San Diego Housing Bubble News and Analysis

Carlsbadworker, I am a CPA and a Real Estate Broker. I am not currently in practice in either field. I am baffled by your characterization of crooked CPA's. I believe you are referring to crooked tax preparers, and there are lots of those out there. A tax preparer takes a "Mickey Mouse" course and another "Mickey Mouse" state exam and, voila, can hang up his/her shingle. My apologies to any tax preparer on this board, but it is what it is. I know, I took the qualifying tax preparer course online a couple of years ago just as a refresher and I was shocked at the lack of depth of the coursework. From what I know of CPA's, the crooks are few and far between. Believe me, no CPA in their right mind would risk that license and I personally have never encountered any CPA that would fake tax returns. It's just not worth it after what you go through to get the license, which consists of a Bachelor's degree, many units of accounting and other business classes, a 2 year internship or the equivalent via a 5th year of accounting classes, a 3 day exam equivalent to the Bar exam, and the oversight of the State Board of Accountancy, which does police its members and responds swiftly and harshly to complaints, unlike the DRE. I was involved in a State Board of Accountancy investigation several years ago as a witness because I had prepared a portion of a tax return in which the principals had accused my boss of malpractice and I saw firsthand how promptly the complaint was responded to and how rigorous the investigation was. In fact, if you go to the State Board website and look up a licensee, you can see if there has been any action against that person.

Now that I've defended the CPA profession (I never defend the real estate profession, it is overrun with crooks!), let's move on to your situation. I don't give tax advice as my license is in inactive status, but your description leads me to believe that a good mass marketed tax prep program such as TurboTax would work quite well for you. It appears that you do not need more than the most basic $49 TurboTax package.

I hope you are enjoying Temeku Hills. I lived there for a year and own rental property there. It is a beautiful community and has the benefit of a vigilant HOA.

I think so. I'd much rather pay a professional to do my return and save me the hassle. By the time you buy tax software or pay the fees to file online (e.g. via turbo tax online) you've paid at least 1/3 of the amount you'd have to pay a pro and you've done all the work yourself. Taxes are complicated and change every year. I'd just as soon pay someone and know it is done correctly.

I'll give some plugs here. No affiliation just a happy client..

When I bought my house and started paying a CPA to do my taxes, I used Jim Glanz (Glanz Professional Services) in La Mesa; my sister had used him for years and I thought he was honest, straightforward and best of all, fast. He'd have me in and out in less than a half hour and then back in a week to sign returns and pick up copies.

When I incorporated I had to find another CPA since Jim won't do corporate returns. I ended up using Chris Cundari at Abbas, Jensen and Cundari in Hillcrest. Again, Chris was great helping me get my business off the ground and he and his firm are highly recommended.

Expect to pay between $150-200 for a personal return. A corporate return is about 4x that.

http://ajccpa.com/

I can't think of a single CPA I know that charges $150-$200 for a 1040/540. A charge of $150 would only cover the cost of the clerical staff time plus burden, the computer charge (this is not TurboTax, folks, and the software costs are significant), the packaging and mailing fees, plus the exhaustive disclaimers and documentation that are necessary compliances now. I can attest (pun intended) to this , I was crazy enough to run my own sole proprietorship in the early 90's and know well what it costs to run the business.

I can't find Jim Glanz nor Glanz Professional Services on the CA State Board of Accountancy website. Are you sure he is a CPA?

The last tax return I had prepared by someone other than myself was in 2006 and it cost north of $1000 due to the complexity of the return and the schedules needed. This was a non-corporate return prepared by a CPA friend of mine who used to be a tax manager at Arthur Anderson and whose time charges were in line with the complexity of the situation. My point here is that time charges vary based on the return and it can cost considerably more for a 1040 and 540 than $150-$200.

I really believe most Piggingtonians with schedules A, B, and D, and misc. credits can use TurboTax. The software walks you through the decision points and "logics" you in the correct direction. I give Piggintonians accolades for being smarter than the average housing bear and I know they can follow the TurboTax prompts.

Temektu--I have been using the same CPA for years. He charges me $165. I have one rental property/that is all I own, and 2 jobs. I itemize all my receipts before I see him. It seems that he has an easy task....do you think this rate is fair?

I think you're saying you require form 1040 but no Schedule A, probably a schedule B, Schedule E and depreciation schedules. Yes, that is a great rate. If you are low maintenance and don't require interview time, that is, you can fill out the yearly update properly and he can just review and input and process, it is a good, fair rate.

