Fishback Tax can assist with audits of returns that we have prepared. Rates will be considered on a case-by-base basis due to varying characteristics and classifications. Contact info(at)fishbacktax.com for more details.
Fishback Tax is linked to clients through telephone, email, and mail. Not having traditional office space, complete with receptionists and waiting areas, is part of what helps keep costs down. Fishback Tax matches the quality tax preparation of the past while integrating the modern technology of today. Services are available to all US citizens.
Tax season officially started today. If you're reading this you're probably wondering whether you "qualify" as someone whose taxes are complicated enough to justify hiring a CPA. Here are some things to consider when deciding whether a CPA is right for you:
1. Are you self employed?
2. Do you have children or dependents?
3. Do you own property?
4. Do you have investments or contribute to a retirement account?
If you answered yes to any of these questions, then you could benefit from having a CPA look at your situation to make sure you're getting maximum tax savings. Now comes the question about price...is the cost of a CPA worth the amount you'll save?
A traditional brick-and-mortar CPA typically starts at around $300 to complete your taxes, which may not make sense for many people. There is another option though: the online CPA, who charges significantly less for the same level of service.
So, back to our original question: should you hire a CPA to do your taxes? The answer is most likely yes, if you can afford it. And thanks to online CPA firms like Fishback Tax, you probably can.
Don't let this be you.
Fishback Tax is an online CPA firm, built for the millennial generation. You get the same personal, quality CPA service as a traditional brick-and-mortar CPA firm for less.
Click our "About Us" tab for more information. Click our "Get Started" tab to send us an email.
Single: unmarried, divorced, RDP, or legally separated (according to state law)
Married Filing Jointly: married couple filing together, even if only one spouse had income during the tax year
Married Filing Separately: a married couple choosing to file their own returns; may minimize tax liability over MFJ
Head of Household: unmarried, having maintained a principal residence for self and a qualifying dependent
Qualifying Widow(er) with Dependent Child: generally, the surviving unmarried spouse (when spouse died within the prior two tax years) with dependent child(ren) who also maintains a principal residence
If married, divorced, or legally separated at any time during the year, the new arrangement is considered for tax purposes as having been true for the entire year.
Also, a widow(er) may file as married filing jointly in the tax year of the death of their spouse.
A common question we receive relates to interest and penalties, and specifically on how to avoid them. Interest and penalties can be assessed even if the taxpayer is to receive a refund. Thankfully, the IRS has established "safe harbor" rules that ensure that, as long as the full tax liability is timely paid, interest and penalties will not be issued on the Federal level. If a taxpayer has been penalized, they should consult their CPA, being sure to mention the first-time abatement penalty waiver (FTA). If funds are unavailable, other options include an installment agreement or an offer-in-compromise.
The options to avoid interest and penalties are:
Withhold at least 100% of the prior tax year's tax liability in the current tax year;
Withhold at least 90% of the current tax year's tax liability in the current year;
or Have an ending/unpaid tax liability in the current year of less than $1,000
If considered a "high earner", defined as having AGI above $150,000 ($75,000 if MFS), the first rule above is changed to 110% of the prior year's tax liability in the current tax year. The other two points are unchanged. Farmers and fisherman change the 90% rule above to 66.67%, and are also subject to the "high earner" rule.
Taxpayers may be exempt from withholding if they have no tax liability in the current tax year, and they expect to have no tax liability in the next tax year. Exemptions are issued for one year only, although they may be renewed. Note that exemption relates to income tax only, with Social Security/Medicare tax paid as wages are incurred. Exemption, along with withholding, is completed on the Form W-4, which can be adjusted during the tax year.
Estimated taxes are paid when income tax withholding will be or is insufficient. Payment dates are as follows, subject to the regular weekend/holiday convention:
Jan 1-Mar 31: due April 15
Apr 1-May 31: due June 15
Jun 1-Aug 31: due Sept 15
Sep 1-Dec 31: due Jan 15 of following year
Although dependents claimed on the tax return may be a qualifying child (see our related post) or a qualifying relative, certain credits and deductions may be taken for qualifying children only (e.g. the Child Tax Credit).
A qualifying relative is a person that meets ALL of the following conditions:
Is not a qualifying child for any taxpayer
Has gross income of under $3,900 for the year
Has at least half of their support provided by the taxpayer
Is a relative of the taxpayer (see below) or lives with the taxpayer the entire year
Does not file a joint tax return
Is a US citizen/resident/national, or is a resident of Canada/Mexico
A relative of the taxpayer that is allowed to not live with the taxpayer but may be claimed as a dependent include:
Child, stepchild, foster child, or a descendant of such
Brother or sister, including half- and step-brothers/sisters
Father or mother, or an ancestor of such (but not a foster parent)
Step-father or mother
Son or daughter of a brother or sister, or half-brother/sister
Brother or sister of a father or mother
In-laws: son, daughter, father, mother, brother, sister
Persons claimed are considered to have passed the 'living with' test if the absence is due to illness, education, business, vacation, or military service.
Exemptions are subject to phaseout above certain income levels (see our related post).