How To Select a Tax Preparer

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  It’s everyone’s favorite time of year again - tax time! Although you may not enjoy the process, it is a necessary evil. Hopefully finding the right tax preparer can make it less painful. Nearly 2/3 of all taxpayers use a tax preparer. However, it still may not be appropriate for you. There are multiple free filing software options accessible through the IRS’s website if your income is below $57,000, and 70 percent of all taxpayers make less than $57,000. But if you’re not in this category, then it may be prudent for you to hire a professional. A good tax preparer will help you stay in compliance with the law as well as minimize taxes for your specific set of circumstances. The IRS has some important minimum requirements you should look for in a tax preparer at http://www.irs.gov/uac/Ten-Tips-to-Help-You-Choose-a-Tax-Preparer. However, there are some other characteristics that could be important to you as well. When selecting a preparer it is important to: 1)    Be an … [Read more...]

Affordable Care Act – Beware of the Medicare Surtax for High Income Individuals

Patient Protection and Affordable Care Act

By Stacey Gorowitz, CPA, MBA  Although the Patient Protection and Affordable Care Act was signed into law in 2010, many continued hoping the health care law would go away. We must now accept the tax implications it poses and plan accordingly.  In general, individuals with Adjusted Gross Income (AGI) greater than $200,000 should pay close attention. The two surtaxes, which will be imposed on higher-income taxpayers, effective for tax years beginning after December 31, 2012 include: 1) Medicare Surtax on Earned Income – In addition to the current 1.45% Medicare portion of payroll tax there will be a new 0.9% surtax applied to taxpayers who receive wages or self-employment income in excess of $200,000 for single and $250,000 for joint returns.  This surtax is not imposed until after a taxpayer crosses the earnings “threshold”. 2) Unearned Income Medicare Contribution – 3.8% Medicare tax is imposed on the lesser of net investment income or Modified AGI (specifically defined by … [Read more...]

Financial decisions today impact tomorrow: What they didn’t tell me in medical school

I majored in accounting and learned about numbers and their interactions; not much time was spent on marketing. As a medical student, you were taught about biology, diseases and their treatment but not much about the finances. After working with doctors who are mid-way through their careers, I wish I could have spoken to them when they were first starting out. Here are a few non-medical lessons that should be covered in medical school: 1)   Control expenses: As a physician, you will have more income than most people.  However, you will also have more expenses; your student loan debt is likely substantial.  This number is too big for most people to grasp, so they take the “head in the sand” approach. But there is a better way! Consider the ratio of your monthly income to the monthly payments for your school debt, house payments, credit card bills and taxes. A monthly overview gives a better perspective than totals. For example, a $150,000 salary yields $12,500 monthly. … [Read more...]

Is My Accounting Firm Trying to Fire Me?

By Stacey Gorowitz, CPA, MBA With the continuing mergers and consolidation in the accounting industry, if you suspect you’ve become a little fish in a big pond, you’re probably right! As accounting firms move upstream and target larger prospects, they do not want to offend their existing clients by telling them that they are no longer an “A” client and it’s time to move on. Your firm may not directly tell you that your work is no longer a good fit for their firm. Even if you have a long relationship with your existing accounting firm, they may be trying to fire you if… 1)    They do not communicate with you throughout the year or return phone calls and emails in a timely manner. 2)    You feel like you’re training the person preparing your return because every other year there is a new staff person you have to educate about your business ,industry and the history of your family’s tax transactions. 3)    You’re concerned about the quality of the work because it feels … [Read more...]