Here are the answers to some of the most
Questions" our firm receives.
Question: What services do you provide?
Answer - We are a full service, certified public accounting firm. We prepare tax returns including, but not limited to, individual, corporation, LLC and LLP, non-profit, estate and trust, partnership, payroll, sales tax, property tax, and other taxes. We also sell computers and software as well as offering training. We also provied full charge bookkeeping services, payroll and monthly, quarterly and annual financial statements.
Question: I would like to know the value of my business. How can I determine this?
Answer – We can provide an in depth business valuation and consulting service and would be happy to assist you in this process. There are many reasons that business owners need to know the value of their interests. These include the purchase or sale of the business, buy-sell arrangements, succession planning, shareholder disputes, marital dissolution, estate and gift tax planning, to name a few of the most common.
Question: Can you help me with my investments?
Answer - We have financial advisors on staff who can help you determine your goals and strategies. We can assist you in the process of transferring your accounts to concur with those strategies.
Question: What should I do with my payroll? What alternatives do I have?
Answer: We have had very good success with recomending outside payroll services such as PaySystems, Payroll One and ADP. Depending on your needs, we can also process your after-the-fact payroll in our office.
Question: I am concerned that my business is not as profitable as I would like it to be. What can you do to help me?
Answer - We offer an operational auditing program where a team of our professionals come into your business to assess your company's operational strengths and weaknesses. We breakdown your business into the areas that are mission critical and offer recommendations (that we can help you to implement!) to get your business on track. Organizational efficiencies and profitability structuring are the keys to your business working FOR YOU rather than vice versa.
Question: What should I do about a retirement plan? Can you explain the various plans available?
Answer - A good retirement plan can be an essential weapon in your arsenal for accumulating wealth. I will go out on a limb...Every business owner with taxable income from some source (whether from the business or not) should have a retirement plan to help defer taxes and to accumulate savings tax free! We can help design the PERFECT plan for your business and your circumstances. Give us a call so that we can further discuss your interest.
Question: What are your hours and are you a seasonal company?
Answer – During tax season (January 1, through April 15), we are open Monday through Friday from 8:30am to 5:00pm. Saturday hours are from 8:30am to 2:00pm. Most days, staff and partners can be found here much later than our standard hours, but we encourage clients to call first before making the trip unless the information can be put through the mail slot. Our summer hours are 8:00am to 4:30pm. Our extended hours reflect our commitment to offer our services at a time most convenient with our client's.
Question: What is a reasonable wage for S corporation owners? (11-12-02)
Answer - Ideally, the best way to set pay is to use an amount comparable to an individual being paid similar rate in your industry. Otherwise, I use a standard rule of 50\50. Basically, 50% of income available to owners should be taken as wages and the other 50% should be taken as dividends.
Question: Which items qualify for a cafeteria plan deduction? (11-15-02)
Answer - The main items consist of Qualified dependent care costs, disability income * accidental insurance, group-term life, dental, & health insurance premium costs, and medical cost not covered by insurance. Any unused amounts in a particular category are lost by the employee and reverts to employer by the end of the plan year
Question: Do I need to visit your office to have my taxes prepared?
Answer – Although we encourage an intrapersonal relationship with our clients, it is not necessary to visit our office to have your return(s) prepared. Many clients utilize the mail or express services to send their information to us. For new clients, we encourage a meeting so that we can discuss your unique tax situation.
Question: How do colleges calculate student financial aid?
Answer - Colleges calculate student financial aid awards by calculating the college’s cost of attendance (COA) and then subtracting the expected family contribution (EFC). Any remaining amount may be funded with financial aid. Other considerations are how early the financial aid application is filed and the particular school’s available financial aid resources.
Question: What size clients do you serve?
Answer - Small to medium size manuafcturing to physicians to manufacturers reps, etc. Please see a complete listing under Diversified Clientele which can be accessed from our Home page.
Question: What size clients do you accept?
Answer - All potential clients are evaluated on thier individual needs.
Question: Can I deduct student loan interest?
