A Low-Risk Way to Pick an Accountant

Sterck Kulik O’Neill accounting group invites prospective clients to a free introductory meeting in our office. Why?

Lots of professionals charge the first time you meet them because they think their time is so valuable that they never want to give it away.  If you go to talk to a surgeon, they will ask you to pay for your first appointment, even if you decide you don’t like them and don’t want them touching your body! These professionals don’t want to waste time on non-revenue producing activities.

But, we think you should be able to meet us and see if you’re comfortable with our knowledge, personalities, way of talking, and our procedures before you engage us. So, we ask that you come in, explain to us what services you’re looking for, and see if you like interacting with us. For free!

Do we understand the problem you’re bringing to us? Do we talk so you understand us? Do you like our ideas?

Partners Charles and Geoffrey

CPA’s Charles Sterck and Geoffrey Kulik

So you can find out the answers to these questions, we offer prospective clients a free introductory meeting with one of our partners. Usually the first meeting lasts between a half hour and a full hour. You and the partner will talk about your overall financial situation and the pressing issue that made you decide to talk to a CPA.

We’ll ask you to bring in copies of your most recently filed Federal tax return, if you’re looking for tax help. Or, copies of the business financial statements you’re getting now, if that’s the work you want us to do. Basically, the partner is looking for information that will let him estimate how many hours it will take us to do what you want. Then by the end of the meeting he will give you an estimate for the engagement.

We want you to know the cost of the work you need before you spend any money.

Oh, yeah. The free meeting is not a free hour of accounting services! It’s an opportunity for you to decide if you want us to be your ongoing CPA. Sometimes I have to disappoint people who tell me that they want their free hour of asking a CPA questions about their taxes and financial life.

Your time is worth a lot, so we understand that by coming to an introductory meeting you’re risking your time. We appreciate that. But, we won’t charge you while you decide if we are the accounting firm for you.

Plus, we will talk to you about your accounting needs before we set up the in-person meeting. In our phone conversation we will confirm that we do the work you’re looking for and think we might be a good fit. If you’re looking for a tax preparer, but your only income is W2 salary income, we will tell you we probably aren’t a good choice, and we’ll suggest some more cost effective alternatives. Or, if you really want to engage a specialist accountant who only handles art supply businesses (or whatever), we’ll tell you up front that we don’t meet your qualifications. We will try not to waste your time, if we aren’t the accountants for you!

So if you are considering establishing a relationship with an accounting professional, give us a chance. We think we give you a low-risk way of seeing if we are the right CPA firm for you.

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Why We Won’t Open Your Attachment or Click on Your Link

Dear Geoffrey,
I am attaching a PDF with my W2 information for my tax return.

Dear Sterck Kulik O’Neill,
Can you tell me how much it would cost for you to do my tax return. I am sending a PDF copy of last year’s return with this email.

Hey, Charles. I have uploaded my tax information to http://bit.ly/my2017taxinformation .

A few times a month we get messages inviting us to open an attachment to an email or to click on a link where we are supposed to get information a client (or prospective client) has sent us.

We don’t click to open or follow! Even when the messages come from an email address of a client we know.

Few of the messages we get out of the blue — from people we know and from people we don’t know — are legitimate! They are Spear Phishing attempts. Spear Phishing attackBad guys stuff malicious software in the PDF they are attaching in the hopes that our anti-virus software is weak or out of date. Or, they set up a web page that tries to download evil code to infect our computers, probably when we think we’re clicking to download the promised information.

They can address us by name by picking off our identities and email addresses off the Internet. They can pretend their clients of ours because they’ve broken into a client’s computer and are accessing their list of contacts.

These guys know their business and are hoping that someone will let their guard down for just a minute! And, the busy tax season time, CPAs are distracted. We are much more likely to CLICK without thinking.

But, so far, no one in our office has succumbed to the temptation to click. We keep telling ourselves that our clients know not to send sensitive information by email —  the data could be read and the ripped off by someone monitoring along the way. Moreover, we provide our clients with a secure portal to upload and download their information.

