How To Choose A Tax Preparer

Most tax return preparers are professional, honest and provide excellent service to their clients. However, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients. Therefore, it’s important to find a qualified tax professional. Here are 8 rules for seperating the honest tax preparer from the dishonest tax preparer.

1. Check the person’s qualifications Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
2. Check on the preparer’s history Check to see if the preparer has any questionable history with the Better Business Bureau, check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for attorneys; and the Office of Professional Responsibility for enrolled agents.
3. Find out about their service fees Avoid preparers that base their fee on a percentage of the amount of your refund or those who claim they can obtain larger refunds than other preparers.
4. Make sure the tax preparer is accessible Make sure you will be able to contact the tax preparer after the return has been filed, even after April 15, in case questions arise.
5. Provide all records and receipts needed to prepare your return Most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.
6. Never sign a blank return Avoid tax preparers that ask you to sign a blank tax form.
7. Review the entire return before signing it Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
8. Make sure the preparer signs the form A paid preparer must sign the return as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. The preparer must also give you a copy of the return.

2009 Profesional Tax Software Choices Part 1

"'In this world nothing can be said to be certain, except death and taxes." – quote by Benjamin Franklin in a letter to Jean-Baptiste Leroy in 1789, (re-printed in The Works of Benjamin Franklin, 1817)



Here we are again with another tax season and asking ourselves the following questions about our tax software? Are we using the “right” package for our needs? Are we getting the most value from our investment in Tax Preparation Software? What would it take for me to consider changing from my current tax software? Would I recommend my tax software to other tax professionals? Do I know what are my alternatives? What do I like about my tax software? What do I dislike about my tax software?



Drake Software offers an all-inclusive package regularly, $1,395 (currently web-listed as $1,295) with early season discount prices as low as $995. The package includes all individual and business federal tax returns - 1040, 1040NR, 1041, 1065, 1120, 1120H, 1120S, 706,709, 990, and 990PF - as well as all state returns. It also includes their tax planner, write-up, client status manager, document manager, bank software, electronic filing, technical support, network version, preparer Web site, and paperless office capabilities. They also offer a client write-up package that includes everything except their client write-up package. The pay-per-return option allows you to prepare up to 15 federal and state returns for $285, and additional returns cost $19 each.
The price is small, but the power of the package is impressive. Screens and helps are available in Spanish, for your Spanish speaking preparers or clients, but printed tax forms are all in English. Auto entry features include a Zip Code database that automatically fills in the city and state after you enter the zip code, and an EIN database that retains and fills in provider's information when the EIN is entered.


Drake Software's client base is an even mix between one to two man shops, to CPA firms, to large multi-sites. If the firm's hardware meets the Drake Software minimum requirements there is no limitation on the amount of users and returns it can support.



The Intuit ProLine Lacerte is for mid-sized and larger practices, as well as smaller firms with more complex client needs. The program offers preparation and electronic filing for all major tax entity types, along with all states and municipal entities. The system is offered modularly, with practices selecting the entity types and state support they require. Pricing for the Federal individual package is $2,699 and $429 per state, with add-on available for unlimited electronic filing ($995), networking ($570 for the first 4, $280 for each additional 4), tax analyzer ($465 of which 25% is the annual maintenance fee which is all you pay in future years), tax planner ($665 of which 25% is the annual maintenance fee which is all you pay in future years) and other productivity tools including applications for trial balance, document management, and tax research. The Intuit ProLine Lacerte system is also offered in a pay-per-use format, for lower-volume firms with a $395 license fee, $36 for federal and 1 state and a $4 electronic filing fee. Once the Pay-per-Return fee is paid separate business, trust, estate, and gift taxes may also be purchased.



Lacerte integrates with QuickBooks, Intuit's Document Management System, Tax Planner, EasyACCT, and BNA Tax Planner, Forms Library, Tax Research, Tax Analyzer, Trial Balance Utility, Lacerte e-Organizer.



The Intuit ProSeries is offered as a complete package or as a pay-per-return option, ProSeries Professional is easily adaptable to fit your office needs. Directed toward the small to medium sized accounting firm that might also provide other accounting services, Intuit allow you to buy as much (or as little) tax power as you need. One license of ProSeries tax software covers everyone in one company and location (multiple installations, networking is an add-on), via Webprice $1299, regularly $1399. This package includes unlimited individual returns for federal and state, and no license fee for Pay-Per-Return for business return. The PowerTax Library, priced at $4449, includes: the federal individual (100+ forms and schedules); state individual (45 States and Local forms); federal business forms 1120, 1120s, 1065, 1041, and 990; state business forms 1120, 1120s, 1065, 1041, and 990; Gift and Estate forms 709 and 706; and ProSeries add-on solutions Client Organizer and Fixed Asset Manager. Add-on packages include Network Solutions for $475, ProSeries DMS (Document Management System) for $450, Client Organizer for $229, Fixed Asset Manager for $229. The Pay-Per-Return option fee is $225, plus $20 for each federal and $15 for each state return processed




