Money Rehab with Nicole Lapin - Can't-Miss Tax Advice with the CPA That Makes Taxes Cool

Episode Date: April 6, 2023

That's right: Lorilyn Wilson is our new favorite CPA who makes taxes *actually* kinda fun. Nicole holds nothing back and asks all the burning tax questions people are normally too scared to ask: How c...an I get the most back on my tax refund? Are there any new tax credits this year I can benefit from? If I'm a business owner, can I deduct my clothes? If I mess up my tax return... will I go to jail? It's going down! Learn more about Lorilyn here: https://www.linkedin.com/in/lorilynacrum/

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Starting point is 00:00:00 I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start, or even too complicated, if, say, you want to put your summer home in Maine on Airbnb, but you live full-time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you.
Starting point is 00:00:38 I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself.
Starting point is 00:00:56 Find a co-host at Airbnb.com slash host. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. It is almost tax day. Are we ready, money rehabbers? Well, ready or not, here we come. And to help you prep, today I'm talking to Laurelyn Wilson, CPA extraordinaire, for her best tips on taxes for both personal and business filings. Let's take a deep breath
Starting point is 00:01:31 and talk taxes. Well, Laurelyn Wilson, welcome to Money Rehab. Thank you so much. I'm so excited to be here. I'm so excited to dig into taxes with you. I'm lying. I'm not super excited. Tax season freaks me out still. Listen, I'm like the money lady with all the things, but I need tax rehab. So I'm so happy to be talking to you today. You know what? And you are not alone. What it really comes down to is just fear of the unknown. People don't understand it. And so it's scary. And I remember because I went into taxes later in life, so I didn't go back to school and become a CPA until I was 26. So there was a period, you know, between college and that point where I was doing my own
Starting point is 00:02:14 taxes. And I remember that fear and stress and filling out my tax forms and being like, am I going to jail? Why does everybody think that? Because literally, I'm overly cautious with everything because I have an irrational fear, but I hear it from other people that I'm going to jail. Yes, everyone thinks they're going to jail. And what's so funny is like for fun, I don't know, maybe for fun, I'd love to read tax court cases and see what's coming out because there's new there's new drops every week. Sounds like a party, Laura Lynn. You can go read them. But the things these people are doing to lose these cases and end up in prison, it's so outrageous. You don't accidentally end up in prison. It's a long process.
Starting point is 00:02:59 There's court cases. There's all this. So it's like, I always assure people, you're not going to accidentally fill out your tax form wrong and end up in prison. At worst, the IRS might come back and say, hey, we don't agree with these numbers. Can you substantiate them? And that's it. Okay, so that's the worst case scenario, right? I love to play out like, what is your biggest fear? And what happens if that happens? Like a whole stoicism vibe, right? So if we fast forward the videotape, like the
Starting point is 00:03:25 likely worst thing that will happen is maybe you made a mistake, maybe your CPA made a mistake, or maybe you were, you know, disorganized or didn't keep stuff or whatever it was. And, you know, something went wrong. They'll come back to you and say either pay us something or show us something. Yes, exactly. Like I had a client who a couple weeks ago in a panic emails me, the IRS says I owe them this much more money. And I'm like, all right, show me the notice. And what turns out was mid-year their brokerage firm had changed. And so we'd missed a tax form. And of course, I'm going through my records. I'm like, is this a me thing? Did I miss this? But we get to the bottom of it. It wasn't a me thing. Thank God.
