If it seemed like they might be necessary, would you bring up the issue of estimated quarterly payments for the coming year with a client, or would it be his responsibility to ask about them as they are not part of preparing a tax return?
I do only unpaid prep for the poor and befuddled and, I'm sure, carry some prejudice from my prior life as a tax collector, but IMO it's bordering on malpractice to fail to address the issue with a client. After all, that's one of the reasons I strongly assert that anyone who goes into business without a good consultation with an accountant is an idiot.
Yes, I understand that you're asking in the context of return prep, not a consultation. It makes no difference to me.
? Not part of the return? The estimated payment vouchers print along with the return, I considered this part of the process. Now, for many (not all) retirees, their total tax bill is less than their RMD, so they can forget the quarterlies, and just withhold the entire tax liability from the RMD close to year end.
Joe
Well my software Taxwise, doesn't automatically prepare 1040es vouchers! Not unless I instruct it to do so of course. We should remember of course that it is always up to a paying client whether or not he elects to make estimated payments.
However! As a matter of course, I believe it our duty to discuss the issue and heavily recommend that he make the payments and offer to prepare the estimates and vouchers should he so choose.
Actually, for many of my clients, esp those who's bookkeeping I do, I will provide the vouchers each quarter, refigured each quarter, to keep him on track. Thus the payments might be : I - 2000, II - 3700, III
- (after business downturn) 800. But for the IV quarter, the last payment will be very much on target, and well within the 1,000 leeway.
ChEAr$, Harlan Lunsford, EA n LA
That $1,000 leeway applies only to the balance due after withholding credits, not ES payments. The reason I know this is that I got corrected for the same error, and it stuck with me. When ES payments are invovled you have to meet the 100/110% of last year or 90% of this year safe harbor.
True of course, but in the example I just mentioned, since quarterly payments are predicated on actual results, there's always page 3 of the
2210 to use. Besides, notice that for 2nd quarter above, the 3700 is enough to carry over to third quarter at least.ChEAr$, Harlan
Every tax preparer I've used in the past 35 years has done the next year's estimated taxes as part of the process. I'd never use a preparer who didn't, or who charged extra for them.
If the next year's estimate is a matter of basing it on previous year's figures, no extra work is involved, hence no added charge. But for those of us who take the time and effort to accurately estimate and project figures based on reasonable assumptions, it's worth at least a fee for the extra 30 minutes.
ChEAr$, Harlan Lunsford, EA n LA
There are many instances where that 30 minutes can turn into hours.
Keep in mind that the IRS no longer sends vouchers to taxpayers who use a paid preparer; therefore it should be standard practice to discuss and, at the least, prepare blank vouchers for those who might encounter an underpayment situation. It would have been nice if the IRS had informed us of this change at the beginning of the year (I heard circa April 1st).
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