Answer - Since personal interest is generally non-deductible must meet several tests: You must be the person liable on the debt and the loan must be for education only. Your income can't exceed $130,000 on a joint return or $65,000 on a single return; married couple filing separately can't deduct. You can't deduct if you're claimed as a dependent.
Question: Can I save tax by filing a separate return instead of jointly with my spouse?
Answer - You sometimes may benefit from filing separately instead of jointly. Consider filing separately if you meet the following criteria: One spouse has large medical expenses, miscellaneous itemized deductions, or casualty losses. The spouses' incomes are about equal. Separate filing may benefit such couples because the adjusted gross income "floors" for taking the listed deductions will be computed separately.
Question: Do we service clients outside of the East Detroit area?
Answer - We have several clients in Birmingham, Bloomfiled Hills, Grosse Pointe, Livonia, Warren, Roseville, St. Clair Shores, Detroit, Bay City, Harbor Springs, Burt Lake, and many other areas of Michigan. We also serve clients out of Michigan and have tax software to prepare returns in all states.
Question: How do you charge for your services and how does your cost compare to other tax preparation firms?
Answer - We charge by the hour. It is difficult to give exact quotes due to the complexity of some tax returns and unforseen issues. We do however. try to keep our costs as low as possible so that cost savings can be passed on to our clients. Over the years, we have found our fees to be competitive and on the low side of other quality firms our size.
Questions: Do you work with Start-up Companies?
Answer - Yes! Many of our clients are just starting in business. We will lead you through the necessary governmental forms. Through our networking, we can also assist in finding you other necessary professionals to deal with (lawyers, insurance agents, mortgage brokers, etc.) throughout the state.
Question: I want to start a new business. Can you tell me which type of business I should form?
Answer - Yes. When setting up a new business, it is crucial to set up the right type of business, such as corporation, S corporation, limited liability company, limited liability partnership, partnership, sole proprietorship, etc. Our consulting services will help you form the right type of business based on your unique situation with consideration given to liability issues and tax advantages.
Question: How are Limited Liability Companies (LLC) taxed?
Answer - A single-owner LLC defaults to being taxed as Sole Proprietorship. Income/loss from the LLC is reported on the owner’s personal income tax return. A multi-member LLC defaults to being taxed as a Partnership. A Partnership tax return must be filed. The profit or loss is then reported on the owner’s personal tax return. Any LLC can elect to be taxed as a corporation. To do so, one must file an election within 75 days of creating the LLC.
Question: Is there any non-tax record that I should keep?
Answer - There are other records you should keep, even though they don't appear to have any use for your tax returns. Family documents, certain medical records, insurance policies, records of major purchases, are just a few examples. These documents will be needed in the case of any emergency that may arise.
Question: Should I keep my old tax returns? If so, for how long?
Answer - Yes, you should keep your old tax returns for at least 7 years. When a return contains information pertaining to the basis of property owned, it should be kept until that property is sold. One of the benefits of keeping your tax returns from year to year is that you can look at last years return while preparing this years. If you do throw out an old return you may fill out form 4506, Request for Copy or Transcript of Tax Form, and send it to the IRS service center where you filed your return.
Question: What pieces of paper do I need to keep in order to do my taxes?
Answer - Keep detailed records of your income, expenses, and any other information you report on your tax return. A good set of records can help you save money when you do your taxes and will be a trusty ally in case you are audited. We require the following documents for preparation:
--Forms W-2 for wages, salaries and tips
--All Forms 1099 for interest, dividends, miscellaneous income, etc
-- Brokerage statements showing investment transactions for stocks, bonds, etc
-- Schedule K-1 showing income from partnerships, S Corporations, estates and
-- Statements supporting deductions for mortgage interest and taxes including student
loan interest and educational expenses
--Any tax notices sent to you by the IRS or other taxing authority
--A copy of your income tax return from last year, if not prepared by this office
--A copy of taxpayer/spouse/dependents Social Security Card(s) for e-filers
(unless already provided in 2003)
--A copy of a check (marked void) from your checking account if you wish to direct
deposit. We will need this prior to preparing the return. We can not change the
return after you sign the PIN form without re-runing the return and passing the cost
of doing so on to you.