Starting point is 00:04:04 If it was though, I would have owned it and rectified it. But I explained to them that, okay, we missed this tax form. There was income on this and you owe interest on this and you owe penalties. And I said, but I can send in a letter and get those penalties abated. So then you just end up owing the tax due plus a couple of hundred bucks of interest. But even with the money due, you can set up a payment plan with the IRS. So she can go online, set up a payment plan for the amount of money she owes, and then the IRS is off her case. Because the IRS doesn't really want you to go to jail. They just want money, right? Yes. Okay. And I think if you come to it from that perspective with anything like bill
Starting point is 00:04:46 collectors right debt collectors all these scary folks like at the end of the day they just want some plan they want to know that you'll be able to pay them something versus them getting nothing at all yeah at the end of the day they're a government worker just trying to do their job and get their paycheck you know check the boxes they're supposed to and they're not infallible like the irs makes mistakes as well so it's's like just because the IRS comes back and said, you did this thing doesn't necessarily mean they're right either. Very, very, very good point. And when you write a letter like asking them to take the penalty off, oftentimes they will. Oh, yeah. Yeah. Amazing. OK, so everyone worries that they're going to make some big mistake when filing taxes. I think we should tackle that idea. What are some of the common mistakes that you do see
Starting point is 00:05:30 individuals or businesses make with their taxes that are avoidable? Yeah. So it's very different from the individual and business side because on the business side, you unlock deductions. Whereas an individual, the documents you have to gather a lot different, you know, so for a simple individual, it would just be aware of where your income sources are coming from. And then making sure you have the documents to support that, you know, like my client who had income from another brokerage that they didn't realize, well, like it kind of is on them to make sure that they understand where their money's coming from and know what to look for at the end of the year. So that's the first thing I would say
Starting point is 00:06:10 is just understand where your income's coming from. And if you fill out your taxes and it looks like something's missing, then take a step back and ask more questions. So when I prepare a return, I always go through the return with the client. And I'm like, does this look like we have everything based on your financial situation and what you know of it? Because I only know what they tell me. And so it's always good to do that extra check and like walk through line by line. Okay. It said this much in W2 from these sources. Is this right? Are we missing something? You know, and just kind of taking some time, stepping back and walking through what are all these things. The other thing is understanding, especially for individuals, how Schedule A deduction works. So when I say a Schedule A deduction, does that mean anything to you? It does. But can you define it
Starting point is 00:06:58 for our listeners? Yes. Yes. So Schedule A deductions are things like property taxes, state taxes paid, mortgage interest, charitable donations. And these are things that will reduce your taxable income. And how we want to think of that is it's not a dollar for dollar reduction. It's not like I spent a dollar on my mortgage interest. It's going to take a dollar off of my taxes. It takes a dollar off your taxable income. So it reduces your overall amount of tax owed, but it's not a dollar dollar
Starting point is 00:07:30 for reduction. Does that make sense? Yes. What happens is people will say, I gave so much to charity. Why aren't my taxes lower? And I say, you're spending a dollar to save 25 cents. That's why. So at the end of the day, you're still actually out more cash. You are paying less in taxes, but you are out more cash overall because you donated to this charity. And so it's like, donate to charities to donate for charities. The tax break isn't like the most incredible thing ever. So I think it's really important to understand that with deductions.
Starting point is 00:08:03 It's not a dollar for dollar reduction. Dollar to save a quarter quarter so it's like you're getting a little bit of a discount yeah i save this on the show a lot so our listeners are gonna be like lapid think of another phrase but oftentimes they say like don't let the tax tail wag, right? Like don't make decisions based on the taxes alone. Buying a house, giving money to charity. You just mentioned that, right? Yeah. And the same goes kind of transitioning to businesses. You will hear people say, oh, at the end of the year,
Starting point is 00:08:39 go buy a G-Wagon to lower your taxable income. That's a horrible tax strategy. Do not buy a G-Wagon to lower your taxable income. That's a horrible tax strategy. Do not buy a G-Wagon just for the tax benefits because they aren't there. And so on the business side, that's the first mistake I see is people chasing deductions to try and lower their taxable income. Right. Which means it's not a free G-Wagon. No, no, it's not free. Can we just really quickly before we move on, talk about that? Because I get a lot of questions about like the Range Rover, the G-Wagon.
Starting point is 00:09:09 Of course. Deduction. I forget the numbers that it's called. What is it again? It's bonus depreciation. There's section 179. 179. Yes. So basically how depreciation works is you take an asset and per financial rules, per tax rules, they say, this asset is good for this many years. So we're going to spread the expense of this asset out over this many years. And depending what the asset is, those asset lives are different. So for cars, it's spread out over five years. We call them accelerated depreciation rules. Instead of spreading that expense out over five years, we can instead take that expense all in year one.