So, if you send us an email message that suggests we open an attachment or visit a link, we won’t click! (Really, we will try very hard not to click!)

Usually we don’t even respond to emails we think might possibly be from scammers. If the message is from a client, we may call and see if they really sent the message or suggest that their email has been hacked.

Of course, you should not email your social security number, private financial information, or even credit card numbers to anyone as a normal Word document, PDF, or plain text. It’s just too easy for a bad guy to monitor the Internet and help himself to your private info.

But, even if you’re willing to take the risk of identify theft by mailing your tax return to us, to your mortgage broker, or to your attorney, a smart person won’t open the document unless you’ve just talked to them and told them what is coming. (And, when you give your notification, they should tell you to use a secure transfer method!)

So, use our portal to send information or contact for other ways to get delicate data to us!

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Perceived Indifference Disease

A neighborhood restaurant we went to nearly every week for several years got a new partner, a long-time bar tender who bought into the business. We’d been spending at least $5,000 a year there, going mostly on their slower nights. We knew all the staff, and had chatty, comfortable conversations with them. We thought we were good customers.

I Don't Care SignSoon after taking over, the new partner changed the music to something I didn’t like. Loud and screechy, in my humble opinion. In a low-key manner I asked if he’d switched the playlist. After he said he did, I said — politely I think — that I thought the new music was not as good as what they had been playing. He responded, “Well other people like it,” and abruptly turned away.

Okay.

He has every right to play whatever music he likes in his restaurant. But his comment and attitude said he didn’t care about me. I paid for the one drink I’d just ordered and left the restaurant without eating.

That conversation was in January and we haven’t been back. We simply disappeared from their list of customers.

I’ve told this story to incredulous friends who know how loyal we were, and they’ve moved birthday parties and dinners away from that restaurant to other spots in the neighborhood. So, the new partner’s interaction with me — and the restaurant’s failure to follow-up — has cost the business at least $7,500 in 2017 revenue.

I am not looking for sympathy or commiseration at being slighted. (Well maybe a little sympathy!) But, mainly I’m telling this story because it illustrates one of the dangers to your business that we explore with you in our business development sessions: Perceived Indifference Disease.

When your customers perceive that you don’t care about them, you’re in danger of losing them. You may never know why they stopped coming.

Our business consulting sessions help you uncover how your interactions with your clients may leave them feeling that you don’t care… even when you care very much!

If you are wondering why you’re not getting the repeat business you deserve, we can help you explore ways of assessing your customer’s feelings toward you and seeing if they feel loyal or repelled by perceived difference.

Indifference word cloud concept with disinterest ignore related tags

Contact us to learn more about the business development options we offer in addition to our traditional accounting services.

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Phony Treasury Agents are Calling YOU!

Tax Collection Scam warning posterThey’re back!!!!!

Last week’s message on my cell was an automated voice from the “legal department at the US Treasury” demanding that I call them about my tax fraud that they were investigating.

We’d hoped that the recent bust in India of a guy suspected of running a swindling call center that made similar calls would stop the crooks for a while.  (Story on the alleged crook’s arrest.)

The recorded messages is so poorly made that most people would suspect that it’s a fake.

Give it a listen!

The bad recording is good technique, though. Anyone scared enough or ignorant enough to think the recording is really from the government is a better than average mark for the crooks.

In case you have any doubt about this recording — or about a more professional-sounding call, either live or recorded — the Treasury Department does not call anyone about taxes due. The Internal Revenue Service (IRS), the actual tax collection agency, does not call anyone about taxes due. They also don’t email you threatens about overdue taxes!

The IRS will send you a notice via the United States Postal Service.  That is how you learn that the government is questioning something in your return. And, the conversation never starts out threatening you with jail!

Geesh!

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Don’t Fail to File… Even if it’s Only an Extension

Next appointment April 21st graphicOur team is working seven days a week to prepare taxes and to respond to other accounting emergencies of our existing clients. The partners want to make sure that the team is busy, but not crazed, and are now scheduling meetings for prospective clients after April 20th.

