Getting Ready for Tax Time

Summary

The transcript covers an Ask Ralph podcast focused on getting ready for tax season, including finding a qualified accountant, gathering necessary documents, and carefully reviewing completed returns. Key points cover credentials to look for in an accountant like licensing, experience, communication style and building a relationship. Income, deduction, business, real estate and life event documents are emphasized to collect. Finally the importance of taxpayers thoroughly verifying their returns for accuracy is stressed even when using a professional preparer, along with asking any questions.

Chapters

Introducing the Podcast and Host

The host Ralph Estep, Jr. introduces the podcast and himself, framing tax preparation as something not to dread like a dentist appointment. He asks listeners to provide reviews to help grow the audience.

Finding the Right Accountant

Tips are provided on finding an accountant including verifying credentials like licensing, specialization experience, communication skills and responsiveness. Intimate financial details require a trusting relationship.

Gathering Necessary Documents

Comprehensive income, deduction, business and life event documents are listed to collect before meeting an accountant. Disorganization causes delays and missing potential tax savings.

Carefully Reviewing Completed Returns

Despite using a professional preparer, taxpayers retain ultimate responsibility for their return accuracy. Filers should thoroughly verify personal details, income and deductions line-by-line.

Welcome back to another episode of the Ask Ralph podcast where we dive deep into the world of taxes and financial matters. I'm your host, Ralph Estep, Jr. And today we have an important topic to discuss and that is getting ready to have your taxes prepared.

Now some of my clients have told me, Ralph, that's sort of like getting ready to go to the dentist. Well, I'm hoping it doesn't feel like that for you. But the truth is tax season can be a stressful time for many individuals.

But with the right preparation and guidance, it doesn't have to be. Today we're going to explore what to look for in a professional accountant. We're going to discuss the documents and records you need to assemble and emphasize the importance of reviewing your completed returns for accuracy.

I'm doing all this to make this a little less taxing on you. That is a funny play with words. But before we get started, I want to remind all our listeners to leave a review on our podcast page.

That podcast page is www.AskRalphpodcast.com Your feedback is greatly appreciated, and it helps us improve the content of our show. So now let's dive into getting ready for tax season.

Welcome to the Ask Ralph podcast. We're listening to an experienced financial professional can help you make sense of confusing questions current headlines and industry trends about taxes, small business, financial decision-making, investment strategies, and even the art of proper budgeting, Ask Ralph makes the complex simple by sharing his real-world knowledge with all things financial.

Now here's your host, Ralph Estep, Jr.

Welcome back folks and let's jump right into this today. The first step in preparing for tax season is finding the right professional accountant to assist you.

While some individuals may choose to prepare their own tax returns, working with a qualified accountant can provide numerous benefits. This is what I do for a living. A professional accountant has the knowledge and expertise to navigate the complex tax laws and ensure that you are taking advantage of all available deductions and credits.

They can also provide valuable advice on tax planning strategies and we can help you avoid common pitfalls. So you might ask me, Ralph, what do I look for in a professional accountant? Well, I'm glad you asked.

There are several factors to consider. First, it's important to ensure that the accountant is licensed and has the necessary credentials. You want to look for things like license account and certified public account or enrolled agent.

These designations indicate that the accountant has met certain educational and professional requirements. See the truth is you don't have to have a license to prepare tax returns. There are all kinds of places out there that do tax preparation, but that doesn't mean that these folks are skilled.

It doesn't mean that they have a high-level education. It doesn't mean that they have continuing education requirements like I have and other people in my, area of work have. So that's the most important thing.

Experience is another important factor to consider. Find out how long the accountant has been in practice and whether they have experience working with clients similar to situations like yours. If you've got a particular type of business or a particular type of situation, you know, it's not an unreasonable thing to inquire of the accountant and ask, have they ever handled that type of situation.

We get that question all the time. They got to have somebody that will come in and say, hey, Ralph, do you work with HVAC companies or do you work with plumbing companies? That's a reasonable question to ask.

A seasoned accountant will have a deep understanding of the tax laws and regulations and will be able to provide accurate and reliable advice. It's also essential to consider the accountant's communication style and availability.

This is one of the things that a lot of my clients talk about all the time is, look, we found this guy to do our taxes, but the dude won't call us back. That's really important. One of the things I pride myself in my practice is we're big on communication.

We do a lot of communication, but you also must understand what does that look like? Are they going to communicate with you effectively? Are they going to be available to meet what you're looking for?

You want to work with someone who's responsive to your questions and concerns and who can explain complex tax concepts in a way that you can understand. One of the greatest things that clients have said to me is, Ralph, you explain it to us in ways we can understand.

Building a good working relationship with your accountant is important as you'll be sharing sensitive financial information with them. I tell clients this all the time. It's almost like one of the most intimate relationships you can have because you've got to put it all out there on the table.

So, once you've found a professional accountant, it's time to gather the necessary documents and records to prepare for your tax returns. This can feel overwhelming, but being organized and proactive can make the process so much smoother.

Start by collecting all your income-related documents. That would include such things as W-2 forms from your employer, 1099 forms from any freelance or self-employment income, and statements from financial institutions for interest and dividend income.

