Q-1:

Subject: Extension dates

I should probably try to send in all our own extensions for 2005 to keep from asking you folks to do more and more for us.  But I will have to ask you or Kerry to send me a list of due dates for both personal and corporate ones to be sure I get them in on time. I didn’t find them on taxguru.org when I searched there.

A-1:

Corporate income tax returns (both C & S) or extensions are due two and a half months after the end of the corp’s tax year.  For calendar years, which all S corps must use, this means the extension is due March 15.

The corp extension is Form 7004 and gives an automatic six months.  If you do want to do it yourself, you can download the form from IRS.

 It should be mailed to the same IRS service center as shown on the instruction cover letter that was with your previous year’s tax return.

Good luck.  I hope this helps.

Kerry

Q-2:

Kerry,

Yes, the info you sent on extension due dates helps a bunch.

Does the IRS see any difference between extensions filed by individual or corporate taxpayers themselves and extensions filed on behalf of the taxpayer by their tax preparer? 

It “seems” like extensions filed by a professional tax preparer might carry more weight with them somehow? But this might be a misperception or really a completely non-issue with them.

Thanks for your insight.

A-2:

I have never heard of or noticed any difference in IRS attitude between when people send in their own self-prepared extensions or if it’s done by a tax pro.  Extension forms are just entered into the IRS computer and aren’t really scrutinized very closely by IRS. 

While it may sound self serving, that is definitely not the case with actual tax returns.  Because they are so complicated, IRS does look more closely at self prepared returns, especially those done by hand, because there is a much higher probability of an error than with a tax pro’s computer prepared return. 

Kerry

Follow-Up:

Kerry,

Thanks for your views on self-filed extensions being okay. I definitely understand the need to have YOU do our actual returns– especially since we have set-up a corporation.

I feel sure I can follow your directions to file our extensions for 2005 and will send you a copy of each. 

 

 

From a client who recently moved and is having some difficulty locating a new bookkeeper:

Hi Kerry,  I contacted…who can do the Quick Books software, but likes to use “Creative Solutions Write Up for Windows”. Please let me know what you think…I thought we might change over  with the next year’s taxes.  Thanks,

My Reply:

If you want me to continue to work on your taxes, you will need to keep your data on QuickBooks.  Years ago, I did try to work with a variety of different accounting programs that clients and their bookkeepers were using, including some from PeachTree and Creative Solutions. It became a total mess tying to keep up with all of those different programs.  It was also a mess when they would send me printouts of their general ledger and then I had to manually write up adjusting journal entries to make their books match the tax returns.

It has been going much more smoothly since we migrated everyone over to QuickBooks, where I can check out and adjust their data details at the same time I am working on the tax returns.  I do have all of the QB programs, from 1999 through the most recent 2006, installed on my computer; so clients don’t have to upgrade every year if they don’t want to.

As I constantly have to remind people, using QuickBooks isn’t for my benefit. It is the most widely used accounting program in the country, and has become the standard for small businesses.  This means that it is much easier to share data with more people and to find bookkeepers who can work on it.  There are several million QB users around the country. I don’t know the size of Creative Solutions’ user base; but I’m sure it is a small fraction of QB’s.  This means that if you convert your stuff to that program, you will have a harder time finding people to work with it. 

It’s your call. If you find it more convenient to work with local tax and bookkeeping people, I understand and will have no hard feelings if you want to switch.  However, if you want me to continue to work on your tax returns, your data must be on QuickBooks.

I don’t mean to be difficult with this; but it is based on too many hassles trying to coordinate other accounting programs that I don’t want to have to repeat.

Let me know if you have any questions. 

Kerry

Follow-Up:

Hi Kerry,  No problem…Quick Books it is.  They said they could use Quick Books if you required it.  I will probably interview them shortly for bookkeeping only as I am happy with our relationship.  I will wait until we have filed the current return and then talk to you again before making  any changes with …  Many thanks for your help on this.