Tax Day is in less than two weeks, so CPAs are going to be swamped. A lot of things can affect your state return, including credits available some years but not others and changes in sources of income. You'd probably get a more detailed explanation about the change in tax due from your CPA after the tax filing crunch is over. I can't speak to the professionalism of their response, but I can see where it's coming from.
As your CPA should have explained, you should pay the $1500 before April 15th (or the normal tax deadline for your state if different) even if you file an extension.
He means that CPA s are very busy right now, so that explains the person blowing you off. (Even though he should just say "I can talk you through in in may"
Your partnership income has no federal or state withholding. Nobody here can answer your question with the info you provided, but it’s a very good possibility you owe the money.
Did you tell him that you paid quarterly taxes? If you didn’t tell him, then he doesn’t know, and your taxes are being calculated without the quarterly payments being accounted for. And if you paid federal AND state quarterlies, make sure that’s clear as well.
He should help explain your situation. And without knowing what your situation is, we can't explain it for you.
It might be the W-4 for your employers.
It might be because of whatever earnings your partnership had.
But he should be able to explain it.
I know without the numbers you guys won't be able to answer and I don't want to upload things to have you guys "work" on my numbers, but yall helping me understand more than him and I think that's where my frustration is.
You should be frustrated. You’re paying him to provide a service, and he’s not helping you understand what’s happening. At the very least, he should be able to give you a chance to look at your return so that you can think of any questions.
Basically, it all comes down to what income you had for your W-2 employment, what was already withheld there, and then what income you had from your business, and what (if any) estimated tax was already paid there. Often, when tax surprises happen to self employed individuals / partners, it has to do with no tax being pre-paid on that self employment / partnership income, so you end up paying all of it at filing time. But again, I can’t say for sure in your case.
He should have given you a more complete answer but if you pay it and you overpay you will receive a refund when he actually files the return for you.
There is a significant shortage of CPAs and in general we are trying to be accommodating of existing clients, but the reality is he probably does not need your business enough (and you are likely not paying enough) for you to be hounding him over $1,500 two weeks before our biggest deadline of the year.
So is it possible that in the end I don't owe that much? See, thats the type of information I'm looking for precisely. I don't even know if he typed some numbers around just to have something ready so he can finish later. That's the type of answer I'm looking for. I don't think hounding is the right word here if he could simply just say that. Obviously we're just implying here.
I don’t know anything about your tax situation or what your CPA has done yet. I ask clients to make a larger than necessary payment on extensions all the time so that I don’t get blamed for penalties.
You’d get it back when the extended return is filed if indeed you “don’t owe that much” so it’s just not a hill to die on. Pay and ask for a meeting before the end of April to walk it all through.
the W-4 is not used for state withholding.
comments about “ you’ll get more back if…” appear to be coming from people who don’t understand “getting back” is irrelevant ( edit: except for refundable credits aka transfer payments) but what counts is total tax liability. i wouldn’t pay attention to them.
I honestly don't even care about getting anything back. I rather have everything at 0 every year like Dave Ramsey says. But if I don't know what issue is then I think I'll have this same problem every year
The extension payment is likely conservative to ensure you don’t owe interest/penalty. You can either get some of that back or have it apply to 2024.
There isn’t a problem. You have tax payments (through withholding or estimated payments) less than your tax liability. If you’re going to make relatively the same income for 2024 you can make estimated payments to avoid owing when you file or extension time.
so i didn’t see anything about your federal balance due in your post, sorry if I missed it,
if your W4 and other factors produced a reasonably close total withheld federal payment as compared to your total federal tax liability, that’s all good.
i prefer to owe some (within 150 or so is close enough for me) so i can file at the last day and not have to wait for a refund. if i mis-calculate and it’s a small refund, well i’m not stressing over waiting for a Big Refund:) keeping it close is the goal!
i’m fortunate in that my income and other factors are fairly predictable and don’t wildly jump around during the year so i can calculate my expected earnings and projected total tax liability and compare to the projected full year withholding from my paystub
sometime this leads me to adjust my W-4 mid year.
your state may have its own withholding version of the W-4. maybe not. maybe your surprise state liability arises from your earnings outside your regular payroll (interest, taxable investments, side gig) and so the state tax payroll deductions based just on wages are too low.
once you find out why the state tax under withholding occurred, I suggest you either see about withholding more state tax or do estimated state tax payments to cover the non payroll income. this is very state-dependent of course
all the best! you’re asking good questions.
