Here are the answers to some of the most Frequently Asked Questions we receive.
IMPORTANT NOTE: The information found on this website is general in nature and may not apply to your situation. Therefore, you should not rely on the information on this website alone. For specific advise, please call us.
Q. What services do you provide?
A. We prepare all tax returns including individual, corporation, LLC and LLP, non-profit, estate and trust, partnership, payroll, sales tax, property tax, and other taxes. We offer bookkeeping, financial statements, accounts payable, and accounts receivable processing--in fact, any office function, including setting up an office, as part of our services.
Q. What are your hours and are you a seasonal company?
A. We are open from 9am to 5pm, Eastern Time, Monday through Friday. During peak tax season we offer extended hours each day and on Saturday.
Q. Do you offer free business consultations?
A. Yes, we offer a free hour consultation for businesses. The consultation is to gather information about you and your business, while you find out more about us. We can usually answer a few questions at that time and determine if you have done the necessary registrations and filings. We request that you bring your last two income tax returns and financial statements (if any). Also bring anything else that you may have a question on.
Q. Do you provide prospective clients with estimates of your fee?
A. When appropriate, we prefer to provide a fee estimate. We always provide a fee range estimate for the preparation of tax returns. Where appropriate, we also provide written fee estimates to business clients.
Q. What size clients do you accept?
A. We provide services to home based businesses, professionals, and small convenience stores, as well as larger businesses. If the engagement is very large, we will accept it if we feel we have the staff to handle it. If we don't have the appropriate staff, we may form an alliance with another firm and perform a joint engagement. There is no account too small to be considered important in our office.
Q. Do you service clients outside of North Carolina?
A. Yes. Due to available technology we serve business clients in many other areas. We have several clients in Florida and Georgia as well as personal and small business income tax clients throughout the United States.
Q. Do you work with Start-up (new companies)?
A. Yes! Many of our clients are / were new entrepreneurs that are just starting in business. We will lead you through all the necessary governmental forms to start your business properly. Through our area networking, we can also assist in finding you other necessary professionals to deal with (lawyers, insurance agents, mortgage brokers).
Q. What do I need to do to start a new business?
A. Typically, most people will go to their lawyer first, get the business set up and then contact an accountant. We would rather that you contact us at the beginning. There are many different kinds of companies and we can help you select the best one for the kind of company that you will be setting up. Then we will continue to help you with payroll, tax returns, monthly accounting, and financial statements to whatever degree you need.
Q. I want to start a new business. Can you tell me which type of business I should form?
A. Yes. When setting up a new business, it is crucial to set up the right type of business, such as corporation, S corporation, limited liability company, limited liability partnership, partnership or sole proprietorship. Our consulting services will help you form the right type of business based on your unique situation with consideration given to liability issues and tax advantages.
Q. How is a Limited Liability Company (LLC) taxed?
A. A single-owner LLC defaults to being taxed as Sole Proprietorship. Income/loss from the LLC is reported on the owner’s personal income tax return. A multi-member LLC defaults to being taxed as a Partnership. A Partnership tax return must be filed. The profit or loss is then reported on the owner’s personal tax return. Any LLC can elect to be taxed as either a C corporation or an S corporation. To do so, one must file an election within 75 days of creating the LLC.
Q. Should I use a lawyer or an accountant to incorporate my business?
A. Although lawyers can get the paperwork together to make your incorporation happen, they might not know all the different tax laws that can apply to the different kinds of incorporations. Therefore, we suggest you see an accountant first to find out exactly which kind of incorporation you should pursue. Then have either your accountant or the lawyer finish the paperwork.
Q. I currently use an outside payroll service, and, frankly, have not been pleased for various reasons. What alternatives do I have?
A. We now have access to a very good payroll alternative that you can access and use right here on our webpage. This is a reasonably priced alternative, competitive with the nationally known services, and offers you the flexibility of running your own payrolls on YOUR schedule. Direct deposit, ACH tax payments and easy import to your QuickBooks or other accounting software are features of this very good software. Call us for a demonstration!