Starting point is 00:09:49 So we can wipe out a lot of income potentially with that. But that's not to say, number one, you're still on the hook for cash paying this car off. So you can get underwater from that. When you later sell the car, you have to recapture that depreciation you took prior. So now you're being retaxed on that depreciation you took. By the way, these are like heavy cars.
Starting point is 00:10:13 This is like some... The 6,000 pounds. Right. So that's why people talk about the G-Wagon or the Range Rover. It's not like, you know, for all cars for whatever reason. I'm sure you know the reason. And you have to use it for business reason. I'm sure you know the reason. And you have to use it for business.
Starting point is 00:10:28 Like I tried to do this too. And then my accountants were like, well, do you have a log of like how much you've used this for business? I'm like, I want to blow my brains out. Yes. To even qualify for that depreciation, you have to minimum use it 50% of the time for business and how you substantiate it. And this is the IRS thing. This is you have to have a mileage log
Starting point is 00:10:47 showing how much of this was business, how much was personal. And then even though you've hit that 50%, does not mean you can deduct 100%. You're still deducting only your business use percent. So maybe it's only 60%. Maybe it's only 70%. And people get confused on what even constitutes
Starting point is 00:11:04 business mileage as well. Like if your primary place of business is your home and you're driving out for business, cool. All that mileage is deductible. If your primary office is somewhere else, your commute from your home to that office is not deductible mileage. Why not? You're going to work. Because devs the rules. Why not? You're going to work. Because that was the rules.
Starting point is 00:11:27 The rules. They consider that like commuting mileage, like just like you're going to work. OK, that doesn't count as work mileage. And I don't necessarily agree because the one thing I tell people about tax law is don't expect it to make sense. It's not going to. Great advice. Don't look for logic here. It doesn't happen. It's not going to.
Starting point is 00:11:41 Great advice. Don't look for logic here. It doesn't happen. That's why though I tell people it's so important if we can establish a home office, then that unlocks a lot of different mileage. So I think that's one of the huge benefits of having a home office, even if your home office deduction isn't that high.
Starting point is 00:11:56 Like my home office is literally the desk I'm sitting at. That's all I can legally write off because I don't use anything else in my house exclusively for my home office. But now because of that, all my business mileage is unlocked anywhere I go for business now, but I don't drive anywhere. So I don't even bother tracking it because I'm like, it'd be like $200 a year. It's not worth me, you know, getting the mileage app and tracking it all. So think about the time to actually be able to substantiate something. And if that's more than the deduction you're
Starting point is 00:12:25 getting for it, don't chase pennies. Yeah. Great, great advice. Yeah. And also just a fun fact that I learned during this whole 179 fiasco was that if you don't have like another car for personal use, then it's really hard to take a big chunk of this, you know, big 6,000 pound car or whatever. Anyway, it's like a whole thing. If you see it on TikTok and you're like, sweet, let me get a G-Wagon like December 30th or whatever. Do some due diligence first. That's the one thing about TikTok is a lot of people who are not taxed people will be on there talking about these flashy deductions. That's what I'm going to call it. I hear the G-Wagon a lot of people who are not tax people will be on there talking about these flashy deductions. That's what I'm going to call it. I hear the G-Wagon a lot. I hear you got to start
Starting point is 00:13:10 an LLC to get deductions. You need to hire your kids. You need to do the Augusta rule. And true, these are deductions, but with any tax things, there's always context and we need to think about how it applies to an individual's overall situation. So we can't just take these tax deductions and blanket tell people this is going to work for you. And this is going to work for you. And this is going to work for you. Because in reality, it number one might not work for them. Or number two, again, might not be worth the trouble of trying to get that deduction. Yeah. Like your time is money and this stuff could be paid in the ass. Yes. Yes. And two, I tell people your focus and time and energy should
Starting point is 00:13:52 not be on chasing tax deductions. It should be on growing revenue. Yes. Say that again, sister for the folks in the back. I'll say it again. Focus on growing your business and growing your top line, making your business efficient, making on growing your business and growing your top line, making your business efficient, making cash in your business, becoming very cash heavy, because then when it gets to tax time, it will not matter. You won't be stressed because if you have just so much cash or flesh in it, then okay, here's your tax bill. I have clients who it's like, okay, your tax bill is several million dollars. OK, write a check. Yeah.