You see, he doesn't function as a tax monkey just inputting your numbers. Professional standards require that he documents each file by xeroxing everything you give him (1098's, 1099's, W-2), creating workpapers and tying all numbers, paging, and referencing. That takes some time. He also probably utilizes a tax program online and is charged for each schedule and form he needs. The task is more than jamming numbers in the computer and he has to be able to logically, without the computer, review the final work product, form to form, to ensure both the flow of numbers is correct and that the numbers are on the correct forms. This requires extensive knowledge of tax theory. To draw an analogy, it is like being able to perform a complex algebraic function with pencil and paper versus inputting the numbers and hitting an answer key without conceptualizing how to derive the solution.

Thanks, TemekuT. Yes, I am mixing up tax preparer v.s. CPA. However, a lot of CPA (or claimed CPA) does do simple tax returns, so it does make it confusing to an outsider.

Now, since you are in this profession and live in Temecula, can you refer any CPA that is good for small business consultation? What is the fair hourly charge for the service? I did sometime running into questions that I really want to talk to an experienced CPA.

By the way, I truly admire your family gene of fiscal displine and the zeal for smart investment. My wife and I are both about your daughter's age, and we both look up to you as an inspiration. I believe you at least had two rental properties in Temeku Hills (one bought in 1997 and the other in 2000), which serves you well. I hope the community will bring the same luck to us in our financial future.:-)

Carlsbadworker, I'm just the product of depression era parents. They raised us to think before we spent and you can do that with your kids. That is how I raised my daughter and anyone can do the same.

You are smart to recognize that a good CPA who will advise you prior to decision making is necessary. Too many people start a business without a plan or guidance and then fail slowly.

I don't have a recommendation for you. I'm not in the business anymore and I do my own returns and I don't need consulting advice at this point. So now we're back to the start of this thread. Does any Piggintonian have a recommendation for a CPA?

You may be right. I'm not sure if Jim Glanz is actually a CPA since I only used him for tax preparation not any accounting services. I still recommend him as a tax preparer.

I already recommended my current CPA above: Chris Cundari with Abbas, Jensen and Cundari. And yes, he charges me less than $200 and he IS a cpa.

http://www2.dca.ca.gov/pls/wllpub/WLLQRYNA$LCEV2.QueryView?P_LICENSE_NUMBER=60682&P_LTE_ID=783

My tax returns are simple and having been an x accountant and having passed the cpa exam I could do them without any trouble but I use a CPA simply because I can't help but think that it can affect whether or not you are audited.

I believe the IRS would rather harass individuals who didn't get a CPA involved then those who did. However, I have no reason to think so other then I just don't trust the government.

John

John: If a CPA prepares your filing, then they accept professional responsibility for it's correctness and content. In terms of IRS "harassment", the IRS is going to be more likely to pass over a CPA prepared return than an individually prepared return, simply because a licensed professional prepared it.

TemekuT: As far as crooks go: Remember that Enron would have never been possible without Arthur Andersen's Houston office enabling the fraud. And there is no way that anyone will ever convince me that they weren't fully aware of what was transpiring. The average salary for a partner at Andersen Houston was in excess of $500,000 per year and much of that income was derived from their relationship and business with Enron. I worked with all of the Big Eight (yeah, I'm dating myself a little there) players when I was with Willis (an insurance broker) and they were all willing to "play ball" when it came to making their clients "happy". That's why CPA firms and lawyers exist: Hide the mess (CPAs), and if that doesn't work, clean it up (lawyers).

meandale, I looked up both Chris (licensee) and the firm on the State Board site and they are violation free and in good status. It sounds like they are working out for you and at a good rate. My point about the price was that it is not a flat rate, rather, it is driven by both the actual time (hourly fee) and the amount of schedules required, hence, the more complex the return, the greater the price. Perhaps I generally have been involved in preparation of more complex returns.

Allan, you're absolutely correct about "playing ball" on the audit side. Remember, the CPA profession licensing is based on the attest function, not on tax prep, and the revenue stream derived from audits and consulting is huge, especially since the inception of Sarbanes-Oxley.

I lost my innocence as a first year staffer for one of the Big 8 when it came time to trade off issues at the final audit meeting, in which I was not included. My audit senior explained to me what was transpiring, the bargaining process, and how this was common.

I submit in any form of big business it is impossible to succeed if you play by the rules because of widespread ethics breaches and corruption, and that this is common at THE TOP LEVEL, not at the worker bee level. What a sad commentary on ethics.

