Broker Error (SEP)

[Mark Goldberg]

My clients Broker failed to move $10,000 from his brokerage acct to his SEP before the filing deadline. Can the Brokerage House fix this error, like they can when they mess up a rollover?

[Gene V]

Broker error

Can the Brokerage House fix this error, like they can when they mess up a rollover?

I don’t know--- An client call yesterday and said that her broker showed $2,000 in her IRA for 2005 and $1,000 for 2006, should have been $3,000 for 2005, they said they could not fix it. I went and amended her 2005 and showed the $2,000. I told her she should have her broker pay for the amended return and any interest or penalty from the IRS.

[Jiggers]

Broker Repair

The brokerage houses and bank CAN fix their errors. You just have to insist that they do it. I have been through this before and you have to be agressive. You may have to go up higher in the chain of command to get it done, but it can be done.

They can make the corrections even if they are one or two years old. That is what that little box at the top of 1099's labeled "CORRECTED" is for. What else? Window dressing?

I would not amend the return and have the client pay any additional tax if there was indeed an error by the brokerage house.

Now, for future reference, and as a service to your clients, you should require them to bring a copy of that contribution in to you so that you can verify that the bank/brokerage house did it correctly. Even if it is after April 15th.

[Gene V]

The brokerage houses and bank CAN fix their errors

I agree, but I think it’s the client responsibility to have the brokerage firm correct the error.

Now, for future reference, and as a service to your clients, you should require them to bring a copy of that contribution in to you so that you can verify that the bank/brokerage house did it correctly. Even if it is after April 15th.

I don’t think that would be necessary for them to bring in the paperwork after April 15 or after I file their return to verify that the bank/brokerage house did it correctly. (Yesterday was the first times in over 23 years that I had a brokerage firm not credit the correct amount—you really don’t know what the client told the brokerage firm.). Most of my clients have the paper work with them that shows how much they contribute to their IRA’s. If they don’t, I’ll take their word for it.

Jiggers--good luck in finding some good help.

[Jiggers]

Good Help?

Jiggers--good luck in finding some good help.[/QUOTE]

Thanks,
I did hire a part-time person that I knew well. He is an accountant for a large local corporation and is planning on retiring when he reaches 66 next year. I thought that maybe he would be good as he did tax returns in his own business several years ago. That was a mistake, too slow, and his time ate up my profits. These were on the 1040A returns. Got rid of him in early March as I was having to spend too much time reviewing his returns.

After lots of consideration, I am handing off a large amount of my monthly bookkeeping clients and all related tax, payroll, sales tax, etc. work to a local CPA. The staff person that did my monthly write-up and other stuff will go to work with the CPA.

That leaves me with 6 monthly clients and still lots of tax returns. But, less work from about July on!

[JoshinNC]

6 monthlies?

What services are you providing (books, payroll, both) and what is your average rate for doing so? I just think going down to 6 monthlies would be too low for my practice. But, my tax practice is still growing (did 125 1040's, 10-15 1065, 1120, etc.) this past year. You probally do many more returns than I do, so that may be why? Just wondering.

[Jiggers]

Bookkeeping Clients

These 15 clients will generate about $60,000 in monthly bookkeeping, payroll, income tax, etc.

With extensions, the remaining bookkeeping, and fiscal year corporations, I have enough to do.

I put in 2,400 from May 2005 thru Apr 2006. Most people work 2,000 hours per year. That means I work 10 more weeks than normal!

I am tired. This will now be a mom & pop business.

Regarding fees, charge until the client complains, and then go up 5% more!

[JoshinNC]

that makes sense

quick math says that's about $333 per client per month. Sounds about right. Got any clients in the NC or SC area you want to hand off? J/K.

Take a rest, you've earned it!