Q. How do you charge for your services and how does your cost compare to other tax preparation firms?
A. We generally charge by the hour and will be happy to give you a quotation of our expected costs. When providing our services, if we can help you reduce our time, we will tell you how. Our support, such as our tax organizer, is designed to offer professional, fast, and accurate services and to minimize our charges to you. Our overhead is kept low to allow us to keep your fee lower than other quality firms.
Q. What are your fees?
A. Fees vary based upon the work being performed. For business tax work our usual rate is $75.00 per hour. For accounting work the rate is $60.00 per hour, with Bookkeeping services billed at a rate is $45.00 per hour. Our typical individual tax returns start at $60.00, with an additional charge of $10.00 for each state return included with that return. We do charge additional fees for individual returns that include multiple schedule C, D and E activities. Business (corporate) returns start at $175.00, plus state filings depending upon the state requirements. Monthly accounting service is generally priced from $100.00, with quarterly service starting at $250.00. Of course the more work we perform or more complex the issue, the greater the price.
Q. Do I need a Certified Public Accountant or is an accountant okay?
A. Our experience has been that most small businesses do not need the added expense of a Certified Public Accountant. In those individual situations that require a CPA firm to at least review the accounting records we have developed a professional relationship with several firms that can provide any certification required.
Q. Are QuickBooks or Peachtree good products?
A. QuickBooks and Peachtree can help you with your small business accounting, but they cannot think for you. Our experience shows us that if you know something about accounting AND your computer software is set up properly from the beginning, it is possible that we don't need to spend as much time on your accounting. But too often we find the initial set up was not done properly and we end up spending more time 'cleaning up' the errors than if we had just entered the detail from the beginning.
Q. What is a reasonable wage for S corporation owners?
A. Ideally, the best way to set pay is to use an amount comparable to an individual being paid similar rate in your industry. Otherwise, we use a standard rule of 50\50. Basically, 50% of income available to owners should be taken as wages and the other 50% should be taken as dividends.
Q. Which items qualify for a cafeteria plan deduction?
A. The main items consist of Qualified dependent care costs, disability income * accidental insurance, group-term life, dental, & health insurance premium costs, and medical cost not covered by insurance. Any unused amounts in a particular category are lost by the employee and revert to the employer by the end of the plan year.
Q. Do I need to visit your office to have my taxes prepared?
A. It is not necessary to visit our office. Many clients utilize the mail or express services to send their information to us. For new clients, we encourage a meeting so that we can discuss your unique tax situation.
Q. Can I ever save tax by filing a separate return instead of jointly with my spouse?
A. You sometimes may benefit from filing separately instead of jointly. Consider filing separately if you meet the following criteria: One spouse has large medical expenses, miscellaneous itemized deductions, or casualty losses. The spouses' incomes are about equal. Separate filing may benefit such couples because the adjusted gross income "floors" for taking the listed deductions will be computed separately.
Q. Should I keep my old tax returns? If so, for how long?
A. Yes, you should keep your old tax returns for at least 5 years. When a return contains information pertaining to the basis of property owned, it should be kept until that property is sold. One of the benefits of keeping your tax returns from year to year is that you can look at last year’s return while preparing for this year. If you do throw out an old return you may fill out form 4506, Request for Copy or Transcript of Tax Form, and send it to the IRS service center where you filed your return.
Q. Is there any non-tax record that I should keep?
A. There are other records you should keep, even though they don't appear to have any use for your tax returns. Family documents, certain medical records, insurance policies, records of major purchases, are just a few examples. These documents will be needed in the case of any emergency that may arise.
Q. What pieces of paper do I need to keep in order to do my taxes?
A. Keep detailed records of your income, expenses, and any other information you report on your tax return. The most important point is to keep them as you go to aid in tax planning and reduce the stress when your are getting ready to have your tax return prepared. A good set of records can help you save money when you do your taxes and will be a trusty ally in case you are audited.
Q. How do I know when certain taxes are due?
A. You can give us a call or check out the Due Date Calendar on this website.
Q. What is the standard mileage rate?
A. The standard rate is 40.5 cents/mile in the year 2005. The rate was previously 37.5 cents/mile for 2004 and 36.0 cents/mile for 2003. It is important to keep your mileage log with you and record the starting miles, ending miles and purpose of each trip, throughout the year.
