Our CPA misled us

[dsi]

So, true. Most of life's problems can be attributed to some kind of communication breakdown.

[thomtax]

breckgirl5

Thanks, Geekgirldany... this is fair.

Keep in mind that your husband may not have told things the way that they were told to him. Many times I have had (not just in the tax business) a client that I told - If this, then this is the case. A couple of days later when they are both in, the one I talked with will be telling the spouse about something. When I say, thats not what I said and then repeat the conversation, I usually get "Oh yeah, I remember now. I knew it was something like that."

There is nothing intentional, just hearing what they either expected or wanted to hear without the cautions that went with it.

[breckgirl5]

I agree with everyone else who has posted.

I think what your husband needs to do is ask what made him calculate in April you would have a refund versus you now owe. He should give you a answer that makes sense. There maybe something left out on the CPA side or your side. He may have been doing a estimated by going on previous years numbers and then found something else that changed the current year. It could just be a mistake.

Just give the CPA a chance to explain.

Thanks, Geekgirldany... this is fair.

[breckgirl5]

How come the S Corp. had to pay taxes? The profit or loss from the corp. passes through
to the owner(s) to be reported on their personal return.

From what my husband tells me, they file a return for the S Corp -- just to show all deductions/profits/losses... however the S Corp never ends up owing anything... all of that gets passed through.

[breckgirl5]

Veritas, don't judge when you don't know

But if the only way you could afford a vacation is with a tax refund, you might take a look at your priorities.

You might want to consider not JUDGING people when you know nothing about them. Taking vacation/volunteer trips IS one of my top priorities in life. It's a necessity for me. However, I've sacrificed many other things. For example I put 20% of my income into retirement savings every month. I'm also not having children to save the $250K per child over the course of a lifetime. All of this I do because traveling and volunteering with children in 3rd world countries are my two top priorities in life.

[Bird Legs]

Another Question

How come the S Corp. had to pay taxes? The profit or loss from the corp. passes through
to the owner(s) to be reported on their personal return.

[Uncle Sam]

CPA Misled Us

In answer to the original poster's question - yes - you can pay your taxes with a credit card as was previously answered - however - you must bear the cost of the service fee involved with the transaction.

[veritas]

No offense

But if the only way you could afford a vacation is with a tax refund, you might take a look at your priorities.

[geekgirldany]

I agree with everyone else who has posted.

I think what your husband needs to do is ask what made him calculate in April you would have a refund versus you now owe. He should give you a answer that makes sense. There maybe something left out on the CPA side or your side. He may have been doing a estimated by going on previous years numbers and then found something else that changed the current year. It could just be a mistake.

I never tell people how much they are getting in a refund... even when they ask I always tell them I don't have the tax return completely finished and can not give them an answer. This is better than them expecting a refund that is either less or them owing. Customers that I estimate taxes for during the year... well I try to give them my best estimate I can. Sometimes itemized deductions can be lower than they previous year causing a lower refund or making them owe.

Just give the CPA a chance to explain.

[Corduroy Frog]

BreckGirl

BreckGirl, there are reasons why many of us are not willing to commit and jump on board. We have heard this scenario before, and when we get involved we find out why there are such descrepancies.

I was enthused once about getting a new client. She had a small business and that meant off-season work (we love customers like this). Her previous accountant/tax consultant had really done her wrong, as I listened to her complain.

After immersing myself in her work for a couple days, I found out what was wrong with her first accountant. Nothing. Biggest mess I'd ever seen, and no compunction on her part to ever do anything different or take any suggestions. One of the things I had to do was get the equipment schedule from the previous CPA. He was so glad to get rid of her. He hadn't even been paid.

Don't be insulted at this comparison, because I don't think you are the same as the above. However, as people in the tax consulting industry, we know enough that we have to walk in the other man's shoes before coming to conclusions.

To look at your situation a little more closely, consider some of the things you've said. Your husband has to file separately because he owes back taxes, meaning he hasn't filed or hasn't paid. We don't wish him ill for this -- we encounter this quite often. But this may explain why all of a sudden he owes more than previously thought. The $2500 could include previous amounts due, and even if there were a refund it would be swallowed up by applying it to his account. Then you told us he was a self-employed realtor. This means 1099s coming in and launches any number of descrepancies in receipts.

BreckGirl - I can't say that any of the above applies to your situation, and your CPA tax preparer may in fact be less than competent. I've only introduced a few of the reasons why so many of us are noncomittal to blame him. Most of us who post are tax preparers, and over time we learn about the nuances in our industry.

[Larmil]

Assuming CPA

I would guess that BOB W is on the right track. So often I see income/expense statements self-prepared, or even done by bookkeepers, that include personal expenses that have to be culled out.

The CPA on doing a guestimate would have only seen the totals only and not the details , which might have contained errors. A common mistake is taking car payments as a business expense.

Please let us know how Monday's 8 sharp meeting goes.

We are assuming that the person is a CPA. Sometimes the general public does not realize the all 'tax preparers' are not CPA's and that all CPA's are not 'tax preparers'.

[ED SMITH]

I would guess that BOB W is on the right track. So often I see income/expense statements self-prepared, or even done by bookkeepers, that include personal expenses that have to be culled out.

The CPA on doing a guestimate would have only seen the totals only and not the details , which might have contained errors. A common mistake is taking car payments as a business expense.

Please let us know how Monday's 8 sharp meeting goes.

[JohnH]

What I would do

Interesting title - "Our CPA misled us", rather than "Our CPA made an error". One would get the initial impression that your CPA deliberately gave you wrong information in order to trick you into spending your tax money on a vacation.

If you were my client and I prepared an estimate back in April with a guarantee that the estimate was correct, and then we learned I had made a mistake, I'd pay the late payment penalty due on the balance due from April until the day I gave you the return. I might also pay the interest on the late payment. I would not pay the estimated tax penalty because you would have incurred that penalty even if you filed on April 15. On a $2,500 balance due, your Penalty & Interest on $2,500 will be about $30 per month. Your estimated tax penalty would probably be about $ 220.

On the other hand, if you provided me with additional information after April 15 which materially affected your tax liability, I'd refuse to pay any penalties & interest. Common sense might tell you that the $30 per month I mentioned above is a fairly insignificant amount to pay in order to get your return prepared correctly and not under deadline pressue. I'd also encourage you to get your info in to me well before the filing date next time (if there is one), in order to avoid our having to do last-minute calcuations that you want to hold me responsible for. Finally, if you insisted that I pay the penalties & interest after rushing me and not having given me all the info I needed, I'd insist that you find someone else to prepare your returns in the future.

[WhiteOleander]

You are ultimately responsible for your taxes. I would imagine that your husband has had clients blame him for something gone wrong on a deal. They claim your husband told them something. And it turns out not to be accurate. Or perhaps never said. But, the client is ultimately responsible for the papers they signed.

It is absolutely impossible for any of us to tell you what went wrong. It's like trying to give a haircut over the telephone.

[DonPriebe]

But ...

If this was the CPA that normally does your taxes every year, and ...

You normally owe taxes when you file in April, and ...

This year was not that different from other years, and ...

You gave him all the relevant data in Februray, then ...

at a minimum I think he owes you a d..m good explaination of why he so misjudged your position in April.