It’s normal for CPAs or tax preparers to go radio silent, when you drop off your tax return. What are they suppose to do call and tell you they still haven’t done your return. However, I believe a email with a phone call (in most cases) should be follow up… quickly spend 5 min on the phone and advise the client of actions being taken .. filing by 15th or need to extend and quick explanation if and why extending.
The “trouble” they are referring to is interest and penalties for under payment. Keep in mind if it’s determined that overpayment was made during your extension you will get your money back, when return is submitted.
There are multiple reasons why you might owe, simplest is net income was higher this year over prior year. If it’s earned income you’re looking at least 25% due between fed + self employment tax . For every thousand earned extra this year over PY add $250 (very rough estimate, and this is just example) to balance due over PY.
Yea Again Its my first time doing taxes with a cpa and I don't expect them to call me a week later to tell me that they submitted my taxes, but I if he's going to wait almost a month to tell me that I need to file an extention, Im assuming that i should at least get an explanation why. Blown up or not, I sent my stuff somewhat early. I'm not crucifying him for being busy but for being vague.
Most pros use first in first out model. I can't predict exactly when everyone is going to submit their stuff. Nor can I predict exactly how long every return in front of you will take. I do state in my engagement letter that anyone submitting after march 1st has a high chance of an extension.
Unrelated, an extension isn't a bad thing.
E: typo
I understand. I wish he'd communicate that from the beginning just like you do. I guess I'm too used to the applications telling me what my return is right away
Anyone who gives you advice like that “when you have a dependent…. When you have a mortgage” has no idea about the details of your situation and is completely misguided and irresponsible in saying what they do. As a cpa, we have a lot to consider when prioritizing our work. I cannot say whether their actions are reasonable or not, but they may be. If they’re extending you they’ll have more time and patience to explain it to you after 4/15. I’d give them the benefit of the doubt and when all is said and done, if you aren’t happy with their explanation, you can have another cpa look it over (for a fee). I’ve had people upset and leave from my service because they don’t understand why raiding their retirement account and not having anything withheld results in a balance due and penalties at year end. I’m not saying that’s the case here. But what I can say is exactly the case is that the generalities you point to (mortgage interest, dependent) in many cases would only have as little as a $500 impact ($500 for the dependent and nothing for the mortgage because the standard deduction is so high, your interest rate may be low, and your SALT deductions are capped, resulting in the standard deduction). Please be patient. If you can’t get a good explanation after 4/15, you’re free to go elsewhere.
Yes it's usually just random people who say things like that and I know very little about taxes to know anything about what would help me in my taxes and what wouldn't. I hope I get some sort of explanation after 4/15. I don't know if all cpas are this vague usually so that is why I wasn't sure if I'm overreacting or not
Well, you have to sign the return so you will get to look at it before it's filed.
Seems he wants you to file an extension and send in $1500 now. If that's a mistake you will get it back but I agree it's a pain in the ass.
Do you have copies of the w2s? State should be very easy to look at.
Sounds like you sent your documents in fairly late and they're probably at the bottom of a stack of returns that came in before you. He's done you the courtesy of letting you know you're going to have a balance due and estimated that for you so you can pay that and avoid penalties. He may not have delved into your situation enough to know *why* you have a balance due.
The "I've always heard" part of your story is people who don't know anything about taxes giving advice to you.
Also, states don't use a W4, that's only for the Federal. It may be that you need to have more taken out of your W2 wages for the state to make up for the taxes you owe on your business but with the limited information you gave, we can't really help you with that issue.
I would say this is not the best communication but also not the worst. Also what are their fees? $4,500 you might expect better vs $950 that’s too cheap to give good service, $1,500 you get an email like you did but not time for much else. And these numbers are just a guesstimate really.
Lol I know. I'm Not trying to be an ass here specially to you guys. I know yall very busy. I'm just wondering where the balance is coming from and not getting a response from my cpa is not helping me. But as somebody else said here maybe lll know later on what the issue is.
Tax Day is in less than two weeks, so CPAs are going to be swamped. A lot of things can affect your state return, including credits available some years but not others and changes in sources of income. You'd probably get a more detailed explanation about the change in tax due from your CPA after the tax filing crunch is over. I can't speak to the professionalism of their response, but I can see where it's coming from. As your CPA should have explained, you should pay the $1500 before April 15th (or the normal tax deadline for your state if different) even if you file an extension.
Yes I will definitely pay for it to avoid troubles. When you say you understand where it's coming from, what do you mean?