Q. When should I give you my tax information?
A. You should bring all your information in as soon as you have it all together. The sooner you bring it in to us the better chance we have at making sure we've done the best possible job for you. A mid-year review will help us help you plan your tax strategies and avoid an unpleasant surprise.
Q. How can I pay my taxes by credit card and which credit cards are accepted?
A. Credit card payments can be made by phone (1-800-2PAY-TAX or 1-888-ALLTAXX, toll free) or Internet (http://www.officialpayments.com or http://www.1888ALLTAXX.com) using Discover, American Express, or MasterCard. You will be provided a confirmation number at the end of the payment transaction and your credit card statement will provide confirmation of your electronic payment. The payment and return are reconciled based on the social security number entered and type of tax selected during the transaction.
Q. Is the IRS storing credit card information?
A. No. IRS does not have access to credit card numbers or directly participate in the credit card transactions. The IRS relies on private credit card processors to verify the validity of the card and line of credit. The processors forward the appropriate tax payment information to the IRS.
Q. Is there a fee charged for using a credit card to pay my taxes?
A. The company that processes your credit card payment charges a convenience fee. You are informed of the convenience fee amount before you authorize the payment. The fee is in addition to any charges, such as interest, that may be assessed by your credit card issuer. This company has no affiliation or ties to any credit card processors.
Q. Where can I get additional information about IRS e-file?
A. You can visit the IRS website at www.irs.gov - or feel free to call our offices to ask us questions as well
Q. If I owe, how do I pay my taxes electronically?
A. You can e-pay by credit card. If you e-pay by credit card, you delay out-of-pocket expenses and may earn miles, rewards or money back from you credit card issuer. Payment by check or money order is acceptable. If you do owe money, we will provide you with a voucher and addressed enveloped to mail your check into the IRS. Your return can be e-filed at any time before April 15, and then you can mail your payment in later - as long as it is postmarked on or by April 15.
Q. What do I gain by using IRS e-file?
A. Accuracy! Security! Electronic Signatures! Proof of Acceptance! Fast refunds with direct deposit! Electronic Payment Options! Federal/State e-file! Only IRS e-file offers these advantages.
Q. What is an Authorized IRS e-file Provider?
A. An Authorized IRS e-file Provider is a tax professional or firm that is accepted into the IRS electronic filing program. One type of Authorized IRS e-file Provider is an Electronic Return Originator (ERO). An ERO is a person or firm that taxpayers entrust with tax information for the purpose of filing income tax returns electronically to the IRS. The Tax Store is an ERO.
Q. What is the Personal Identification Number (PIN)?
A. The PIN allows you to personally sign your electronic tax return using a five-digit number. The PIN serves as your signature on your tax returns. Our firm will have this form all filled out for you when you come to pick up your returns or they are mailed to you. All we need you to do is sign the form for us to keep on file and then we are able to e-file your returns.
Q. Can I pay my balance due by phone or Internet with a credit card if I'm a 'married filing joint' filer?
A. Yes. Just be sure to enter the Social Security number of the first taxpayer listed on the return's pre-printed mailing label or postcard. This is usually the taxpayer listed on the return.
Q. Do I really get my refund faster if I e-file?
A. With IRS e-file you get it back in half the usual time. It's even faster and safer if you have your refund deposited directly to your bank account in 10 days or less. Ask your Authorized IRS e-file Provider for the estimated date of deposit.
Q. Should I wait until April 15 to file electronically if I owe taxes?
A. No. You can e-file your return as soon as it is completed. Then send your payment in on or before April 15. The Tax Store will give you a payment voucher and addressed envelope to make sure it goes to the correct IRS center.
Q. Do I have a greater chance of being audited by the IRS if I use IRS e-file?
A. No. The chance of an audit of an e-filed return is no greater than with a paper return.
Q. How do I know that the IRS really has my return?
A. The IRS notifies your Authorized IRS e-file Provider within 48 hours of transmission that your return information was received. If the IRS detects any errors, it sends a message back to our firm indicating the error. Our firm will correct the error and notify you to let you know what the error was. We will then retransmit your returns to the IRS.
