Tag Archives: tax preparation

Education, IRS

NATP Offers Tax Planning for Military Personnel and Spouses Webinar

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My cousin, Lt. Col. David Oclander, Battalion Commander, on the left.

As regular readers know, I’m a big fan of the National Association of Tax Professionals. They generally provide top-notch education, and I appreciate the fact that they do not discriminate against non-credentialed tax pros. Before I became a CPA, that was where I got most of my continuing education, because organizations like AICPA or NAEA are restricted to those with licenses. The IRS Tax Forums and web programming are more accessible, but often the quality of IRS presentation skills is pretty poor — they’re trained on compliance, not on public speaking. So when I see that NATP is hosting a class on an important topic that might not be getting enough promotion, I try to amplify it.

Today I’d love to highlight their upcoming session on August 29th: “Tax Planning for Military Personnel and Spouses“. NATP Instructor Mari Fries, EA, CFP explains that at the core of all military returns is the Servicemember’s Civil Relief Act (SCRA) and in more recent years the Military Spouse Residency Relief Act (MSRRA). Understanding the impact of these acts on a military return can result in thousands of dollars of tax savings for the service member and family.

I wanted to share it because I feel like this is a topic that doesn’t get much CPE time — it’s always a page in an update where the presenter says, “and I’m sure this doesn’t apply to anyone in here,” or “if this applies to your clients you already know the details, so I won’t go into it.” The most we can usually hope for is a link to the IRS webpage on Tax Information for Members of the Military or IRS Publication 3, Armed Forces Tax Guide. (To be fair, both of these are chock-full of great info, but it’s hard to suss out on your own, even as a professional preparer.)

If you have tax clients in the military, or you’re considering a niche in this under-served area, I strongly recommend this 100-minute, 2-CPE credit class. It will also be available on-demand.

From NATP:

At the core of all military returns is the Servicemember’s Civil Relief Act (SCRA) and in more recent years the Military Spouse Residency Relief Act (MSRRA). Understanding the impact of these acts on a military return can result in thousands of dollars of tax savings for the service member and family. This webinar, through case studies, will demonstrate the impact of these two federal laws on state returns and offer the preparer the knowledge necessary to identify when the SCRA and MSRRA are not being applied accurately at the state level. Additionally, we will cover other tax benefits afforded to our military personnel such as nontaxable pay and benefits, nontaxable combat pay and its impact on IRA contributions and EITC, and automatic extensions to name a few.

In this course, the instructor will teach you to distinguish between “home of record” and “domicile”, understand the impacts of the SCRA and the MSRRA on domicile, accurately identify when the laws are not being applied appropriately at the state level, and summarize special tax provisions available to military personnel.

Mari Fries, EA, CFP provides a preview of the course and her passion for the topic in this short YouTube spot:

According to the University of Florida IFAS Extension, there are a wide range of unique issues that affect tax filing for military families, including:

  1. Moving expenses for permanent change of station (PCS) relocations
  2. Sale of a primary residence or “accidental landlording” following a PCS move
  3. Travel required for Reserve duty
  4. Tax-exempt and taxable allowances (i.e., need-specific payments in military pay)
  5. Tax-free “combat pay” for service in designated combat zones
  6. Certain tax-filing extensions
  7. Legal residency rules for state income tax filing (service members and spouses)
  8. State tax rules for taxation of military retirement benefits
  9. The opportunity to make tax-deductible pre-tax dollar (i.e., money that has not yet been taxed) contributions to the traditional Thrift Savings Plan (TSP)

A complete description of military-specific tax rules can be found in IRS Publication 3, Armed Forces Tax Guide. The IRS website also contains military tax tips and links to resources such as MilTax, a Department of Defense and Military OneSource program that provides free tax return preparation and e-filing for service members and some veterans, with no income limit.

IRS, Tips

Struggling With Taxes? Here’s Where To Get Help

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(c) Nataliya Vaitkevich

The past three years have been challenging in so many ways, to so many people — but as a tax preparer, I can confidently say that the inability for the IRS to provide its usual level of customer service has been among the most impactful. Luckily, recent Congressional funding to make up for years of inadequate budgets, combined with Treasury Secretary Yellen’s direction that IRS priorities should include clearing the backlog of unprocessed tax returns and improving customer service, seem to be making a difference.

Pre-pandemic, the IRS offered all sorts of taxpayer assistance options, but the inability to offer in-person services, as well as the intense strain that government financial relief programs placed on the already-stretched agency, made it impossible to offer even the most basic of support programs. The good news is that some of the Taxpayer Assistance Centers are reopening to the public, one Saturday each month for walk-in help without an appointment.

On March 11, April 8 and May 13, from 9 am to 4 pm, certain IRS Taxpayer Assistance Centers will offer in-person service and assistance to meet taxpayers’ needs. The IRS recommends that you come prepared and bring documents such as photo ID, Social Security cards, IRS notices received, proof of bank account information, and so on. Professional foreign language interpretation will be available through an over-the-phone translation service. For a list of addresses, visit the IRS’s website announcement and then click the plus-sign to the left of your date of choice. Scroll down to your state, and all the addresses of the participating offices will be listed.

The IRS also notes various options for obtaining free tax preparation services locally:

The IRS has also published a series of “Tax Time Guide” news releases designed as a resource to help taxpayers file an accurate tax return. And US News & World Report recently published a list of free and low-cost tax preparation resources. It’s not a magic wand, but after a few rough years, you’re no longer alone when it comes to navigating tax season.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Tips

How to Find a Qualified Tax Preparer In Your Geographic Area

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As you might imagine, we get quite a few inquiries for tax preparation services, but a) we only do taxes for our small business accounting & bookkeeping clients, and b) we only work with clients in Illinois, Indiana and Wisconsin. I’m currently in the process of interviewing qualified CPAs and bookkeepers to develop a vetted list of firms to whom I can refer potential clients, but in the meantime, I do have a solution for finding a good local tax preparer — the National Association of Tax Professionals’ Find a Tax Preparer (natptax.com) searchable directory.