Starting point is 00:14:26 Listen, these are high class problems to have big tax bills, right? Means you're making a lot of money, which is, I think, the thing that people should focus on versus the sort of like nickel and diming thing. And I hope we get some policing on the tick tock for the tax stuff. Anyway, I'm on there trying to fight it as much as I can. Thanks, sister. Thank you. Hold on to your wallets. Money Rehab will be right back. I love hosting on Airbnb. It's a great way to bring in some extra cash, but I totally get it that it might sound overwhelming to start or even too complicated
Starting point is 00:15:02 if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel
Starting point is 00:15:38 always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host. And now for some more money rehab. So let's double click on the individuals you mentioned, not necessarily business owners,
Starting point is 00:16:06 but like the W-2 employee types. What are some of the credits, deductions that folks miss out on that they might not see on TikTok or might not be the sexiest thing that they should think about? Are there any credits that are new this year that folks might not have heard of? There's the EV credit, which I feel like a lot of people have heard about, but that's if you buy a electric vehicle under these certain specifications, you can get a credit for it. There's also credits for certain HVAC upgrades you make.
Starting point is 00:16:35 Like I had a client reach out to me about, I think a new water heater. He's like, I think this is eligible for credit. And I was like, it absolutely is. So if you're doing like improvements to your home and stuff, be aware based on what you're doing and what kind of credits that might unlock. And that actually reminds me of something. If you are redoing your home, I heard about this, and this was actually really clever. The family had taken out the cabinets because they were
Starting point is 00:16:59 redoing their kitchen and then they donated those cabinets and they got a fair market value assessment on it. And then the cabinets were worth like they got a fair market value assessment on it. And then the cabinets were worth like, let's say $10,000. That's now a charitable deduction. Love it. So do you think about that? If you are redoing your home and you're pulling out, you know, certain structural things that you can donate, if it's worth over $5,000, you do have to have a formal appraisal on it. So, you know, you would have to do that. But I mean, if you're just going to throw it in the garbage anyway,
Starting point is 00:17:28 might as well get a tax deduction for it. Yeah. Now, same question for business owners. What are some of the tax credits that business owners should make sure they don't miss for 2022? So the famous accountant answers, it depends because a lot of business deductions are going to be unique to the industry you're in. So basically, the IRS says it has to be ordinary and necessary for what you do in your line of work. And so what I do in my line of work is going to be different than what you do. So our expenses might not look the same. There'll probably be some similar ones, you know, like we have similar tech needs, microphones, gmails, whatever. But then there's going to be other expenses that you're going to
Starting point is 00:18:13 incur, like probably lighting and different things, which I'm not going to have. And so you have to look at what is going to be normal for your industry. So a good rule of thumb is if you went and asked 100 other people who are in your industry, do you take this as a deduction? Yes, we do. Okay, that's ordinary and necessary for what you do. There's not like a hard line on what it is. But basically, if you need it to do your business, that makes a write off. And then two, this is a big one. You're not getting personal benefit out of it. Yeah. I mean, there was this thing that I had gone back and forth with clothing when I was a news anchor. And I remember my accountants at the time were like, think we do Vanna White's
Starting point is 00:18:54 taxes or whatever. And like those gowns, you're not going to wear to the grocery store. I'm like, hey, listen, you don't know how I go to the grocery store. But they were like, think of the Vanna White test or like this coat of armor test, right? If you're using it for work, like it can't be used for other things. Yes. And there's not even like the possibility it could be used for anything because it's like, okay, I have this suit I wore on air. We'll use your example. Well, could you use that suit elsewhere? It's not whether do you, it's just strictly could you there's a toxiper i know who was talking about they work with some pop star who was at an event like a red carpet event with a very heavy jeweled dress on the dress weighed like as much as she did and they said they were fighting
Starting point is 00:19:37 tooth and nail with the irs to prove she's not gonna wear this dress anywhere else there is nowhere else she can do this so the irs is pushing back on that yes they're going to wear this dress anywhere else. There is nowhere else she can do that. So the IRS is pushing back on that. Yes, they're going to be pushing back on anything below that. Okay, that scares me. In general, it's going to be for clothing unless it's required by your job. And by required by your job, I mean, safety equipment scrubs, if you're a medical professional, not like, oh, my job required me to wear a black shirt and black pants like that doesn't pass it like it has to be unique to the