Q. Can my state tax return be e-filed with my Federal return at the same time?
A. There are 37 states and the District of Columbia currently participating in the IRS e-file program. Some of these states have returns that can't be filed electronically unless it is with the Federal return. Other states will be filed as independent states - meaning that they can be filed without the Federal return attached to it. The Michigan return needs to be filed with the Federal return.
Q. If my return is electronic, how do I sign it?
A. The most convenient way for you to sign your electronic return is to use a Personal Identification Number (PIN). It's completely paperless! Our firm has you sign a document that shows that you agree with the numbers in the return and is allowing us to e-file your return for you. The signed forms stay at our firm for four years.
Q. What if I owe and cannot pay the full balance due on my taxes?
A. The tax preparation software used by our firm can allow you to make partial payments. In this case, you can make a payment for less than the balance due amount on your return. If you cannot pay in full by April 15, you can file Form 9465,Installment Agreement Request.
Q. What is a Form 9465, Installment Agreement Request?
A. This form is available through our firm. An approved Installment Agreement allows you to make a predetermined series of partial payments after April 15. Regardless of how you pay, you are responsible for paying the amount of tax due by April 15 of each year or you will be subject to late payment penalties and interest.
Q. What happens if my return is filed electronically, I am receiving a refund, and I owe taxes from previous years?
A. The amount owed on back taxes is automatically deducted from your refund just as if you filed a paper return.
Q. I prepare my own tax return, why use your services?
A. Many times you are correct and you can prepare and file a return. But did you take all the deductions? Did you take the available tax credit? Did you go to a tax course in the past 12 months? We find that many returns can be self-prepared but many are lacking in all the deductions that can be taken.
Q. How can I contact the IRS about my tax return?
A. You can call the IRS at its toll-free line at 800-829-1040. To be ready to respond, you should have your Social Security number, your filing status and your refund or payment due amounts. Allow between 4 to 6 weeks before you contact the IRS.
Q. How can I obtain a copy of my tax return?
A. Of course, we at The Tax Store supply you with a copy and if you lose it, we will furnish you with another copy. If we did not prepare the return, and for some reason you do not have a copy in your possession, you need to file form 4506, Request for Copy or Transcript of Tax Forms, with the IRS service center where you filed your missing return.
Q. What records do I need for you to file my tax return?
A. We at The Tax Store will provide a data collection form for your convenience, which contains most of the items that you will need. However, a detailed record of your income and expense items will be required to support our entries and in addition, a record of any other items reported on your tax return. Since totals of each category of income and expense will help us save time and cost, it is the preferred method of information submission.
Q. Can I deduct child support payments?
A. No. Child support payments are not deductible, because they represent a pre-existing legal obligation to support your children.
Q. In a divorce who is entitled to the child dependency exemption?
A. The parent who had custody of the child for the greater part of the year is generally treated as the parent who provided over one-half of the child's support and will claim the exemption if other tests are met. Custody is usually determined by the divorce, separate maintenance or custody decree or agreement. If no decree or agreement establishes custody, then the parent who had physical custody for the greater part of the year is entitled to the exemption.
Q. What is the most tax efficient way to save for my children's education?
A. The educational savings area is very complicated. We at The Tax Store recommend that taxpayers seek professional assistance. Although a Section 529 plan, under the 2001 Tax Act, is an extremely flexible and tax effective plan, there are other plans to be considered. Also when considering any educational savings plan, consideration should be given to the impact on financial aid qualification requirements.
Q. What is the best way to borrow for consumer purchases?
A. We at The Tax Store generally discourage borrowing for consumer purchases unless absolutely necessary. However, we recognize that often there is no alternative. When it is necessary to borrow for large consumer purchases, we recommend a home equity loan. Interest on home equity loans are tax deductible, while interest on consumer loans, such as car loans and credit cards, are not tax deductible.
Q. Do you handle Section 1031 Tax-Free Exchange Transactions?
A. Yes. We handle all types of tax-free exchanges, such as: Four Party, Delayed, Reverse Starker, Diversified, Built to Suit, Rehab to Suit and Consolidated. We also handle exchanges involving operating businesses, LLC, Partnerships and Alternative Methods of tax-advantaged disposition of property such as Charitable Remainder Trusts.
