our state inspection, apparently our financials aren't good enough for them we need an audit for 2013 by june first and another one for 2014 by the end of 2015. can you please let me know what I owe you for the last one that I have an outstanding bill on and I will pay that off in the next 2 months and we can get started then on the 2013? Huh - imagine that!

There has been so much mis-information floating around about these things. I can honestly state, that for awhile, I was also under the impression, like Pacun, that the maximum penalty was $95 per person. Then I heard it was $95 per month per person. Then I heard that there was a !% issue. I believe I do now truly do have a handle on the rules. I have been through a couple of returns with varying issues and have had to walk through the worksheets next to the rules. I am starting to get it. It is for the reasons exemplified here that I rarely talk much (out loud) about these things until I have the opportunity to put a pencil to the paper. Why? At the risk of repeating myself , because there is an overabundance of mis-information out there. By the end of the next 30 days, we will ALL be experts on this - but we all need to exercise patience with our fellow practitioners until everyone gets up to speed.

OK; I have gone absolutely around in circles here. I've been through CPE on this and I thought it made sense, but this "simple" one has me completely stumped. I have several small businesses that have NO assets that were not fully depreciated years ago. Neither do they own any real property. So there is no question of a 481(a) adjustment needed. All they have is unwritten (now written, but for years not) rules that under $200 or $500 (depending on which business) they expense and do not capitalize. Printers and small tools and office equipment, generally, of the type that dies in a couple years and is then replaced with the latest cheap version. Or do they really mean it when the revproc says "does not apply" to businesses where "...(iii) Amounts paid or incurred to which the taxpayer has elected to apply the de minimis safe harbor under § 1.263(a)-1(f);" -- but then what happens to the rule of thumb that *every* business needs this form? What if all we want is to formally state using the de minimus safe harbor? What do I put on the 3115 then? Some options I have seen proposed for line 1a: "De minimus rule per Sec. 1.263(a)-(1)(f)" "All codes 184-193 per new regs" "arglefraster conforming with new splotnik regs" and for the final question.... laser print it on paper, or print out a blank and fill it in with a quill dipped in my own blood?

Jack, cut it out. These type of statements are not helping!!! We have tax preparers here with a lot of experience that are asking questions about the law, and now even asking for help with how to fill out the forms and worksheets, and some of those answers are found right in the instructions to these new forms. We need to help each other, not beat each other up.

Yup.....26.2 miles....Why? I don't really know...But The Columbus Marathon will be my next life challenge....assuming I get past this tax season!

Actually, this client pays me very well (with the exception of this special project, which obviously will be paid). And he is bringing on another business that will pay me equally as well. So between the two of them I should net about $20,000 per year in fees and they are relatively low stress. I would gladly take 20 more just like them.

I can only speak for myself (of course). But at this point I'm checking the ACA forum more frequently due to the new changes & also because it is a smaller forum. Actually I'm more worried about the repair reg rules than the ACA. Granted it affects a fewer number of clients, but the new repair reg rules are much more confusing (to me) and there seems to be so many contradictions in methods. I'm glad to see some of these posts pinned. Personally, I wouldn't mind a separate forum for the repair regs, but understand that we don't want to have too many separate forums. Just my 2 cents.

Buying tax advice is like buying oats. For a reasonable price I can provide good quality oats. On the other hand, if price is your only concern, then you are free to go somewhere else, pay less, and risk getting oats that have already been through the horse. Your call.

My gut reaction would be that if he donated it to the charitable organization and they let him stay in it while on-site (and anyone else that needed to stay in it) and it stays with the charitable organization, you might have an argument. But if he takes it with him and it is his and his alone to do with what he wants, I might think you could use a % of it, but that, in my opinion, would still be a very big stretch. I would need to do some serious research to come up with a different answer.

Take a just-under-seven-minute break and watch this gorgeous kinetic sculpture at the Singapore Airport.

Four forms last year.............Seven forms this year.......... Why is your price higher this year??? We've been coming to you for three years..... We may have to look elsewhere next year........ I think it's time to retire...

