Free Tax Advice From A Top Financial & Tax Advisor
You have filed your taxes on time, paid what you owed or better yet, are expecting a tax return – then the unexpected happens. A letter from the IRS shows up in your mailbox! Most people are not prepared for how to deal with a letter from the IRS and many do not know who to go to with questions. We’ve got you covered!
We asked Michael Menzies, a top financial advisor and tax consultant based in the United States but with clients globally, what he advises his clients to do when Uncle Sam sends you mail. Here is a little about him and some free advice!
Q: How long have you been an asset and tax advisor?
Michael: It all started when I began writing business and financial plans for clients around 2005. Friends needed help starting small businesses. I had experience in financial planning with a background in economics and family involved in real estate, finance, tax and small business planning. In 2013 I expanded my client base and began providing investment and insurance management. I teamed up with a CPA friend to support my client’s taxes. By 2014 we started a succession plan for his retirement and in 2016 my friend moved on to enjoy time with family.
Q: On average how many tax returns do you and your firm file during “typical tax season”?
Michael: We file roughly 250+ tax returns per year and take on 20-30 new clients every year.
Q: Approximately what percentage of clients receive letters from the IRS?
Michael: I would say about 10% of clients receive some sort of letter each year. Sometimes from the IRS sometimes they are from a State or local jurisdiction.
Q: What is the 1st piece of advice you give to clients who receive an IRS letter?
Michael: Read the letter!! Many times clients will send us a letter they have received and the client has not read the document. It may be a simple and benign issue that is easy to resolve with no stress and no fuss. But you can’t know unless you read the letter.
Q: What is a common letter that people receive?
Michael: Often clients receive letters about their Affordable Care Act payments. These letters are typically associated with a failure to file supporting paperwork. It is often an easy fix but sometimes a bit of follow up is also needed.
Q: Does a letter from the IRS mean that you’ll be audited?
Michael: No it does not. In fact a common misconception is that the IRS is out to get tax payers. Often, they just need a bit more information and the best way to reach out to a tax payer is to simply send them a letter.
Q: What if the IRS is wrong or there was an error and you don’t have the information requested?
Michael: Well there are a few ways to deal with that. First, you can contact them and explain the situation. If you have some time available to call them and speak with an agent, that can be a good first step. If the issue is confusing to you or complicated, you may want to have someone help you with a reply. Firms like ours can do that for you. If you are confused, just ask for a hand and you may be surprised at how easy it is to fix what needs to be fixed. If you do reach out to the IRS, try calling on a Tues, Wed or Thurs. First thing in the morning will also be the best time to call to cut down on your wait time.
Q: Is it expensive to hire an accountant or tax preparer?
Michael: I am bias, but I think it is a good deal for your money. If you have simple issues, you can resolve them yourself. If things get complicated a little professional help can go a long way.
Q: Do you recommend people to do their own taxes, if so which company would you recommend they use?
Michael: If tax payers have very simple tax returns, yes they can easily do their own taxes. For $100 or so you can buy Turbotax or any other software and do your own. I don’t really have a preference for which software to use. They all do a pretty good job for simple tax returns. But, if you are running a small business; have complex accounting issues; live in a state with complex filing requirements; etc. it is often a good idea to have someone help you out.
Q: What’s your # 1 piece of tax advice?
Michael: Don’t be afraid to ask for help! Taxes should not be complicated, but all too often they are. If you get behind or fail to file returns, the taxing authorities will rarely let it go. It is important to keep your tax house in order so you don’t end up with unnecessary penalties and interest. Also it is really not worth the stress of having your taxes in disorder. By asking for help you can often get things back in shape quickly with minimal stress.
As always, if you need tax advice or just have a question for Michael, feel free to contact him.