ATX Max is a highly inclusive program that sells for $1,110 and includes all the tax forms and specialty forms needed for a small to medium accounting practice. This package includes 1040 and related forms plus all state and local individual income tax forms, electronic filing where supported, 1041, 1120 1120S, 1065, 706, 709, 990, 5500, registrations and elections and more. Training and online CCH U.S. Master Tax Guide and CCH 1040 Express Answers are included with the ATX Max package.
One thing that really sets the ATX packages apart is their over 10,000 federal, state, and local forms, including the hard-to-find local tax forms. With ATX, tax practitioners no longer have to find and fill out by hand less common local tax forms, they are already included in the tax package. CCH Small Firm Services knows that not all small tax firms are looking for the same solution. They have packages that start as low at $410 that include all of the federal 1040 forms and supporting schedules, up to 3 states, $200 unlimited electronic filing, or individually priced e-filing for $3 federal and $2 per state state, and free training. They also offer a small firm turnkey solution of their Total Tax & Accounting Office package for $2295 which includes everything from the ATX Max package plus ATX Fixed Asset Manager, ATX Trial Balance, ATX Document Manager, ATX Client Write-Up with Payroll, and CCH Express Answers for all of the included tax returns.

TaxWise offers different groupings of their tax software so that they are price accessible to the various sized firms that are looking for the services their product offers. TaxWise is targeted for the accounting firm that is looking to grow and wants to position itself in an efficient manner with a complete business solution that is fully integrated and streamlined.
The ProFiling Package is $1084 for all federal individual and state and local forms, $1 Per federal and $.50 per state for electronic filing. The Power package at $2395 includes 1120, 1120s, 1065, 1041, 706, 709, 990 and 5500as well as unlimited e-filing, and free networking within the same office. They also offer an Executive package that includes all 1040 forms, 1120, 1120S, and 1065, 3 states each for individual and business returns, and $2 federal, $1 state electronic filing for $1335. The Complete Tax and Accounting package includes their complete line of individual, corporate, partnership, business, and specialty forms and schedules, all states and electronic filing, trial balance, fixed asset, document manager, and research software for $3265. TaxWise includes as much power as you could need, depending on the package you purchase. Free orientation sessions, customer support, and the online CCH U.S. Master Tax Guide (included in the Executive, Power, and Complete packages) make this a complete solution for a growing professional accounting firm.

Tax Tips On The HomeBuyer Tax Credit

Here are the 9 things you should know about the expanded credit and the qualifications you must meet in order to qualify for it.

1. You must buy – or enter into a binding contract to buy a principal residence – on or before April 30, 2010.


2. If you enter into a binding contract by April 30, 2010 you must close on the home on or before June 30, 2010.


3. For qualifying purchases in 2010, you will have the option of claiming the credit on either your 2009 or 2010 return.


4. A long-time resident of the same home can now qualify for a reduced credit. You can qualify for the credit if you’ve lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009.


5. The maximum credit for long-time residents is $6,500. However, married individuals filing separately are limited to $3,250.


6. People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.


7. No credit is available if the purchase price of the home exceeds $800,000.


8. The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.


9. A dependent is not eligible to claim the credit

Small Business Jobs and Wages Tax Cut

President Obama has proposed a new jobs creation program that is targeted at small businesses who are the engines of job creation. The program is designed to provide firms an incentive to move quickly on new hires by reducing payroll tax costs. The program provides:

• A $5,000 tax credit for each net new job created in 2010. Employers would receive a tax credit of up to $5,000 against their payroll taxes for every net new employee they hire in 2010. The credit is designed to help jumpstart job growth by giving employers an incentive to add jobs or accelerate the hiring they would have done later in the future. Start-ups would be eligible for half the credit, which provides an incentive for entrepreneurship while avoiding gaming. The credit would be administered off an employer’s unemployment insurance wage base (equal to 72% of the unemployment insurance wage base increase, or $5,000 credit for each additional worker who earns at least $7,000).


• An additional tax credit to reimburse payroll taxes on increases in inflation-adjusted payrolls. Businesses will receive a bonus 6.2 percent tax credit on aggregate wages in excess of inflation – reimbursing the employer for the Social Security payroll taxes they pay on those payroll increases. This provides firms with an incentive to increase wages or work hours for existing employees as well as hire new employees at a higher wage. This wage bonus would be calculated off the Social Security payroll tax base, so firms would not get credit for increasing wages for employees making more than the current taxable maximum of $106,800.


• A cap at $500,000 per business to incentivize small business hiring. All firms with net employment increases will be eligible for these credits. But to ensure that small businesses receive the bulk of the incentive to hire, the maximum credit will be limited to $500,000 per business.


• Anti-abuse provisions to ensure that employers do not game the system. Businesses that reduce employment or payrolls in 2010 would be ineligible for both the $5,000 credit and the wage bonus. The credit would also include anti-abuse provisions designed to deny or limit the credit to employers that seek to game the system by, for example, replacing full-time employees with part-time employees. This will include limiting the maximum jobs credit amount to 25% of the increase in a firm’s Social Security payroll wage base. In addition, rules would prevent businesses from renaming themselves or merging in order to claim the credit.


• Quarterly payment option to accelerate payments to firms. Employers would have the option of receiving the tax credit on a quarterly estimated basis. This helps get money in the hands of employers earlier in the year, could help increase awareness of the credit and provides an early incentive to hire.


• The proposal is estimated to cost $33 billion. The administration plans to pay for this program with savings from the Treasury Department’s Troubled Asset Relief Program, which the administration says has cost $200 billion less than had been projected. If every firm used the maximum credit to hire rather than for salary increases, it would reward six million new jobs.