Starting point is 00:20:09 job and there isn't the possibility for wear outside of work okay so we're not taking any clothing deductions this talk great but what else for Yeah. So it's kind of some common big ones. Home office, auto, travel is a big one. Travel, meals to put a little more context on meals. As a business owner, I can't be like, I'm hungry. I need to go out to eat. And like, this meal is a deduction. You actually have to be participating in business at the meal with another person. So another person has to be there, whether it's an employee, a contractor, a vendor, client, potential client. There has to be two people doing something unless I'm traveling. If I'm traveling, then my meals are deductible. So I see meals get wrong a lot. I will be going through my client's QuickBooks and I'll see Starbucks, Starbucks, Starbucks,
Starting point is 00:21:06 Starbucks, Starbucks, Starbucks, Starbucks, you know, like 20 Starbucks charges for the month and each charge is like $4 to $6. I'm like, this was just you getting coffee. I know what this is. So that's definitely one I see wrong a lot. Honestly, I think with business owners, more often than not, especially if they're smaller in size, I think they actually miss more deductions than they take. I think because they're
Starting point is 00:21:32 usually not as organized. And so things are going to slip through the crack. So that's another thing I really encourage is make sure we're running everything through a separate account just for organizational purposes. Like I went on a trip, I was doing some filming in New York a couple months ago, and I accidentally pulled out the wrong card for some of my expenses. And I wanted to die that when I had to go back and like, go through my bank accounts and pull out these certain expenses, because I'd ran them on the wrong card. And it's like, cool, this is now two hours of my time to sort through all this and figure out what the heck I'd done. it's like, cool, this is now two hours of my time to sort through all this and figure out what the heck I'd done. And so be organized because that's going to make it easier for you to see what you're
Starting point is 00:22:10 doing to make sure you're capturing all your expenses. And then it's going to also make it a lot easier when it's time to file because you already have it all. You're not having to hunt through 13 different bank accounts trying to figure out, oh, wait, did I use this credit card for that? Did I use this for that? Because if you're going to have to do that, you're not going to do it. So you're going to miss out. Dude, you're like reading my mind right now. This is literally how I spent my weekend. I was like, oh, I have to go through my personal Amex and like this other visa that I've used for certain things that I need to go find. And I was like, just forget it. I did that too. I did that. Like
Starting point is 00:22:45 I do this for a living and I still like get caught up and make mistakes. And I know how much of a pain it is for me to do it. And I can only imagine how much more of a pain it is for people who don't do this every day. That's correct. You know, I rarely ever have taken a salary. Like I just am a crazy person and reinvest all money into my business. But when I was thinking about taking a salary, can you talk a little bit about business owners taking their own salary? I had to do like some comp report. Yes. A reasonable comp assessment. Is that what you're saying? Yes. So if you start doing business or you just form an LLC,
Starting point is 00:23:27 by default, the IRS is going to say you are a disregarded entity. So everything you're reporting just goes on your individual return on a Schedule C. If you report that way, you do not take an official salary. You are just taxed on your net income. So I have come across Schedule Cs where people actually set up payroll and run a W-2 wage for yourself. Not supposed to do that. So if you're just a Schedule C filer, you just take money out of the account as you want. You're not taxed when you take the money out, you're taxed when you make it. When individuals are making more money, and this is such a hot topic of how much this is,
Starting point is 00:24:02 some people will say 50k net, others will say 200k net. I'm kind of in the middle of the 100k net. But when you're consistently making that kind of money, it can make sense to elect to be taxed as an S corp. And so when you do that, then you actually have to pay yourself a wage. And so that's what you're talking about. And you have to pay yourself a reasonable wage. And again, this is like kind of the nuanced gray area is it depends based on what your industry is, what's considered reasonable in the eyes of the IRS. So you have to be able to defend
Starting point is 00:24:33 if you're running a 60K wage, why that's a reasonable amount. And why they want you to run a reasonable amount is because any of your wage is gonna be taxed on self-employment tax and ordinary income tax. Everything else you make in the business is just ordinary income tax. So we're avoiding this kind of double taxation. And so what we want to do is we want to keep that wage as low as possible, because we're paying more in tax on that money we're making. But the IRS still wants their money, they still want their Social Security. They still want their Medicare. So sometimes they'll swoop in and say,