Why April 21st or later? Because the normal deadline, April 15th falls on Saturday, there are holidays in various jurisdictions on Monday, the national tax deadline is April 18th, our office is closed April 19th, and the partners are already booked on April 20th! Whew!

We are happy to schedule an appointment for new clients, but it won’t be before the tax deadline day. If you’re looking for help in preparing your return, give us a call. But, also stay in the good graces of the IRS by submitting an extension request.

Cannot File Your Return — At Least File an Extension

If you haven’t prepared your return and cannot get appropriate help by the April 18th deadline, we strongly suggest that you file an extension with the IRS. The IRS heavily penalizes late filers, but you can get extension to file automatically if you ask for one by April 18th.

Download the Form 4868 from the IRS website, print it, fill it out, and mail it so it gets postmarked April 18th! You can also electronically file an extension request on IRS page in the link.

Filing an extension request will allow you until October 16, 2017 to submit your completed return. You are still required to pay any balance you owe the IRS by April 18th, so if you think you owe taxes make an estimate of what you should pay and send in a check with the extension form.

Whether you plan on getting professional tax help or do it yourself, file the automatic extension request today!

The penalty for not filing is nasty. If you file more than 60 days after the due date, the minimum penalty is $205, or if you owe less than $205, you’ll be penalized 100% of what you do owe.

The penalties for failing to pay by April 18th are not so bad, generally 0.5 percent of your unpaid taxes per month, up to a total of 25%.  That is a relatively small penalty, especially compared to the penalty for not filing!

Remember…
The IRS grants an automatic extension to file your tax forms, but the law requires that you pay what you owe by April 18.  So, if you think you may have to pay the IRS this year, enclose a check to cover your estimated shortfall with the extension form.

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Tax Planning for 2017

Want to talk to a CPA about how to handle a big windfall in 2017?  Estimate what you’ll pay in taxes if you exercise those stock options? Do normal, intelligent tax planning?

Unhappily, 2017 is not a normal year.  Donald Trump and the Republican party campaigned on the promise to make major changes in the tax policy.

The victors in the election campaigned on the promise that they would cut the top tax rates.

They wanted to simplify the tax code, too. What “simply” means is not certain, but Mr. Trump’s proposal included the idea of limiting some long-cherished deductions.  Charitable deductions would be capped at $100,000 per person, for example.

Man stares into a crystal ball to see the futureUnfortunately for planning purposes, we do not know yet if cutting the tax rates and adoption of the other plans put forth by Mr. Trump will be done all in 2017. Moreover, the campaign promises of the Republicans in Congress differ from what Mr. Trump said he wanted to do.

Which changes will pass? When? What other ideas will be implemented?

Our crystal ball is cloudy!

Realistically, the answers to these questions will develop during 2017.

Unfortunately, actions that Congress takes in December will affect the financial actions you had to take in January.

What we — and all other tax professionals — can do now is:

  1. Advise you what the tax consequences of your actions would be if the 2016 laws remain in place.
  2. Advise you what the tax consequences of your actions will be as individual changes are made to the tax laws in 2017.
  3. Speculate along with you about what other tax law changes may be made and what the effects of those changes will be.

Speculating is not a comforting alternative to solid, professional planning.  But, it is all we all can do until the ultimate shape and scope of tax law changes is known for sure.

American Flag with What's Next

We suggest that if you can postpone making major financial decisions that might be impacted by new tax rules, do put off taking any action until Congress acts!  Unless you have need for the cash generated by the exercising of stock options, for example, consider delaying exercising the options for a while.

Most years we suggest that you contact us early in the year to talk about potential major financial decisions.

In 2017, we will still be happy to talk with you and give you general advice. As the year progresses, it’s likely that we will be able to give tax planning advice with increasing certainty.

Probably!

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2017 Opens a New Portal

One of the services we have updated in preparation for Tax Season is our client Portal.

Portal is a free client service that lets them exchange sensitive information with us over the Internet safely.