January 27, 2015 By Mary Ellen Biery A common mistake among retailers is selling based on price rather than on value, a retail industry consultant wrote recently. When retailers focus on price, it results in customers “cherry-picking the best item while avoiding the profit-filled add-ons,” said The Retail Doctor founder Bob Phibbs. “It’s like they go to the bargain matinee but never visit the concession stand.” Accountants who yield to real or perceived pricing pressure would do well to remember his comparison during meetings in the coming months with their tax or audit clients. Granted, your accounting and consulting services probably aren’t overpriced the way movie popcorn is. Nevertheless, just like retailers, many accountants are frustrated by pricing pressure on compliance-driven services and the resulting hit to the bottom line. Indeed, a poll by Sageworks during a recent webinar found that many accountants don’t set fees at levels they want, primarily because they believe clients won’t pay up, or they worry that others will charge less and take the client. Like retailers, however, accounting firms have important control over whether clients select only compliance-driven services, which are typically lower margin. And they can take steps to prevent prices for those services and others from being pressured even lower. Resist Discounts Phibbs advises retailers to resist using discounts as a first resort. Discounting attracts “dirt-scratchers who will only show up for the discount,” he says. Similarly, accountants may be tempted to jump into a price-cutting discussion when clients or prospects express concern about the cost of tax or audit services. Focusing on price devalues your services and sets you up for a race to the bottom. Gaining or retaining a customer only because your price was cheaper can set the tone for future upselling efforts, and falling prices generally create the need for more volume in order to cover expenses. With less time per client to provide quality services, your business with existing clients may suffer—or at least fail to flourish. And you’ll probably have less time to go after clients who need the services your firm would like to grow, such as business valuations, industry-specific strategic planning or litigation support. Rely on Value Selling When retailers sell the value of the product rather than the price, they shift buyer fixation away from the money coming out of their wallet, Phibbs notes. In order to sell the value, sales staff need skills and knowledge—not just an intimate knowledge of individual products, but also the ability to understand and listen for buyer motivations. In the same way, accountants who embrace value selling can help clients clearly see how the services meet their unique needs and how the accountant is expertly positioned to assist them. Accountants who understand what their clients need even before the clients do and who listen for clues that clients may be ready to address the need can more easily illustrate how the firm’s services can help. If your firm is providing only compliance-driven services, consider adding a few advisory services that will meet the growing needs of your clients. Value selling, by the way, is different from value pricing, though they’re both based on the idea that the value provided to the customer is what matters most. Value pricing is an increasingly popular strategy of setting prices based on the overall perceived value to the customer instead of billing at the end of the engagement by tallying up the hours worked by partners, junior associates and administrative assistants. Value selling is a strategy for having a solid understanding of the firm’s menu of services and keeping client discussions focused on the long-term benefits of these services, as opposed to the cost of them. Make Valued Services the Star of the Show Another point to consider is whether your accounting firm’s emphasis on compliance-related services is preventing clients from recognizing and seeking the advisory services you might be trying to grow. Services such as financial planning and business valuations can deepen relationships with existing clients, provide opportunities to provide new services to them, and attract more of the clients most coveted: those who pay on time and can afford to pay more for valued services. But if all your clients and prospects hear about are your basic accounting services, those may be all they seek from you. Accountants can cross-sell more services this year by differentiating their services (such as through industry niches) and by pointedly educating tax and audit clients about additional, value-added assistance and how it meets their needs. To use Phibbs’ analogy, you can’t expect a moviegoer to visit the concession stand if they can’t smell the popcorn or see people lining up for candy and drinks. To learn more about how accountants can resist a focus on pricing, download a worksheet with tips on making the most of your year-end engagements with clients, “Tax season prep: A worksheet for client meetings.” Or listen to a webinar recording, “Upgrade Your Practice: Top ways to attract and retain higher paying clients in 2015.” Mary Ellen Biery is a research specialist for Sageworks, a financial information company that provides financial analysis and industry benchmarking solutions to accounting firms.

You have 2 issues here. You have the cost basis from when they bought the house and land, and the depreciable basis from when they transferred the home to a rental. If those 2 amounts are the same, and I would suggest they should not be, the disposition is simple. If you don't have the land on the fixed asset schedule, put it on and do a bulk disposition. Everything will flow through the software. If there was a difference between the cost and the depreciable basis, because when it was put into rental status, the value was less than the cost, then you need to make an adjustment to the basis to get the proper amount of gain on the sale to flow through. Tom Newark, CA

I think the mileage to and from is deductible charitable mileage at 14 cents a mile. Might pay for 1/2 of the cost of the gas. Everything else I would pass on. Just my 2 cents. Tom Newark, Ca

I'll bet #14 will sail through without any questions. That's a catch-all big enough to drive a truck through.