Starting point is 00:25:07 this isn't reasonable. You need to pay yourself more because you're not paying payroll taxes. You should be paying. Yeah. Does that make sense? No, it just brings me back to this nightmare time in my life. But cool, cool. Yeah, it is a hot topic. It's a really interesting balancing act, for sure. I mean, here's the thing. We're thinking about this at the end of March, right? Tax season. We started, you got on this call and you're like, I'm doing as well as I can be for this time of year. But don't you think the most effective, ultimately net-net stress-free way to go about doing your taxes is kind of like to think about it year round, right? Instead of like cramming. I've talked to a bunch of people, you know, even having business
Starting point is 00:25:51 calls on the weekends are like, oh, okay, got to go, got to go like do my taxes. I don't know, maybe that's an excuse to get off the phone with me. Also, shouldn't tax planning happen all year round as you're making these decisions to optimize taxes, as you're making big purchases with that car, house, etc? Oh, you are speaking my love language. Yeah, absolutely. There is only so much tax planning we can do after the year closes. So I always encourage people, hey, you need to be engaged with a tax professional, if that's something that's important to you. Sometimes tax planning is important to people.
Starting point is 00:26:27 Then go do triple tax. I don't care. But if knowing your tax liability ahead of time and wanting to make proactive moves is a priority for you, you need to be engaged with a tax professional who you are checking in with throughout the year to make sure your situation is being monitored and your taxes are being planned for
Starting point is 00:26:45 based on what we're forecasting your revenue at. And then we can make better decisions and advise you better that way. But the thing is that costs money to do. And so I always tell people, I don't want to work with you unless I know what you're paying me to advise you year round is going to save you way more than that. I'm not going to charge you $1,500 for this when I'm only saving you $500. I'll tell you, it's not worth it. Don't do it. And especially with businesses, I think that's even more important than with individuals to really be on top of everything. Because number one, you need to be tracking this in your business anyway. You need to see what your business is doing and make decisions off of it. So there's just good financial decisions that can be made
Starting point is 00:27:25 from tracking this completely irrelevant to tax. But then again, the tax piece is big. So if you're tracking each month and seeing where your profitability is, then you can start sending in those estimated tax payments, or some people don't like to pay those. They can just put the money in a savings account, but then you know, essentially what your liability is going to be. And there's not going to be any big surprises at the end of the year. Because I find that people, if they know ahead of time, then they're not stressed out. It's the not knowing that causes all the stress. Yep.
Starting point is 00:27:56 1,000%. So you said like you don't want to charge somebody, you know, $1,500 if they're going to save 500 or something like that? Are you just taking that number out of your, you know, like how much typically does a CPA cost? Yeah. It depends. We need to take a shot for every time I say that. Right. Honestly, it's all over the place. And there's kind of this bore in the industry between these older tax preparers and me, who's kind of the younger generation. These older tax preparers have this model of, you know, we're volume based, we're just going to churn and burn, you know, run through as many returns as we possibly can, have our staff work 80 hours a week during tax season. And we're only going to charge $200
Starting point is 00:28:45 a return. So there's very much preparers out there who would only charge you 200 bucks. Is the quality there? I don't know. I don't know. And then a lot of us, we set our minimums at 1500. But with that, I'm saying, you know, this is our minimum, but you're not just getting tax prep. You're also getting strategy and advisory throughout the year. So if you have questions for me, I'm here. And I'm going to periodically be checking in with you. But again, I only tell people that who I know it will benefit. And I've just been in the industry long enough. I know with people situations and kind of what those key point indicators are, whether that's something that would be valuable to them or not. So what's a good way to find a good CPA that's not going to scam you?
Starting point is 00:29:29 There is a crisis in our industry. There are not enough tax preparers. So there's a huge CPA pipeline problem. There's not enough people to service all the clients who want it. So lots of people are firing clients. So everyone is having trouble finding tax preparers. And there's not like a database you can go to where they're just all laid out with all the Google reviews. And so asking your friends and family, hey, who have you used? Who have you liked?
