Though taxes may be certain, the way they are sometimes prepared are not. This year my wife and I decided to file our taxes with a "reputable" accounting firm here in Juneau. We made the decision based on multiple TV commercials and a friend's recommendation. After turning in a slew of tax info, the receptionist of the firm told us that unfortunately we "owed Uncle Sam."
Because of a modest $80 return last year, I wasn't too surprised. What did startle me however was the price tag, $1,150. And this wasn't including the hefty $150 fee they charge for their "services." The receptionist then explained this was solely the fault of my wife's earnings and that she wasn't claiming the right deductions. My wife and I then decided to contact my old CPA back in Oregon for a second opinion. A call back the next day offered great news. First, we did not owe $1,150 or anything for that matter. In addition, we were eligible for a $292 refund.
What? Instead of being overjoyed, I was angry. How could a "reputable" company have made such an error that would have cost us over $1,300? Our Oregon accountant said, "you can take your taxes to eight different CPAs and get eight different interpretations. ... It depends on their knowledge of the tax code (such as HOPE and Lifetime Learning Credits for college students) and their communication with and respect of the client." You should also be wary (per my father) to receive your return back without any questions having been asked.
After some counseling and much needed tax info from our accountant, my wife and I have learned a lot. Hopefully this letter will open some eyes and get people to know their tax preparer better.
Ask questions. Next time your taxes may not be as depressing as they seem.
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