If you have rental properties or investment accounts, gather all the relevant paperwork as well. I say this to clients all the time. Don't even schedule your appointment until you've got all these documents because you may have to do some homework and get all these things in place.

I've had clients come in to meet with me and they don't have all their paperwork ready and they're saying, oh, Ralph, I'm going owe? Am I going to get money back? I can't tell you that if I don't have all your information There's no way for me to complete your tax return. So, you've got to do the homework and get yourself already to go.

Next thing you want to do is gather any deductions and credit related documents This would include receipts and records for expenses such as medical bills charitable contributions and business-related expenses. If you have a mortgage, you're going to need your form 1098. On that 1098 statement, it's gonna report your mortgage interest you paid. It also should report the property taxes that you paid if it doesn't that's something you're gonna need to collect before your meeting as well. And, don't forget to gather documentation for any education related expenses or student loan interest payments.

If you've got kids in college, ask them ahead of time. Tell them you’re having a meeting with your accountant, and you need their 1098 T-form They probably look like you look at you like you have horns. But this is something that you need to get from and generally it's available through their financial aid portal for their college or their university. It's also important to gather any records related to major life events that may affect your tax situation.

What would that be, Ralph? Well, let's say you got married this year. Let's assume you had a new child or let's assume you adopted someone. Maybe you unfortunately got divorced or purchased or sold a home.

All those things are really important and we're going to need all those documents in order to do your tax return completely. Being organized and having all the necessary documents and records in one place will save you time.

It's also going to ensure you don't miss any important deductions or credits. It's also going to save you money if we don't have to look at your file repeated times. So once your tax returns are prepared by your accountant, it's crucial to review them carefully for accuracy.

We all make mistakes. Mistakes can happen and even a small error can have significant consequences. This is your tax return. We may prepare it for you, but ultimately, it's your return.

You need to take time to go through your returns and double check all the information. Make sure your personal information, such as your name, make sure it's spelled correctly. If you have a middle initial or a suffix, make sure it's there.

Make sure your address is correct. Check your social security number. Check your dependent social security number, your spouse's social security number. Review the income and deductions amount to ensure they are accurate and complete.

You have an idea of what your income is, make sure it's all there. I had a client come in a few years ago where they had gone to a tax preparer and they forgot to include one of their W2 forms and I asked them, I said, did you look at your tax return?

Well, no, you know, I just figured they did it correctly. Well, if you'd look at your tax return, you'd have seen that your income was half what it should have been. Now, I'm not saying that the tax preparer didn't make a mistake, but this is something that the person should have seen.

If you have any questions or concerns about the information in your tax returns, you must reach out to your accountant for clarification. That's why we talk about how important it is to have that good communication and relationship.

Most of my clients come in, we sit down and go over their returns and generally by the time they're ready to go, we’ve got a pretty good idea of what's going to happen.

There might be some loose ends we need to tie up, but they have a pretty good idea of what's going on. You might be unfamiliar with some of the terms or answers in the return. If you ask those questions, most of us will be happy to answer them.

Remember this, you are ultimately responsible for the accuracy of your tax return, even if you hire a professional to prepare them. Even if you go to one of these tax houses like the H &R Block or Jackson Hewitt or whatever they are, I don't even pay attention to them anymore.

You're still responsible for your tax return. Take the time to review your completed returns is an essential step to ensure that everything is correct and avoiding potential issues with the IRS. And we'll talk in the future with another podcast, of what you can do to potentially get out of a situation if someone has made a mistake and you relied on them.

It's called reasonable reliance on a third party. But that's it. So before we wrap up today's episode, I want to remind all of our listeners to visit our podcast page. I know I've said this probably a million times, we're really trying to build our audience, our podcast page is www.AskRalphpodcast.com

And it's got a lot of cool stuff there too. It's AskRalphpodcast.com. You can leave a review, tell me how we're doing, you know, if there's a topic you want us to discuss, you know, talk about that. Your feedback is invaluable to us and helps us continue to provide high quality content on tax related and other matters.

You can also click on the little microphone icon, the bottom right, and you can leave us a voicemail message and maybe you'll end up on the show. Well, thank you for joining me today on the Ask Ralph podcast.

I hope this episode has provided you with valuable insights on getting ready for tax season. I hope it doesn't feel like going to the dentist still. Remember to find a qualified professional accountant, gather all the necessary documents and records and do a good job of reviewing your completed returns for accuracy.

By following these steps, you can navigate tax season with confidence and peace of mind. Well, friends, stay tuned for our next episode where we'll be exploring another exciting topic in the world of taxes and finance.

Until then, I'm Ralph Estep, Jr. signing off. Take care and be financially savvy. Thank you for joining us on the Ask Ralph podcast. And with a simple click to subscribe, we'll invite you back to our next episode.

And remember, financial issues don't have to be complicated. Just Ask Ralph. The information contained in this episode of Ask Ralph is based on data available as of the date of its release. Saggio Accounting Plus and Ask Ralph Media Inc., is under no obligation to update this content if changes occur. Applying this information to your specific situation requires careful consideration of all facts and circumstances. And any information provided is not to be considered as financial, tax, or legal advice.

Please consult your tax advisor or attorney before acting on any material covered.