NATP is one of my favorite professional organizations, and their “Find A Tax Pro” tool works great! When you use the link above, it will automatically filter for folks who are NATP members — which means these people are voluntarily taking the extra step to obtain excellent education in the field on a monthly basis (via e-newsletters, webinars, conferences, their research service, quizzes, and the regular TaxPro magazine), as tax guidance changes so frequently.

(No, I don’t earn commissions for this — I just have great respect for them, have been a member most of my career, have taken countless courses with their instructors, and have been generally impressed with their research service. I also really appreciate what a solid ratio they have of female officers, managers and instructors, which is not always the case in my field. They still need to work on DEI, but let’s be real: so does everyone in accounting and tax, to be honest. It’s an arena rife with underrepresentation issues.)

My suggestion is to use the search box on the right (after you click the button on the bottom of the landing page) and enter the following:

1) What do you need? Tax Preparer

2) Specializing in? All

3) Located in? Type in your city and see if it comes up — if not, pick a slightly larger city nearby, or even your entire state if you prefer.

The thing is, taxes don’t have to be done by a local preparer (so many of us are remote at this point) — however, you do want to work with someone who understands the specific requirements of your geographic area.

Let’s say you were in Chicago, for example — as a local accountant who specializes in small businesses, I might ask things like: whether or not you are collecting/paying sales tax, use tax, bag tax, soda tax, restaurant tax; or if you’re licensed properly with the city; or if your staff is up-to-date on requirements for sexual harassment training; or whether or not your company is in compliance with minimum wage, sick pay, and retirement requirements for employees… but someone outside of this area might not even know those requirements exist.

So even though it might be a remote relationship, it’s still best to go with someone from your area if you can. They might know something about your industry’s requirements in that area that a non-local would not.

Then lastly, scan or do an on-screen search of whatever list comes up based on your filters, and look for people who have the letters “CPA” or “EA” after their names. These are practitioners who went the extra mile (or twenty) to get a professional designation — it doesn’t mean they know everything, but they’re clearly committed to learning everything they can about tax law, so you want one of them!

And if you find a fabulous CPA in the Chicago area who is still taking on new clients, please let me know in the comments! (Bonus points for women-owned firms; extra bonus points for CPAs that offer tax, accounting, bookkeeping and advisory services.)

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Education, Site News, Tips

What’s The Difference Between A CPA, Bookkeeper, And A CFO?

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I have often imagined what my firm might look like in five years and how what I do then might be different than now. And when I watch videos by Hannah Smolinski of Clara CFO, I think: “that’s it! I want to do what she does.”

No, I don’t necessarily want to specialize as a fractional/outsourced CFO (although we already do a lot of this type of work for our clients). What I mean is that I love teaching small business owners how to better manage their companies, and training other bookkeepers and accountants how to better help their clients.

This video was a great example of that — a topic that small business owners need to understand but that few folks take the time to explain. (Although I have one complaint: she should have made it clear that “CFO” is just a title — it’s not a credentialed designation like EA or CPA. As with “tax preparer,” “bookkeeper,” or “accountant,” anyone can call themselves a CFO. So be careful.)

I agree with Hannah that our profession has done a poor job at explaining exactly what it is that we do. My clients mistakenly referred to me as their CPA for years before I actually sat for (and totally killed, mind you) the exams — and I’d have to correct them to make sure they knew I wasn’t qualified to do public accounting (for which the exams certify you). And they were like, “well, once you’re a CPA, how will what you do for us change?” The answer… um… it won’t, not at all. My firm will still do your bookkeeping, accounting, tax preparation, tax planning, financial analysis; and some things Hannah forgot to mention in her video: accounting technology consulting, internal controls/systems design, HR/payroll/benefits, and local/state tax compliance (sales/use, restaurant, soda, liquor taxes). We pride ourselves in straddling the worlds of bookkeeping, accounting, analysis, and tax — providing holistic small business financial consulting.

I think that’s the reason we don’t do a great job of explaining what we do — there’s no requirement to get a certification or degree to perform any of these duties. I did them before I became a CPA, I did them afterwards, I still do them. And a lot of my non-CPA colleagues in Bookkeeping Buds, for example, absolutely dance circles around certified accountants when it comes to accounting technology, clean-up and problem-solving, local/state law compliance, and designing efficient and accurate systems and processes.

And if you’re wondering why I bothered sitting for one of the hardest exams in the world (four parts, over a period of more than a year), it was because my colleagues took me more seriously as a CPA — not my clients. (At conferences, many CPAs and EAs were entirely dismissive of those of us who hadn’t tested their mettle against the exam process.) It was my Master’s Degree in Accounting & Financial Management — not preparing for the CPA exams — that taught me the additional skills I wanted to use with clients: financial analysis, strategy, managerial accounting, cost accounting, etc.

Long story longer: check out the video above. It does a nice job of explaining the breakdown among job titles — and I think the most important takeaway is to make a list of the duties you’d like fulfilled, and then ask around your network of other small business owners until you find a professional who knows which of these they can perform, and has a solid network to find others who can fill in the missing pieces. A good bookkeeper, accountant or CPA doesn’t work in a vacuum — we refer the work that isn’t in our wheelhouse to other talented professionals. For example, it’s prohibited by law for us to perform legal or investment services, but we’ve worked with many lawyers and investment advisors and know where you point you. Hiring any of these roles should be an addition to your team that is greater than the sum of its parts.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.