Time To Upgrade?

Are you still using Microsoft Office 2003? If so, you’re no longer receiving security updates because support for Microsoft Office 2003 ended in April of this year.

Do you receive MS Office documents which you cannot open? Or are documents received garbled or corrupt? Not everyone saves documents backward as 2003 compatible. If you find this happening often, it may be time to upgrade.

Are you still using Microsoft XP? If so, you no longer have support for your operating system as it ended in April as well.

What about Internet Explorer 8 (IE8) – also no longer supported, AND the XP platform will not run the newer IE’s.

After the Heartbleed virus scare last April many professionals switched to Google Chrome or Mozilla Firefox browsers. If you use IE8, you might be exposing your PC to outside threats; If you continue to use the XP platform you may want to discontinue using IE8.

I recently experienced a problem with Mozilla Firefox – where all my Adobe pdf icons became FireFox html icons; I was no longer able to open a pdf with Adobe Acrobat. A simple uninstallation of FireFox fixed my problem, and I now use the Google Chrome browser on that particular computer… which happens to be using the XP platform.

The cost of upgrading to a new data system can be intimidating… but the cost of hardware/software failure and losing your data could be potentially devastating. Even with a good backup product – like iBackUp – you will be ‘out-of-business’ for at least 24 hours… a long time indeed if this occurs during a tax season crunch.

What are your ‘options’ ??? Use Windows XP unsupported (unprotected) but your PC has become five times more vulnerable to security risks and viruses which means you could get hacked and have personal information stolen. From a technology standpoint, new equipment may not, probably will not, work with the XP platform. As time moves on, your PC performance will continue to degrade.

Another option is to upgrade to a newer operating system. Have your technology support staff review your pc – you may be able to upgrade. If you cannot upgrade your pc, it may be time to buy a new one.

Don’t get caught short. Consider updating your system now – during the slow season – and take time before next January to get accustomed to and familiar with new software. I’ve never taken any replacement hardware off my network; and it all still works… but I no longer ‘depend’ upon it to work. Instead I have a newer desktop and a newer laptop and redundancy built into most everything I do.


Tax Pros – Aloha

Those of you who know me personally through my professional organizations are aware that I love to research, write and share my experiences.  I am passionate that people who share and continue to learn will reap rewards more quickly in business and in life.

These posts are for you, for your staff, for your peers.


On Ordering IRS Transcripts

On a recent Linked In group question, followers were asked if it was customary to place clients on extension, order an IRS Transcript of all items of Income, then file a tax return to match what has been reported to the IRS. I’ll share my response to that group here:

“It’s not customary, but I’ve done this for several clients for different reasons:

There’s that sweet, elderly couple that bring you all the important tax documents they received – so they think – but every year they get a CP2000 for a missing W2G. (Don’t I wish I had the problem of ever being ISSUED a W2G… And he never knew she won that much!)

There’s that newly (or not so newly) incorporated professional (doctor, lawyer) whose corporate name is “his name followed by APC” and large companies still issue 1099s in his SSN. Ever try to get a doctor or lawyer to be bothered with changing this info? They’re getting paid… What’s the big deal (gotta love our professional clients)

Let’s not forget COD that clients don’t even know is taxable, don’t know is income, and even after they answer our wellcrafted questions questions, may not tell us about… The concept of COD alludes the general taxpayer.

Did you specifically ask about the 401K loan they quit making payments on, so the bank considered the money an early distribution? Taxpayers – people – stop looking at mail from entities they are avoiding (the bank they stopped paying) so they round-filed the 1099R they got and now you don’t have it.

So depending on your clientele, you may have several reasons to pull a transcript. As long as tax evasion isn’t one if those reasons… more power to you – to your friend. Get the return right the first go-round.

And you may want to remind your friend that K1’s are notorious for not being on the transcript, so he/she should call that return preparer and get an estimate of the income if the K1 will be late 🙂 “


On Filing A Tax Return – Think First

These thoughts apply as much to tax professionals as they do to taxpayers – so please share my thoughts with your clients, staff and peers:

“Many tax preparers make a quick assessment of a taxpayer’s NEED to file a tax return prior to actually preparing the return. Taxpayers may weigh the NEED to file a return with the COST to file a return, and then decide to forego the cost.

Taxpayer’s should consider more than just the NEED to file a return. In filing the ‘not required’ tax return, the taxpayer may receive a refund of taxes withheld from their payroll. If the taxpayer lives in a state with income tax, they may receive two refunds – one federal and one state. If the taxpayer lives in a county/city with income tax, they may receive three refunds – one federal, one state, one county/city.

In addition to receiving a refund of tax withheld, the taxpayer – and tax preparer – may wish to consider eligibility for one of the many refundable tax credits. A taxpayer with no NEED to file a return has low AGI – but they may be eligible to receive a sizeable, refundable Earned Income Credit. During 2009 and 2010 the taxpayer with no NEED to file a return may have been eligible to receive an Economic Stimulus Payment, Recovery Rebate or Making Work Pay credit – all refundable. For example, we saw this in 2009 with taxpayers’ whose only income was non‐taxable Social Security.

Before considering to not file a tax return, THINK FIRST about whether or not your client might be eligible for a refundable credit, or eligible for a refund of withholdings against their payroll. While your taxpayer may have no NEED to file a return, there may be a financial benefit to file anyway.

Also, THINK FIRST when reviewing your client list at the beginning of each season. You may have a client who has not filed a tax return in many years because there was both no NEED to file a return and no financial benefit either. But as we saw in 2009 with the Economic Stimulus Payment and Recovery Rebate, your taxpayer may become eligible for a refund based upon new legislation.    🙂    “