Not so fast there mi amigo Jack: From IRS.GOV You may deduct a charitable contribution made to, or for the use of, any of the following organizations that otherwise are qualified under section 170(c ) of the Internal Revenue Code: A state or United States possession (or political subdivision thereof), or the United States or the District of Columbia, if made exclusively for public purposes; A community chest, corporation, trust, fund, or foundation, organized or created in the United States or its possessions, or under the laws of the United States, any state, the District of Columbia or any possession of the United States, and organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals; A church, synagogue, or other religious organization; A war veterans' organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions; A nonprofit volunteer fire company; A civil defense organization created under federal, state, or local law (this includes unreimbursed expenses of civil defense volunteers that are directly connected with and solely attributable to their volunteer services); A domestic fraternal society, operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes; A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt. Not saying the present case is deductible - but not not deductible because it does not involve a 501(c )(3). (PS - I love double negatives.)

I say NO charitable deduction. The organizations mentioned are not 501(c )(3) organizations. No direct donation of money or items are involved.

The interest on a loan might be deductible as mortgage interest on a second home. The only expenses that would count as charitable, I would think , would be those incurred solely while he was performing the charity work. For example, if he has to pay for waste disposal while living in the RV in a remote site, then maybe. Property taxes? I would think not because they are the cover the entire year whether he is using the RV or not. But I have not done any research either - although I think that rfassett and I are on the same page with this.

And when they do, their price goes UP -- and yet somehow then they don't complain. They have learned that "going cheap" always costs WAY more.

Set the land up as a separate asset and do a bulk disposition. Add selling costs on the disposition screen.

I tell my clients it is a PENALTY TAX. The 9 clowns in black gowns called it a tax, and that is now the law of the land. Tom Newark, CA

There are some downloadable flowcharts here that may be useful: http://mcgladrey.com/content/mcgladrey/en_US/what-we-do/services/tax/new-flowcharts-provide-clarity-on-the-final-tangible-property-re.html

^ that. You already found that the solution is to print to pdf if you choose to duplex those forms.

The program commands will override the printer settings. I print to .pdf for storage. Then before I close the .pdf, I send it to my printer with duplex command. Works every time. To the point of not allowing state forms to be duplexed, the representative here in Ohio tried to tell me that as well. Then I had him look at a paper form that the state would send out if requested. Guess what, it was double sided. He was very quiet after that. It is NOT my job to make the people who work at the tax agency have an easier job. If paper filing a state return, and their people are not smart enough to look at the back, or their scanners are so pathetic that they cannot handle it, that is NOT my problem. I rarely paper file any returns. But when I do, they are duplex printed.

Great. I've always had to lay off during tax season. Never ran a full marathon, a few halves years ago. Now just the 10K on Thanksgiving Day in Cincinnati. Been fairly consistent for 38 years.

Way to go, Bob! Columbus is a great course with great crowds. I ran as a coach a few years ago and might be there again this year. I will be running the Queen Bee Half the week before and the full Flying Pig next May. That would be my 8th and last (famous last words) full but hope to keep doing half courses. Are you training with a group or on your own? If on your own, do you have a schedule? Let me know if you would like one as I have several years from training groups. What is your goal? I have found that those runs during tax season are great stress relievers. As I work from home, I often would run during mid-day just to get out. Be careful on slippery routes. I fell 2 weeks ago on a 5 miler and ended up with a black eye from the black ice. Good luck even though luck has little to do with success. All the miles you put in will determine the outcome.

I signed up for the Psych marathon on USA Network. May follow it up with concentrating on the back of my eyelids. Good for you, Bob. The janitor life agrees with you, apparently.

We will be rooting for you both!

good for you bob!!!!!!! keep us posted! you can do it!!!!!!!!

I just signed for the Marathon that takes places on April 15th every year.

Way cool Elrod! I posted previously that we closed our office yesterday due to the road conditions. One of my more astute clients calls this morning to ask when we started celebrating Ground Hogs Day as a holiday! I love my clients! That got me to thinking...........

We are also running out of places to put the snow. The banks made by the snowblower are high enough that we can no longer blow over them for much of the driveway. Last time that happened, my husband went out with snowshoes to pack down the piles. Doesn't help that our driveway is bounded by stone walls, so we have to start off going above the level of the walls. It was bleepity bleep-bleep freaking fracking COLD out there with the wind blowing ice crystals back in my face!

Ha! My wife and I were out this morning trying to dig out our plow truck that got stuck. I looked over at her and asked if she thought we had got the 10 inches of snow that was predicted. She was standing in snow that was nearly waste deep. (She is 5'4") I think we got a surplus. Digging to no avail, after two hours we decided to call a bigger plow and a tow truck. All is good now. I am a little poorer, but at least I can traverse our 2,000 foot driveway. A friend is coming over tonight to help me put the snow blower on my 2720 John Deere. We are rapidly running out of space for the plow to put the snow.

Just in case anyone is worried about cbslee's post, it is from Nichols Patrick's FREE Hot Topics section. Thanks for sharing it, cb.