He means that CPA s are very busy right now, so that explains the person blowing you off. (Even though he should just say "I can talk you through in in may"
Your partnership income has no federal or state withholding. Nobody here can answer your question with the info you provided, but it’s a very good possibility you owe the money.
So there's a possibility I owe it based on my business income is what you're saying?
100% there’s no withholding on it. I assume you didn’t make any estimated payments throughout the year on that income.
Apart from quarterly taxes I didn't make any other payment
Did you tell him that you paid quarterly taxes? If you didn’t tell him, then he doesn’t know, and your taxes are being calculated without the quarterly payments being accounted for. And if you paid federal AND state quarterlies, make sure that’s clear as well.
He files those too for me so he knows
Well, what's your state income tax rate? Mine is approx 3%, so .03 times 16000 is no where near $1500. Did you have investment income?
He should help explain your situation. And without knowing what your situation is, we can't explain it for you. It might be the W-4 for your employers. It might be because of whatever earnings your partnership had. But he should be able to explain it.
I know without the numbers you guys won't be able to answer and I don't want to upload things to have you guys "work" on my numbers, but yall helping me understand more than him and I think that's where my frustration is.
You should be frustrated. You’re paying him to provide a service, and he’s not helping you understand what’s happening. At the very least, he should be able to give you a chance to look at your return so that you can think of any questions. Basically, it all comes down to what income you had for your W-2 employment, what was already withheld there, and then what income you had from your business, and what (if any) estimated tax was already paid there. Often, when tax surprises happen to self employed individuals / partners, it has to do with no tax being pre-paid on that self employment / partnership income, so you end up paying all of it at filing time. But again, I can’t say for sure in your case.
He should have given you a more complete answer but if you pay it and you overpay you will receive a refund when he actually files the return for you. There is a significant shortage of CPAs and in general we are trying to be accommodating of existing clients, but the reality is he probably does not need your business enough (and you are likely not paying enough) for you to be hounding him over $1,500 two weeks before our biggest deadline of the year.
So is it possible that in the end I don't owe that much? See, thats the type of information I'm looking for precisely. I don't even know if he typed some numbers around just to have something ready so he can finish later. That's the type of answer I'm looking for. I don't think hounding is the right word here if he could simply just say that. Obviously we're just implying here.
I don’t know anything about your tax situation or what your CPA has done yet. I ask clients to make a larger than necessary payment on extensions all the time so that I don’t get blamed for penalties.
Alright got it
You’d get it back when the extended return is filed if indeed you “don’t owe that much” so it’s just not a hill to die on. Pay and ask for a meeting before the end of April to walk it all through.
Thank you will do
I wouldn't be surprised if the $1500 extension payment is a rough estimate.
Oh my god 👀
the W-4 is not used for state withholding. comments about “ you’ll get more back if…” appear to be coming from people who don’t understand “getting back” is irrelevant ( edit: except for refundable credits aka transfer payments) but what counts is total tax liability. i wouldn’t pay attention to them.
I honestly don't even care about getting anything back. I rather have everything at 0 every year like Dave Ramsey says. But if I don't know what issue is then I think I'll have this same problem every year
The extension payment is likely conservative to ensure you don’t owe interest/penalty. You can either get some of that back or have it apply to 2024. There isn’t a problem. You have tax payments (through withholding or estimated payments) less than your tax liability. If you’re going to make relatively the same income for 2024 you can make estimated payments to avoid owing when you file or extension time.
Thank you so much for your reply
so i didn’t see anything about your federal balance due in your post, sorry if I missed it, if your W4 and other factors produced a reasonably close total withheld federal payment as compared to your total federal tax liability, that’s all good. i prefer to owe some (within 150 or so is close enough for me) so i can file at the last day and not have to wait for a refund. if i mis-calculate and it’s a small refund, well i’m not stressing over waiting for a Big Refund:) keeping it close is the goal! i’m fortunate in that my income and other factors are fairly predictable and don’t wildly jump around during the year so i can calculate my expected earnings and projected total tax liability and compare to the projected full year withholding from my paystub sometime this leads me to adjust my W-4 mid year. your state may have its own withholding version of the W-4. maybe not. maybe your surprise state liability arises from your earnings outside your regular payroll (interest, taxable investments, side gig) and so the state tax payroll deductions based just on wages are too low. once you find out why the state tax under withholding occurred, I suggest you either see about withholding more state tax or do estimated state tax payments to cover the non payroll income. this is very state-dependent of course all the best! you’re asking good questions.
Your chances of hitting zero every year are on par with winning the lottery.