Secure safe portal

CCH Axcess Portal is the service we use.  CCH is one of the top makers of software for accountants. Their Portal service provides a way to exchange encrypted information via a secure data center. The clients’ information is stored locked up in a spot where physical access is tightly restricted, and the duplicate remote storage guards against loss from nature disasters like earthquakes and local tragedies like theft and building fires.

Why don’t we just email clients their tax returns?

Email is NOT secure!  Email is typically sent through the Internet without encryption. Someone with a monitor on the Internet could capture the stream of the email and rip off your information. In addition, most people don’t safeguard their email accounts that well. They keep the email program open when they are at lunch, and coworkers wandering by can “accidently” see confidential documents and messages open in email.

Of course we still love doing business face-to-face.  You can bring by your sensitive documents and drop them off in person. If you have the time!

But, if you sometimes need to exchange information instantly, let us set you up on Portal.

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How Trump’s Election Changes Your Tax Planning

Donald Trump has promised to drastically lower taxes next year, and with Republicans controlling Congress, he’s likely able to get some or all of the tax changes he wants passed.

Most of the proposals call for individuals and businesses to pay less, maybe much less, in 2017 (or 2018, if Congress is slow to act) than they would under current law.  Independent analysis of many of the proposed changes show that well-off individuals will benefit significantly from the lower rates proposed. NPR reports that, according to Lily Batchelder, a law professor at New York University and a visiting fellow at the Tax Policy Center, people earning a million dollars will get an average tax cut of $317,000.

Tax deduction - word cloud conceptThe plan also lowers the business tax rate to 15% from 35%.  US-based manufacturers may elect full expensing of plant and equipment costs, although selecting this approach means they will give up their ability to deduct interest expense. (See Donald Trump’s campaign website press release.)

President-elect Trump and Republicans in Congress also want fewer people to have to itemize deductions.  They plan on raising the standard deduction rate to $15,000/$30,000 for a single person/married couple (Trump’s plan).  At the same time, they would cap deductions at $100,000-single/$200,000-married (Trump’s plan).  In addition, some Republicans have suggested eliminating the deduction for state and local taxes, and the mortgage interest deduction may be scrutinized.  (Read the Wall Street Journal for more details.)

Of course, unless you have a fully-functional crystal ball, there is no certainty that all/any of the changes will occur. But, IF you believe that significant changes will be made to the tax code, then you should take action based on what you think is likely to change.

We don’t have any fortune-telling ability, but here’s what we think is reasonably likely.  If you agree, consider accepting our recommendations!

Assumptions: The 2017 tax rates will be lower than the 2016 rates for both business and businesses.   Some change to deductions will be implemented that will increase the standard deduction amount and limit itemized deductions.

man wearing a suit pointing the finger to the word taxes written in the foregroundRecommendations:

  • Postpone the recognition of as much income as possible until after December 31st.  If possible push off the closing dates of profitable sales, receipt of bonuses, and all other activities that create income.  You’re likely to be taxed at a higher rate this year than you will next year.
  • If you are a US-based manufacturer, postpone plant and equipment purchases and upgrades into 2017 when you’ll be able to expense them in a single year.
  • Give to charity and pay your property taxes in full in 2016.  Many of our clients will run into the $100k/$200k talked-about limit for itemized deductions.  If you’re close to that amount, give everything you can in 2016 where you’ll get full credit for your gifts and payments.  Even if your itemized deductions are much smaller, give and pay in 2016 when you’ll get credit for each dollar.  In 2017 you may not want to itemize and instead you’ll benefit from the new, higher standard deduction rates.

You have only until December 31st to take action to take action to lower your 2016 tax bill and to plan for 2017.  Do it!

Please contact us if you’d like help.  Maybe all you need is a check-in phone call.  Or, maybe your situation is complicated and you’ll want a full tax projection.  We are happy to find out what you need and work with you so that you pay the lowest amount of taxes legally possible.

And, of course, all of this speculation.  Who knows what President Trump and the new Congress will really do?!!