Starting point is 00:29:55 And I'm dead serious on this. If you go to hashtag tax Twitter and say, hashtag tax Twitter, I'm looking for a tax preparer in this area, or maybe you're like any tax preparer, it doesn't matter if they're local or not, who can help me? Because tax Twitter is kind of a more progressive type of space and community. And so they're going to be kind of more like me where it's like, we're more concerned about the relationship. We're not doing this churn and burn model. We want to strategize with clients and save them taxes. And so it's just like
Starting point is 00:30:25 a great group of people. They're there to learn. And so that's why I had some people hashtag tax Twitter. Wow. Learned something new. There's a hashtag for everything. Okay. So if you do that and you find somebody, I guess, or find a few people that you're going to interview, what are some of the good questions to ask? So the first thing would be to understand what you're paying for and what you're getting. Are you paying for tax prep only? Or are you also paying for strategy? So understanding what the full scope entails, understanding communication and expectations, asking how do you communicate? What are typical turnaround times on communications? Because a huge complaint I get when new clients
Starting point is 00:31:11 come to me is my CPA never responds to me. So if you want an engaged CPA, you want to be asking them what are your internal guidelines on when a client asks you something? How soon are you getting back to them? What are your turnarounds on projects? Understanding how they bill for things because some CPAs will say, I'm just billing hourly, while other CPAs will say, I bill by form. So depending how many forms we have, it costs more. So it's definitely a complexity thing. If you are in a specific industry or niche, asking them, do you service other clients in this? That's another good question. As well as asking them, you know, kind of back to the engagement letter. So any good tax professional you work with is going to send you an engagement letter and it's going to lay
Starting point is 00:31:54 out what they're going to do and what they're not going to do. Read that very, very closely because it might say in there, we will charge extra if we have to respond to IRS notices for you. Well, if you don't read that closely and you get an IRS notice and you're like, hey, I got this notice and you're expecting them to just handle it. You think that was included and it's not. That can cause some tension and friction in the relationship. So just asking a lot of questions and understanding what am I actually paying for and getting. and understanding what am I actually paying for and getting. Totally.
Starting point is 00:32:26 I have so been there. I was like hourly. What the fuck? Are we like lawyers here? I know. Yeah. Yep. I hate hourly.
Starting point is 00:32:35 I hate it. And I only charge it in extreme circumstances when I truly don't know. And it'll usually be projects. It won't be like, you know, I'm running to the post office for you. That's $500. It's, I have no idea how long it's going to take me. I cannot scope this out in any capacity. I'm going to charge you hourly for this.
Starting point is 00:32:53 But otherwise, I like to build my form because then it's on me to be efficient. Because if I'm charging hourly, then I make more if I'm inefficient. That doesn't seem fair to the client. Amen. I end all of our episodes with a tip listeners can take straight to the bank. I'm sure you have a thousand of them, but if you had just one for today, one piece of tax advice listeners should keep in mind in this tax season, what would it be, Laurelyn?
Starting point is 00:33:19 Stay organized. Stay organized with your stuff. And the easiest way to do that is as soon as stuff comes in so tax forms business expenses anything make sure it's stored in a organized digital manner and be doing this throughout the year don't try and do it all at once that's what's going to cause stress anxiety take an hour each month and make sure you're keeping up on that where would that be this digital land what would you suggest you'd have to check the security level of sure you're keeping up on that. Where would that be, this digital land? What would you suggest? You'd have to check the security level of if you're using Google Drive.
Starting point is 00:33:51 So maybe Google Drive. I don't use that. I use Box, but maybe something like Box, something like Dropbox. Any type of secure file sharing system is where I personally would keep it. Because again, anything with social security numbers and stuff, you want an extra layer of protection.
Starting point is 00:34:06 If you're storing stuff without social security numbers or like very, very sensitive financial information, something like a Google Drive would be fine. You're the best. You're the coolest tax person I've ever met. That's a fact. That's just true. You're like, the bar was very low.
Starting point is 00:34:22 I just had to not trip. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com
Starting point is 00:34:42 to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.

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