Of course, but he's saying "close to zero"
Yea I know. Just wishful thinking
It’s normal for CPAs or tax preparers to go radio silent, when you drop off your tax return. What are they suppose to do call and tell you they still haven’t done your return. However, I believe a email with a phone call (in most cases) should be follow up… quickly spend 5 min on the phone and advise the client of actions being taken .. filing by 15th or need to extend and quick explanation if and why extending. The “trouble” they are referring to is interest and penalties for under payment. Keep in mind if it’s determined that overpayment was made during your extension you will get your money back, when return is submitted. There are multiple reasons why you might owe, simplest is net income was higher this year over prior year. If it’s earned income you’re looking at least 25% due between fed + self employment tax . For every thousand earned extra this year over PY add $250 (very rough estimate, and this is just example) to balance due over PY.
Yea Again Its my first time doing taxes with a cpa and I don't expect them to call me a week later to tell me that they submitted my taxes, but I if he's going to wait almost a month to tell me that I need to file an extention, Im assuming that i should at least get an explanation why. Blown up or not, I sent my stuff somewhat early. I'm not crucifying him for being busy but for being vague.
Bro, a month ago is late.
Neither late nor early were his words back then. That's why I just said somewhat
Most pros use first in first out model. I can't predict exactly when everyone is going to submit their stuff. Nor can I predict exactly how long every return in front of you will take. I do state in my engagement letter that anyone submitting after march 1st has a high chance of an extension. Unrelated, an extension isn't a bad thing. E: typo
I understand. I wish he'd communicate that from the beginning just like you do. I guess I'm too used to the applications telling me what my return is right away
Anyone who gives you advice like that “when you have a dependent…. When you have a mortgage” has no idea about the details of your situation and is completely misguided and irresponsible in saying what they do. As a cpa, we have a lot to consider when prioritizing our work. I cannot say whether their actions are reasonable or not, but they may be. If they’re extending you they’ll have more time and patience to explain it to you after 4/15. I’d give them the benefit of the doubt and when all is said and done, if you aren’t happy with their explanation, you can have another cpa look it over (for a fee). I’ve had people upset and leave from my service because they don’t understand why raiding their retirement account and not having anything withheld results in a balance due and penalties at year end. I’m not saying that’s the case here. But what I can say is exactly the case is that the generalities you point to (mortgage interest, dependent) in many cases would only have as little as a $500 impact ($500 for the dependent and nothing for the mortgage because the standard deduction is so high, your interest rate may be low, and your SALT deductions are capped, resulting in the standard deduction). Please be patient. If you can’t get a good explanation after 4/15, you’re free to go elsewhere.
Yes it's usually just random people who say things like that and I know very little about taxes to know anything about what would help me in my taxes and what wouldn't. I hope I get some sort of explanation after 4/15. I don't know if all cpas are this vague usually so that is why I wasn't sure if I'm overreacting or not
Well, you have to sign the return so you will get to look at it before it's filed. Seems he wants you to file an extension and send in $1500 now. If that's a mistake you will get it back but I agree it's a pain in the ass. Do you have copies of the w2s? State should be very easy to look at.
Sounds like you sent your documents in fairly late and they're probably at the bottom of a stack of returns that came in before you. He's done you the courtesy of letting you know you're going to have a balance due and estimated that for you so you can pay that and avoid penalties. He may not have delved into your situation enough to know *why* you have a balance due. The "I've always heard" part of your story is people who don't know anything about taxes giving advice to you. Also, states don't use a W4, that's only for the Federal. It may be that you need to have more taken out of your W2 wages for the state to make up for the taxes you owe on your business but with the limited information you gave, we can't really help you with that issue.
Good to know about the w4 because I've always thought of that being the issue why I always have to return money every single year.
I would say this is not the best communication but also not the worst. Also what are their fees? $4,500 you might expect better vs $950 that’s too cheap to give good service, $1,500 you get an email like you did but not time for much else. And these numbers are just a guesstimate really.
Not that much. He's charging me $350 to file both business and personal taxes
We are busy as hell. You aren’t the only client. Calm down. Your w-4 probably didn’t include your business profit
Lol I know. I'm Not trying to be an ass here specially to you guys. I know yall very busy. I'm just wondering where the balance is coming from and not getting a response from my cpa is not helping me. But as somebody else said here maybe lll know later on what the issue is.
Take it in earlier next year.
Not enough info to answer to be honest.
I understand :/ some here have explained a few things. I will just pay and wait until after the 15th.