Tax / CPA type question...

[Richard]

With a single W2 and the info given it sounds like itemizing isn’t going to benefit you. It sounds like you will be doing the standard deduction.

Yeah.... also, the wife recently got her Real Estate license.... so, *IF* she gets involved with that, then we'll be back to 1099 and having expenses. She's got a habit of doing something for the challenge of it. She might not ever pursue any real estate "deal" but she got her license!!



Ok, so here's a boring story so only read it if you're terribly bored this morning!!!


I've been in the investment business for over 30 years. I had a client who had a reasonable sized account.... and he passed away. He had cancer, knew he was dying and wanted his wife to meet me so I could help take care of her (financially) after he's gone. She was a nervous type and I guess he feared someone would take advantage of her.

Fast forward, I do a career blip (wife wanted to buy 2nd home in Florida so I figured I'll just move down there into apartment while looking around and by the way, change jobs to move there)

So I'm in Florida but now, I'm a captive broker and can only do what the firm allows me to do.

Several months go by.... phone rings it's my (now deceased) client's wife. He'd passed away, she'd sold his business & liquidated some things and had almost $500K that she wanted "to do the SAME THING he did" (He simply wanted some fixed annuities)

Hmmm.... well..... here's a $30,000 commission calling me BEGGING me (not really) to do a transaction for her......and I can't. I could break rules and do it but I won't do that.

So what to do???? I think of my prior business partner..... HE could do the business and give me a cut? Nope, can't do that either....it's illegal to share like that.

What to do.....what to do..... (snaps fingers) I GOT IT!!!

I called the wife and asked her if she'd like to get her insurance license? (you don't need a securities license for fixed annuities so "anyone" can do them)

She near hangs up on me.... thinking I'd gone looney.

I explain to her the situation and we're looking, no, let me correct that.... that SHE is looking at $30,000 commission to do it.

She said sign me up!! what do I have to do?

My logic here is, I can't share commissions with "someone" as it's against the rules. However, if my WIFE made the commission, now it's already in house!!!

So I call client's wife back, tell her a bit of the situation and I was coming home in 3 months for Christmas vacation and could we meet then? (I was really buying some time for my wife to get her schooling & testing done)

Time comes, my wife & I drive over to her house.... my wife doesn't understand the product worth a dime....

So my wife sat there while I went through the process of explaining how it worked and the pros/cons again of doing something like this.... the gal confirmed that's what she wanted to do.

I pulled the forms out and told the gal "sign here, here here and...... over here"

I turned to my wife and said "now YOU need to sign here.....here and initial this" and she did.

I gathered all the forms and told them both I'll do the rest.


So my wife's first insurance sell was a $30,000 ticket. about a year later, she was in a terrible car accident and because of how long it took her (17 broken bones) to heal..... her insurance license expired making that her first and last insurance sale.


The lady has my personal cell number because I made an agreement with her husband that I'd do my best to be there for her.

 

[ovrszd]

We did our own taxes for years. But when I got out of the Air Force and settled in Iowa it changed. When you live in one state, get income from that state and work in another state it gets to be confusing and complicated. The amount I pay to have my taxes done is well worth the peace it keeps in the family.

I think there is something wrong with the tax code when two educated people can read all the instructions and still not be sure they are doing in correctly.

Doug in SW IA

Yep, I understand that.

The IRS website has gotten much better. Almost all forms are fillable and do the calculations online.

Last year a couple weeks after I submitted my packet I received a letter from IRS. It stated that I had made an error on an entry and quoted the form/line number. It then stated the amount of refund I would be getting was going to change. It increased. Their computer system caught my error, corrected it and returned more money.

So to respond to davrow's comment. He's right I don't fear the government as much as he does.

 

[teejk]

Yep, I understand that.

The IRS website has gotten much better. Almost all forms are fillable and do the calculations online.

Last year a couple weeks after I submitted my packet I received a letter from IRS. It stated that I had made an error on an entry and quoted the form/line number. It then stated the amount of refund I would be getting was going to change. It increased. Their computer system caught my error, corrected it and returned more money.

So to respond to davrow's comment. He's right I don't fear the government as much as he does.

The reality is that for a lot of people the government will have collected all the information needed to complete your return. And with electronic filing, they can spot an error as soon as you file.

 

[teejk]

We did our own taxes for years. But when I got out of the Air Force and settled in Iowa it changed. When you live in one state, get income from that state and work in another state it gets to be confusing and complicated. The amount I pay to have my taxes done is well worth the peace it keeps in the family.

I think there is something wrong with the tax code when two educated people can read all the instructions and still not be sure they are doing in correctly.

Doug in SW IA

Your problem is with the states, not federal. TurboTax pricing is such that you will pay a lot if you have more than one state. A professional will undoubtedly use software with a different pricing scheme.

 

[KennyG]

I've never hired my taxes done. I've never bought a tax program. I simply don't understand that.

The programs provide a lot of support if you itemize (which most of us probably used to do.) I went to the software when I had to start calculating alternative minimum tax. The AMT calculation was almost indecipherable without software.

 

[Sigarms]

I've never hired my taxes done. I've never bought a tax program. I simply don't understand that.

When I lived in "state A" but had a drivers license from "state B" and had a vehicle's license plate from "state C", I said the heck with it and let someone else figure it out. That's when I was single. Kind of got more interesting after my wife and I got married and started a "uncoventional" family with yet other souces of income. Ironically, what we've found is in general, you pay for knowlege of the tax laws and what you can and can't do. Sometimes paying money to people to figure out taxes out is worth it, sometimes it's not. From my own personal experience. Won't find out until you find someone good IMO.

 

[ovrszd]

The reality is that for a lot of people the government will have collected all the information needed to complete your return. And with electronic filing, they can spot an error as soon as you file.

Yep. And your hired preparer will only appear at the "audit" to verify that they reported what you told them. I simply think it's a false sense of security for a tax payer to think that they are buying protection by hiring a preparer or purchasing a program.

 

[ovrszd]

The programs provide a lot of support if you itemize (which most of us probably used to do.) I went to the software when I had to start calculating alternative minimum tax. The AMT calculation was almost indecipherable without software.

I agree.

 

[ovrszd]

When I lived in "state A" but had a drivers license from "state B" and had a vehicle's license plate from "state C", I said the heck with it and let someone else figure it out. That's when I was single. Kind of got more interesting after my wife and I got married and started a "uncoventional" family with yet other souces of income. Ironically, what we've found is in general, you pay for knowlege of the tax laws and what you can and can't do. Sometimes paying money to people to figure out taxes out is worth it, sometimes it's not. From my own personal experience. Won't find out until you find someone good IMO.

I agree that for some taxpayers it's better to pay someone to research the methods than figure it out themselves.

 

[RickB]

I have used TurboTax for at least 20 years. I’m talking to a CPA this week because transitioning from 2 fully employed adults to one fully retired and one partially so is a huge game changer and I want some oversight concerning some year end transactions. This might be a one time deal, might be an ongoing thing. I decided paying for tax guidance makes more sense for me than hiring a financial advisor.