--The Data Sheet which provides a summary of accurate personal information
--Client Questionnaire completed with pertinent tax items necessary for preparing
an accurate return
Question: How do I know when certain taxes are due?
Answer - You can give us a call or check out the Due Date Calendar on this website.
Question: What is the Social Security wage base and rate?
Answer - The wage base is $87,000 for 2003, up from $84,900 in 2002. The FICA rate remains the same: 7.65% for employees and 15.3% for self-employed individuals. The Social Security portion is 6.2% of wages up to the wage base. The Medicare portion is 1.45% (2.9% for self-employed) of wages with no ceiling.
Question: What is the standard mileage rate?
Answer - The standard rate is 36.0 cents/mile in the year 2003. The rate was previously 36.5 cents/mile for 2002 and 34.5 cents/mile for 2001.
Question: What is the unified credit shelter amount?
Answer - The applicable credit amount for estates of decedents dying during 2002 or 2003 is $345,800, which would shelter $1,000,000 from gift and estate taxes. For 2004 and 2005, the credit increases to $555,800, sheltering $1,500,000 from estate tax, however, for gift tax purposes, the exclusion remains at $1,000,000.
Question: What is the annual gift tax exclusion?
Answer - The annual exclusion is $11,000 for 2002 and 2003, per donee, with an annual maximum of $22,000 per donee applicable to spouses who utilize gift splitting. Additionally, there is an unlimited exclusion for payments of tuition and medical expenses.
Question: Where can I get additional information about IRS e-file?
Answer - You can visit the IRS website at www.irs.gov - or feel free to call our offices to ask us questions as well (734-429-7172).
Question: What are your fees?
Answer - Fees vary based upon the work being performed. Our policy is to charge, for tax and accounting work, a rate ranging from $45.00 to $125.00 per hour depending on the staff level required to complete the project. Estates and trusts are billed at higher rates due to the complexity involved in preparing the returns. This rate range is $65.00 to $155.00 per hour. Due to the amount of work involved in processing an Individual Income Tax return, our minimum fee is $250.00.
Question: Do you work with Start-up (new companies)?
Answer - Yes! Many of our clients are/were new entrepreneurs that are just starting in business. We will lead you through the necessary governmental forms. Through our area networking, we can also assist in finding you other necessary professionals to deal with. (lawyers, insurance agents, mortgage brokers).
Question: What records do I need for a CPA to file my tax return?
Answer - A tax organizer is provided for your convenience, that contains most of the items which you will need. However, a detailed record of your income and expense items will be required to support our entries and in addition, a record of any other items reported on your tax return. Since totals of each category of income and expense will help us save time and cost, it is the preferred method of information submission
Question: Can I deduct child support payments?
Answer - No. Child support payments are not deductible, because they represent a pre-existing legal obligation to support your children
Question: In a divorce who is entitled to the child dependency exemption?
Answer - The parent who had custody of the child for the greater part of the year is generally treated as the parent who provided over one-half of the child's support and will claim the exemption if other tests are met. Custody is usually determined by the divorce, separate maintenance or custody decree or agreement. If no decree or agreement establishes custody, then the parent who had physical custody for the greater part of the year is entitled to the exemption
Question: What is the most tax efficient way to save for my children's education?
Answer - The educational savings area is very complicated. We at recommend that taxpayers seek professional assistance. Although a Section 529 plan, under the 2001 Tax Act, is an extremely flexible and tax effective plan, there are other plans to be considered. Also when considering any educational savings plan, consideration should be given to the impact on financial aid qualification requirements
Question: How do colleges calculate student financial aid?
Answer - Colleges calculate student financial aid awards by calculating the college's cost of attendance (COA) and then subtracting the expected family contribution (EFC). Any remaining amount may be funded with financial aid. Other considerations are, how early the financial aid application is filed and the particular school's available financial aid resources
If we can be of further service, please do not hesitate to contact our office.