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Upgrading Our Technology to Serve You Better

Bionic Woman of the FutureOur office is moving to a secure, cloud-based server this week.

We have contracted with Xcentric, a service that only works with accounting firms, to host our applications and store our data.

Xcentric uses best practices to safeguard all information.

The American Institute of Certified Public Accountants has given Xcentric a Service Organization Control report that provides independent validation that Xcentric’s security controls are in accordance with the applicable Trust Service Principles and Criteria (SOC2). This means that our data — and your data — will be safe.

Actually, with a cloud-based approach your information will be better defended against crooks or loss than it has been on our local systems. Xcentric has two secure, geographically distant, US-based, data centers that provide top protection against theft, fire, and natural disasters.

Our partners also believe that the move to the cloud will let our professional staff spend more time doing accounting work and less time being ersatz IT managers.

We are excited!

During the switch over, the firm’s IP addresses will be changing and connections will be disrupted.  There will be times when our email and phones won’t work or won’t work correctly.  We ask that you be patient and try us again in a few minutes, if you encounter any problems.

If you have an urgent need to reach us when our systems are in transition, send us a message at [email protected].  We will monitor that address during this week of change!

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They’re Not from the Government, and They’re Not Here to Help

Sometimes people don’t file their taxes and ignore the tax collector’s notices. To get your attention, the government will create a wildly high estimated tax bill and put a lien on your property.

When we are contacted by clients who have had liens put against them, they are horrified. They were busy, their finances were too complicated that year, or they were worried about the size of what they might owe and they just couldn’t get themselves to deal with the problem.

We — and most reputable accounting firms – can resolve the non-filing complaint, adjust the tax bill, and, if needed, work out a payment plan for the taxes.  The steps to resolution are low-key, routine, and straight forward.

  • First, we help you file your taxes for the year in question.
  • The lien against your assets will be lifted when you pay the new, and probably much lower, tax bill.

Clearing up the problem isn’t painless.  You’ll have to pay for the taxes owed on your actual income, penalties, interest, and for the tax preparation. Ouch! But, the path to fixing the problem is clear and relatively drama free.

Unfortunately, we have discovered a vulture industry that goes after taxpayers who have trouble with the IRS or state tax collectors.  A client shared with us the blizzard of come-ons he received once the tax lien against him was recorded and made part of the public record.

Scam Notice Square Collage

Sample of Notices Received. Click to see more.

These notices mimic official government notices — they’re not!  

They are designed to get scared taxpayers to call a phone number without thinking about who they will be talking to.

The language and style they all use is designed to trick you into believing you’ll be talking directly to the government.

The language each of these companies use is remarkably similar. Everything is URGENT, or FINAL.  Several of the notices give a made-up case or file number… a number that has nothing to do with what the real tax collectors are using.  One company says that they’ll get the $377,548 tax bill reduced to $79,509.60… another suggests if you work with them the final bill will be $18,499.85. The warn, if you don’t respond to their notice, your wages will be garnished and bank accounts seized.  (See a larger photo of the frightening notices this one client received.)

A couple letters say that they are from government-sounding organizations such as “The Taxing Authority” or “Tax Group”.  Others don’t tell you who the letter is from… you’re supposed to assume that it’s from the government. A couple even came in envelopes with the official-sounding warning:

$2,000 Fine or 5 Yrs. imprisonment or both for any person who interferes with or obstructs the delivery of this letter or otherwise violates Sec. 18 United States Code 1702.

Doesn’t this warning apply to all mail tampering?!

Some — but not all — of the letters say that they are NOT from an official government agency.  But, those disclaimers are in small type and designed to be overlooked.

We don’t know how any of the companies who send the breathless, fear-mongering notices plan to help solve the taxpayers problem.  But, we really don’t like the attempt to trick people into thinking that they are dealing with a government agency when they are not.

Our advice to people who receive tax notices or who have tax liens placed against their assets: call us or another professional tax preparer who doesn’t try to get new clients by tricking them or making them crazy frightened!

 

 

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