Lion EA

Because the general public recognizes CPA and not EA, if you have a choice, go for the CPA. At my age, the extra year to get another major in accounting and the years (3?) working for a public accounting firm made no sense. EA gives my clients the peace of mind that if something goes wrong I can deal on their behalf. But, we all hope I don't have to use that aspect much.

The ads reinforce my decision some seasons back to leave HRB since the ads' target market is not the type of clients I try to attract to my business.

An EA is good to have for tax preparers, even though your clients will not know what it means! It lets you represent with a POA without the client being present. You can get information in seconds on-line with a POA and even submit the POA on-line. If you're not a CPA or tax attorney, it gives you privileges you do not have now. The new test seems to be easier, with all the business stuff in only one part instead of two, in case you stick to personal returns. You can also study for one part, take it, walk out with your score in hand, so you know whether you go home and continue studying or move on to the next part. You don't have to wait for a year to take the next part. I took the HRB study course and passed all four parts in one sitting. Once you get your EA, use it to tell your clients what you do for them. Join your local chapter of NAEA or other preparers' group for networking and education.

Tell William to check up on us all on this board from time to time. We'd all like an update from him. Since he's publishing children's stories now, he might borrow Kerry's tiara and wand. Go easy on the pixie dust, though.

The advertising makes me very glad I left the big corporations to go out on my own.

Do you guys have any employees well versed in Mac & PC issues, such as using Parallels on a Mac to run PC programs? I have a client that just went that route, but the PC support says they can't deal with their programs on a Mac and Mac support says they can't deal with Parallels -- which they sold. He's taking a course and learning many tips and tricks and work arounds, but can't move some of his sent mail in Outlook onto his Mac. He's also trying to be able to send documents, slide shows, etc., that he creates on the Mac to potential clients no matter what they computer they use.

Wow, that would be handy. E-services, maybe?

Board Bard? Bad Board Bard? Bored Board Bard?

You can fill out a POA online, but make sure you have client sign it for your records.

A very :bday:

Is that what our new prez means about spreading it around, moving the temperatures up north? OK by me.

A very :bday:

Of course, if you have a single person schedule C and hire the spouse as an employee you then have the option of providing your employee with health insurance for his/her whole family on Schedule C -- instead of the SE adjustment on the front of Form 1040. Similar for a retirement plan for your employee which you will deduct on your C.

A very :bday:

Only Kerry could pull it off so stylishly! :wub:

A very :bday:

A very :bday:

A very Billy, what time do you get up each morning? And, get on your computer? I have to have a cup of tea. You're our first and foremost greeter and birthday wisher.

I love the idea of a performance review! That's a great document to keep in his files to support his salary reduction. His company does have profits, just not as great as he'd hoped; but it sounds like they've been the same all through the years. So, he might have to manufacture a document to cling to to support his lowered salary. My small business owners don't really invest much in their companies, very undercapitalized, so ROI wouldn't get them much. Like your guy, they expect to take out more than they earn without driving the company into the ground. But, my barber said my company can buy me a car, pay my mortgage on my home office, give me a travel allowance and spending money....

He can take all the distributions he wants from previously taxed earnings. But, does that justify lowering his salary? Wouldn't his salary be based on what he does for the company? If that hasn't changed and if the total amount he's going to end up with doesn't change, as much as he'd like less salary and more distributions, he hasn't given me a business reason to reduce his salary. He wasn't looking to justify taking distributions, he was looking to justify lowering his salary while taking more distributions.

It would be a minor feature for me, good in a few instances. Just starting with the oldest (or with the earliest open year), completing one, then rolling forward to the next year, and on and on, saves a lot of typing of unchanged info and carries forward things like LTCG carryforwards. I get two or three a year who haven't filed for two years or more. Usually businesses, including Schedules C, and people with a lot of trades might wait for two or three years until they receive an IRS letter saying they didn't file for 200X. Less frequently, I get the taxpayer who hasn't filed for ten years or so. Now that I'm on my own and take new customers only from referrals, I don't get those non-filers who used to walk into H&R Block. Last year was my first year with ProSystem fx, so I might've misunderstood what was happening, but I swear it carried client information BACKWARD for someone who had more than one year to file. Nothing like an NOL, just name/address type stuff. Maybe I'm mis-remembering.

PS The Form 8888 is fairly new, allowing one refund to be split into more than one account, such as your IRA, savings, checking, brokerage account, etc. However, without Form 8888 and before it existed, you could directly deposit your refund. Again, hopefully in your own account, but I've seen others deposit without the name matching. And, I've seen a deposit get kicked back by a bank. Not on MY prepared returns, though.

And, even if you ignore what a paid preparer should not do but what an unknowing relative did in the past, you still have to worry about what a bank might do if you repeat this in the future. If the bank is paying attention, they will not deposit a refund in an account with a different name but will send it back to the IRS. Then, you'll be waiting weeks, months even, to receive a check in the mail. So, even if you're unaware of various regulations, you do want to make it as easy as possible for the IRS to return your money to you as quickly as possible and want the return name to match the account name. Don't forget to proofread the bank routing and account numbers, too. You keep our computers running smoothly, and we'll advise you on tax matters.

Is that the one for the elderly &/or disabled where you have to make a very, very small amount of money to get any benefit? Think I was close to using it once, but too much income.

But the OP asked about cutting salary in order to take MORE in distributions while taking the same overall. He just wants to distribute it differently. In other words, he has no business purpose for lowering his salary while simultaneously increasing his distributions. It's just tax avoidance. The company is not doing worse. Salaries in his field in his region have not dropped. What would he get paid for performing similar duties as an employee in a company in which he is not a shareholder? That would be a reason to reduce or increase his salary. If avoiding SE tax is the only reason he can give an auditor, you might want to suggest he research salaries to document a business reason for his change.