CPA's for the little man. Or, what can an accountant do for me?


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VaughnT
January 3, 2003, 07:08 PM
This is a subject that keeps coming up at work and which I am woefully ignorant of. I guess I just don't understand what accountants do and how it could be of help to me.

Just what can I write off on my taxes? I keep all my receipts (being anal is a good thing) but is that necessary? Will using an accountant pay for itself if you don't make a lot of money? What's itemization?

Can I write off my ammo/gun purchases because I work for an armored car company? Can I get more money back because I have a 80 miles of commute every day?

I guess the thread title says it all: what can an accountant do for a peon?

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Triad
January 3, 2003, 07:15 PM
I think you could write off ammo purchases, as long as they're work related. I think gun purchases would have to be something you're using on the job tho.

El Tejon
January 3, 2003, 07:21 PM
An accountant will allow you more time to go shooting!:D

Coltdriver
January 3, 2003, 07:27 PM
I would say that if you are a salaried person without a lot of itemized deductions that for the most part an actual accountant would not be the best use of your money. There would be some exceptions if you are involved in large or complex financial transactions, especially investment or retirement or real estate related.

You might want to try getting a copy of one of the tax prep softwares that are available for around $50. You can get them at any Best Buy. And you can usually deduct the cost of the software from your income as a tax prep expense!

I have used them to pre define my tax picture so that I could intelligently probe my accountants decisions and creation of my tax returns. They are generally excellent and you can do some what if calculating. For example, should you use milage or actual expenses on your vehicle (if it is elibible as an itemized deduction) and which will get you the most break. I know that in some instances, a gun is a qualified piece of equipment required for the performance of your job and it can be legitamately written off against your income. The software will guide you through accurate definitions of write offs etc.

The apps take you through an interview style of questioning and you can make multiple run throughs if you want to see what inputs vary the result for you in your favor. Using them you can decide if you should itemize or go short form.

Bacchus
January 3, 2003, 09:06 PM
I agree with the suggestion to use software--at least try it. You'll probably find that it makes things go faster and you can deduct the cost of the software.

If you find yourself scratching your head answering the questions because you don't know which of your 5 cars or 3 horses is deductible, then you probably need an accountant.

Soap
January 3, 2003, 09:23 PM
The others have given some good advice so far. I think another option to consider would be to use the accountant only to assess your tax situation a single time. Then for the next few years you will be able to employ their professional advice. Then any time your situation changes, you can have your accountant assess it again.

I've studied accounting fairly comprehensively in my education so far. But I don't know jack about the tax code. So at age 21 I already have a professional accountant helping me with my taxes. I suppose that it is up to you to decide whether or not your financial situation deems the use of a professional or not. I have no idea what your financial situation is so I really can't give you a sure answer.

VaughnT
January 3, 2003, 11:04 PM
Are accountants good for people that make less than $35k/yr? How much money could they save? Someone told me that you can't itemized unless you have more than 4k in possible deductions, and that there is very little that can be deducted (ie, if the company provides a gun, you'e under no obligation to buy one. Therefore, the purchase of a firearm is not deductible)

I don't know. I just get the idea that an accountant is for rich folks, not for the blue-collar worker.

Soap
January 3, 2003, 11:20 PM
Vaughn,

I don't think the huge factor here is your income, but rather the possible deductions that you can claim. Some deductions are deductible interest, medical bills, charity contributions, loss due to theft, and employee expenses which are not reimbursed (you might want to look into that more closely). Another detail is that other expenses such as job-related or investment expenses can be deductible if they are more than 2% of your AGI (Adjusted Gross Income).

An accountant may be able to help you decide whether you are eligible for these itemized deductions. Since I'm a tax code newbie so I can't help a ton, but hopefully you'll get something out of this info. Just make sure that your marginal benefit of getting an accountant is above the marginal cost.

Greg L
January 3, 2003, 11:29 PM
(this coming from someone who worked for HR Block for a few years and is now self employed - take it for what it's worth)

If the only tax document that you get is a W-2 then don't bother with an accountant. There is nothing that you can legitimately deduct that will make that much of a difference. If you have an expensive house/car/other personal property that is taxed and have a job where you can itemize then maybe.

If you have your own business/company (even if part time) then by all means get an accountant. By their tax laws, the government WANTS you to take a risk and try things on your own (the more you succeed the more they collect). The sheer amount of things that you can legitimately deduct at a business owner boggles the mind. The key thing is that you are attempting to show a profit. As long as you can prove that and can justify things then you can get as creative as you want to be.

Greg

Preacherman
January 3, 2003, 11:33 PM
The first two posts made a valiant effort to keep this thread firearms-related... but it isn't really, is it, guys & gals? Closed as OT.

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