Archive for the ‘Taxable Talk’ Category

Is Anyone Happy In Tax Professional Land?

Wednesday, October 19th, 2022

Except for our four international clients on second extension and our ten clients impacted by Hurricane Ian, the 2020-2022 Tax Season is over.  I expect that within one month, we will be off filing returns until February 2023 (well, there is our one September fiscal-year-end corporate client….)  We had quite a few issues this year, and I’ll expound on them at length in the next week or two.  For now, let me ask a question:

Among tax professionals, is anyone happy?

I saw lots of tax professionals leaving the profession over the past two to three years, and it didn’t make sense to me.  This is a good profession where we help our clients.  I enjoy the work (yes, someone has to).  But this past Tax Season was the first year I felt, at times, that I didn’t like what I was doing; I now understand why tax professionals are retiring.

This has major impacts to our clients.  The Law of Supply and Demand holds throughout the world (no matter what politicians say).  If Supply decreases, Price increases.  Even if inflation were 0% (and it’s not), prices would be increasing significantly.  Add in the huge inflation we’re seeing (example: paper prices at Costco have increased from $28.99/case to $35.99 $36.99/case since November 2021), and most tax professionals will be increasing prices dramatically for the 2023 Tax Season.

Did I mention Demand?  That’s increasing, too.  During the month of October (and today is October 19th, so there’s still another nine business days) we’ve received twenty inquiries for next year!  So that, too, will cause price increases.  Additionally, if you are seeking a tax professional to assist you with your 2022 tax returns now is the time to find him or her because January will likely be too late!

I’m going to have a lot more to say about this as I review our failings (and, unfortunately, there were plenty) and successes during the 2022 Tax Season.  I’ve written two parts of the series (Part 1 and Part 2 were posted earlier this year); Part 3 should be up by the end of next week with Part 4 following soon thereafter.

Let me go back to the question I asked and ask it of myself: Was I happy doing what I do this year?  Far less so than in the past.  This means changes are coming–perhaps dramatic changes.  I am going to be happy doing what I do or I won’t do it anymore: life is too short to do otherwise.

UPDATE: I just returned from Costco to buy paper (and a few other items), and the price has increased $1/case (to $36.99 from $35.99) from September.

We’re Under Attack!

Tuesday, April 26th, 2022

This afternoon, I was answering email and I accidentally clicked on Outlook’s “File Information.”  I happen to notice that the last login was from Buffalo, New York.  I’m just 3,000 miles away in Las Vegas, so I immediately sent a message to my IT person.  He both reassured me and made me worry–a lot.

No, no one from Buffalo had logged in.  However, someone was trying to log in, and per the IT logs someone was actively trying to break into our email server using a brute force technique from somewhere in Asia (spoofing various US cities).  I suspect they think that from the email server they can then get into our regular network (they can’t; they’re completely separate).  Still, my IT person wanted to immediately implement a couple of new security procedures for our email and I gave my go-ahead.  I’m not going to detail them (sorry, hackers), but they should make it far, far more difficult to even try to break-in.

The reason I bring this up is that tax professionals are targets.  We have a ton of wonderful information that hackers want (lots and lots of personal information), and I’d prefer not to have to use my cyber insurance.  If your IT person/department is not periodically checking your logs to see if you’re being targeted, you need to rectify that immediately.  I didn’t know that hackers were targeting email servers, but they are.  So be vigilant tax professionals: We’re under attack.

Bozo Tax Tip #2: Anger Your Tax Professional!

Thursday, April 14th, 2022

If you are a tax professional living in Las Vegas, and you’re interested in working for me for the 2023 Tax Season (2022 tax returns filed in 2023)–or you are in Las Vegas and you’re interested in becoming a tax professional–we may have an opening for you.  So why am I starting a post in regards to Bozo Tax Tips with my possibly expanding my staff for 2023?

The reason is the “Great Resignation.”  The tax professional community skews older in age: I saw a statistic that the average age of a tax professional is in the mid-50s.  Finding good tax professionals is not easy (indeed, hiring in any profession isn’t easy), and I’m blessed to have the staff that I do.

From February 1st through the date this post is being written (March 10th), I have been averaging over two inquiries a day into using our services.  Indeed, my next available appointments are in May!  From talks with my friends in the business, they’re seeing the same things: not enough staff, and demand through the roof.

This equates to a seller’s market.  We increased our rates (for 2021 returns prepared in 2022) by 10%, and I’ve already concluded I didn’t raise them enough.  The law of supply and demand holds in every industry: if supply decreases and demand increases, prices go up.  Yes, you’re going to pay more.

So let’s get back to the title of this post: angering your tax professional.  Those who have met me know my salt and pepper hair is now mostly salt.  I enjoy what I do, but I do not enjoy (and have never enjoyed) dealing with misanthropes.  Given the high demand, your tax professional almost certainly feels the same way.  Every year, tax professionals send letters to clients who are about to become former clients because they’re either no longer a fit for them or the tax professional cannot make a profit from them (because they require too much time or will not pay what the tax professional believes to be a fair price).  I’ve sent these in the past, but I never enjoy doing that.  I’m vowing to send some at year-end unless conditions radically change.

The average tax professional is very stressed out.  Dealing with the IRS has been a disaster for the last few years.  The pandemic hasn’t helped in any way.  Congress (and the IRS) have added new regulations and forms (e.g. Schedules K-2/K-3) that add tremendous busy work with little gain.  My Office Manager recently saw me blow up (and I rarely do that).  I have marked a client that he is getting a “Dear Former Valued Client” at year-end because of what he put me through.  (I’d like to send one to Congress, too, but I can’t do that.)

