Ask Tax Dad: A Recovering Slacker, An Incompetent Accountant, And The Tax Return Of The Dead

The wisdom of Tax Dad

The wisdom of Tax Dad

Usually, our staff Certified Tax Cat handles readers’ questions about taxes, but he got his tax refund early this year and is on vacation, taking a salmon-watching cruise on the Pacific coast. Filling in for him is Laura’s dad, a retired accountant and real live independent tax preparer. Exclusively on Consumerist this spring, Tax Dad answers your questions.

This week: a first-timer fears preparing his own taxes for the first time, a CPA screws over a small business owner, and a daughter wonders whether she needs to do anything special when preparing a tax return for a dead person.

For years I was a slacker, since high school to now (almost 30) while never really getting a long, full-time job. I had some inheritance I lived on for a while but those taxes are already dealt with by a professional which cost way too much. Those were the only ones I had to do for the last 10 years. Come to the present and I’m now in my first professional job and it’s tax season. I’ve never done taxes myself and I’m scared of getting anything wrong because who isn’t scared of the big bad IRS? Any recommendations for a “first timer” on how to go about doing ones taxes for the first time by themselves? Any reference guides?

Thanks,
Justin

Dear Justin: There are a lot of unanswered possibilities here, which is why I like to sit down with a potential client and discuss these circumstances. A previous year’s tax return can be a helpful starting point. For example, you say you are in a “professional job”. Are you working for a salary? With a W-2? Are you self-employed? How much do you earn? Do you still have inheritance income/investment income? Married? Single? Children?

If yours is simply a W-2 return, you are computer savvy, and your income is modest, then it’s very simple. I would advise you to just go to the IRS.gov website and see if you qualify for freefile. There are a number of tax providers, but I have used and like TurboTax. The best starting point for most people is IRS Publication 17, which covers most circumstances. Good Luck.

In April of last year I hired a CPA (certified) who was suggested to me by a friend to complete a final return for my business. In August I was told that there was no progress made because I had not paid, I explained that we had not discussed payment but I would be happy to pre-pay, and sent a check for $300 which was cashed. The final return was due in September. I have since sent two emails and one certified letter and left two phone messages and cannot get a response or copy of the final return. Should I go to the IRS office in Philadelphia and see if the return was filed? What are the implications of not having filed if I made a good faith effort to hire a professional? Please help, thanks!

Regards,
Samantha

Dear Samantha: this is not solely a tax question, but I can see that it would be frustrating. I confess I am not familiar with incompetent CPA’s, but I am sure they do exist. I can only suggest that you do as you would with any dishonest or incompetent businessman. Check whether a complaint has been filed with your local Better Business Bureau. Document your case, then contact your state Attorney General. Sometimes all it takes is a phone call from them.

Chances are this person has been reported before.  If you live in Pennyslvania, you would go here to file a complaint. You can also check to see whether this CPA is still licensed.

In the meantime, you can check with your nearest IRS or online to see if your return was actually filed. If it has not been filed, hopefully, you have copies of your necessary papers and can find another preparer.

Implications? IRS just wants your return to be filed…by someone. They can be understanding. There may be late filing penalties involved, but that might depend on how much additional tax you owe, whether you made timely estimated payments, or if you are due a refund.

Dear Tax Dad: My own dad passed away recently and I need to file 2012 (and 2013, I reckon) taxes for him. It is not April 14th yet so of course I haven’t looked at any of his stuff yet.

What do I need to know? How do I know if I’m in over my head and should just hire a professional Tax Dad?

Executrix

Dear Executrix: Sorry to hear about your Dad. Filing his tax returns is really not that different from your own, with income and deductions treated the same. You will need to write the decedent’s date of death on the return. If your Mom is still living and was still married to him, she will still be able to claim his exemption and file jointly. She must write “filing as surviving spouse” on the return signature line. She, or you, as his executor or administrator, may be required to provide proof of your authority and sign the return.

Please remember that you get the advice that you pay for. Information provided by Tax Dad is a starting point, and not intended as a substitute for consulting your own real, live tax preparer or cat.

Have a question for Tax Dad about your federal or state tax returns? Send it to us at tips@consumerist.com with “ASK TAX DAD” in the subject line.

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