Having said that, I still maintain that almost all CPA tax preparers out there run their small business with integrity and would never compromise their license and livelihood to falsify an individual tax return. I know it happens, but infrequently, because it is just not worth the consequences to the sole proprietor or small partnership.

jficquette, that's an interesting idea about the audit frequency of self-prepared returns. I wonder what the statistics are.

For anyone worried about an audit, I recommend using a tax attorney for return preparation. You have the benefit of attorney-client privilege and the workpapers do not need to be turned over to the IRS. When using a CPA, Enrolled Agent, or Certified Tax Preparer, the workpapers must be turned over to the IRS if requested and all conversations and discussions cannot be kept confidential.

I sometimes think there may be an advantage to using a CPA or an Enrolled Agent who was formerly in the employ of the IRS. Imagine knowing what would likely trigger an audit and also how to deal with the IRS system and mentality!

TemekuT: When you consider that most of the folks making the "real" money (high end attorneys, CEOs, investment bankers) are compensated largely through performance based objectives, the ethics breaches become more common and widespread. This is not to condone the behavior, simply to explain it.

There was an excellent article in the WSJ following the Enron debacle and the reporter was looking at all the ways in which Enron really dominated parts of the Houston economy and in spite of the oil wealth that was also present. They really spread the money and the influence around. It becomes remarkably easy to forget your ethics in your other pants as you head to work in that environment.

I worked as a CFO for one of the biggest insurance brokers in the world and primarily on the surety side (large market construction) of the business. You want to talk about sleaze and doing "what it takes" to get the bond and get the business? Pardon the crassness, but you get your cherry popped fast and hard, believe me.

I've been out of the corporate side and on my own since 1998 and I don't miss it one bit.

There is a distinction between a CPA and an accountant that is not a CPA. A CPA can practice in front of the IRS. An accountant who is not a CPA may not practice in front of the IRS, but that doesn't mean they aren't good at preparing taxes, and they are likely less expensive.

I use an accountant who was once a CPA but let his license expire because he never really needed the CPA title.

If I ever get audited and I need someone to represent me, I would have to hire another individual - a CPA - to do so.

Back to the original question... Unless there were complications with the home sale transaction - turbotax or taxcut are both fine for doing your taxes. I've only used a CPA once - a year I sold and bought a house, relocated across the country, and had some tax gross up issues. (back when corporations paid for relo's). She made mistakes. Being a "trust but verify" type of person I input it into turbo tax to double check things. When I asked her about the discrepancies -she agreed that turbotax was correct.

The real work with doing your taxes is getting all your documentation together and making sure you have everything. You have to do this for a CPA or for turbotax/taxcut.

If I had my own business, with lots of 1099's, capital depreciation, etc... I'd probably hire an expert. But for a fairly straightforward tax return with home ownership... eh, do it yourself with a good tax package.

I am a CPA. I used to work for a big firm. I worked in tax & then moved over to audit. Now I work in private industry. You do NOT need a CPA license to represent a client in front of the IRS.

The CPA license was created to allow for independent attestation engagements. The CPA license provides an accountant with the right to audit or review a company as a certified independent party. That's it. The CPA license itstelf has very little to do with tax preparation. There is a small portion of the CPA exam that addresses individual & corp tax prep, but the license is absolutley not required for be a recognized agent by the IRS.

For simple returns, if you have W2 wages & a schedule A a CPA will basically do the same thing you would do in preparing the return. He drops the numbers into the software & out comes a return. Granted the programs we use (like Lacerte) are very sophisticated & perform diagnostics that is well beyond the turbotax caliber software. For simple returns, you're getting piece of mind that your return is most likely done correctly & you personally don't have to hassle with preparing the return yourself.

Where a taxCPA really earns his keep is in the planning process - advising clients before making business decisions that have considerable tax implications. They are absolutely invaluable for planning & preparing complex returns.

But for a return like the one described at the beginning of this thread, once the year is over, we're all just reporting on historical items. You have your pile of W2s & 1099s, the CPA will do basically the same thing you are going to do. They don't have a magic wand.

The sharpest tax CPA I know is in the Vista/Oceanside area of North County. He is absolutely honest, has high intergrity, is a border-line genius, & is quick. I believe his billing rates are very fair as well. Info below:

Mascari Craig M CPA
1905 Apple St
Oceanside, CA 92054
(760) 722-3555

Clint - thanks. Useful information.

Also - good point that you can use an accountant/CPA to try to reduce NEXT year's taxes as well as LAST years taxes. Preparing tax returns is not all there is to it. My annual tax planning meeting with mine in Nov. is always useful.