So do not anger your tax professional…unless you want to find a new one.

Why Has Posting Been Light?

Thursday, March 17th, 2022

A friend asked me why I’ve posted so little this year.  The answer is simple: the real world intruded.  Family issues have definitely impacted my time, and the workload of my business has increased dramatically.  My clients deserve me spending time on what they pay me for–and I’m doing my best to do that.

And we’ve now hit the time of year where the blog goes on hiatus.  I have written the Bozo Tax Tips for this year; they’ll start appearing on Monday, April 4th.

Martin Veneroso, E.A.

Tuesday, August 24th, 2021

Clayton Financial and Tax isn’t the largest tax firm, but one thing I’ve insisted on is that all preparers be credentialed (either Enrolled Agents or CPAs).  The reason is that it shows a dedication to the profession, and a willingness to continue learning.  While it would be nice if Congress were to enact a nice, simple Tax Code, what we have today is something out of Tom Lehrer (“It’s so simple, so simple, that only a child can do it!”).

Something I mention from time to time is that if you are young and are looking for a career with (unfortunately) plenty of growth opportunities, becoming an Enrolled Agent is something to consider.  I strongly suspect that income tax returns will be around in the time of my great, great grandchildren, and as long as we have a Congress I expect tax returns to continue to get more and more complex.

Martin Veneroso is our newest employee.  He was notified in early August that he had passed the final part of the Special Enrollment Examination (the three-part test that one must pass to become an Enrolled Agent).  This past weekend he received his enrollment card in the mail (so at least one part of the IRS is able to process paperwork timely!), so Martin becomes the third E.A. on our staff.  Congratulations, Martin, and welcome to being a licensed tax professional.

 

Gambling With an Edge Podcast

Monday, November 30th, 2020

I was this week’s guest on the Gambling With an Edge podcast where we talk about taxes (with an emphasis on gambling). You can download the podcast here; it’s also available on iTunes and all the other usual podcast locations.

We spoke about changes in the tax law, self-employment tax for professional gamblers, self-dealing vis-a-vis IRAs, 529 plans, and offshore (foreign) corporations among other issues. I also gave a non-tax recommendation on my favorite Thai restaurant here in Las Vegas.

Bozo Takes a Year Off

Wednesday, March 18th, 2020

Every year I’ve posted my Bozo Tax Tips. I will not be posting them for the 2020 Tax Season. There are too many serious issues going on, and I think it’s best to focus on the serious issues tax filers face.

You can still search for the past Bozo Tax Tips if you need some levity. And enjoy this picture (among other topics):

Rashia Wilson (Image Credit: Tampa Police Department)

For those wondering Ms. Wilson said the cops wouldn’t get her. She’s enjoying 20 years at ClubFed.

No Face to Face Appointments

Thursday, March 12th, 2020

Taxes are a personal business, and providing service to our clients is what we’re about. That means face-to-face interactions. But I’m also an employer, and I must look at the health of my employees. Thus, beginning tomorrow we are no longer having any face-to-face meetings. We are happy to use Skype, phone, or any other interaction for any scheduled appointments. We encourage all clients to use our Web Portal (we will email any of you who need that information), fax, or mail.

Will the April 15th Deadline be Extended?

Wednesday, March 11th, 2020

The Wall Street Journal has a story (pay link) this morning speculating that the Department of the Treasury will push back the April 15th deadline.  There are no specifics given in the story, but given that politicians on both sides of the aisle are talking about this, there’s a reasonable chance this will happen.

The reason, of course, is the current coronavirus (Covid-19) outbreak.  As the outbreak worsens (which, it appears, it will), there will be disruptions.  Consider tax professionals in Seattle, where a large number of individuals have fallen ill.  Do you want to meet with someone right now, especially given asymptomatic individuals can spread the disease?  And for those who are ill (or are treating family members, or who have to deal witch their children who are now home on an extended ‘break’) they have more important things to deal with.

It’s something I, as a business owner, have to deal with.  We wash our hands after seeing someone, but let’s face reality: we operate in close quarters.  If one of us gets this, it’s likely that all of us in the office would get this.  As for working at home, that’s near impossible for our office given the technology infrastructure we use.

I had initially thought we would see a larger number of extensions (and it’s something I think still could happen).  I now suspect we will see this extension–probably something similar to the automatic two-month extension given to individuals outside the United States on April 15th.  Whether it will include a waiving of interest is to be determined.

I’ll close with something that’s obvious.  This week long-time clients called me and said they had colds, and wished to postpone their appointment.  We fit them in in two weeks.  If you’re sick, use some common sense (be it a cold, the flu, or anything else): Don’t take actions that will infect others!  We have a rule in our office that if you have a fever, you go home, and you cannot come into work until 24 hours after the fever has broke.  If all of us use some common sense and good hygiene, we will likely whether this storm with minimal damage.

The Best Tax Blog Is Back

Friday, February 14th, 2020

As a published author I’m biased about my writing ability. But as my mother told me (and, yes, my mother is a published author, too), know your abilities! The best tax blog up until May 2017 was Joe Kristan’s Roth Tax Updates. But in 2017 the firm Joe worked for merged into Eide Bailly; at the time I wrote: “…[P]erhaps there’s an Eide Bailly Tax Updates in the future. (I can always hope.)”

Well, nearly three years later I’m pleased to report there is now an Eide Bailley Tax News & Views Blog. It will be listed momentarily in the blogroll on the right, and it appears to be must-read every morning for those of us in the world of tax.