Don’t have time to take a listen...here’s a quick summary of my latest episode of Small Business Conversations with PKJ, where we help those who have a strong passion, understand and gain the knowledge needed to help them through their entrepreneurial journey. With tax season upon us, it's a time that people either embrace or dread where people are scrambling to gather the receipts, locate past filings, looking for additional kids to claim, find a tax person and just get it over with. On one hand there are those that immediately contact PKJ Consulting on January second, ready to file their taxes and get that refund. On the other, I have those that contact us the day that taxes are due to help them file an extension. It's interesting that we all know we have to file taxes every single year, but no one truly understand how the process works.
This Small Business Conversations with PKJ features Sam Storr, who specializes in tax preparation. Sam Storr, born and raised in Detroit, Michigan holds a bachelor's degree from Eastern Michigan University in accounting and is also a member of Phi Beta Sigma Fraternity. He's the owner and tax accountant at Advocate Tax Services, a tax preparation and small business consulting firm in Michigan. He also has over five years as a tax professional with experience in audit, bookkeeping, quickbooks, fixed asset management and depreciation and internal gap and property tax. In addition, he's also a podcaster at the Ice Podcast, the podcast network where he is the co-host of the Iron Sharpens Iron podcasts.
Don’t Expect Your Tax Preparer to Bend the Rules
Sam advises, “I lost a couple of clients because I'm too much by the book. So yeah, they didn't want to work with me. They didn't want me to do their taxes for them because I'm not just going to give you what you want. I'm going to tell you what's correct. So what a lot of people don't realize is, you can't get ahead just by lying. I'm very by the book. It's a reason I have the record that I have. I've never been audited since I've been in business. So I want to keep that streak alive. And in case you do get audited, I got proof. So I'm not going to just do what you're telling me. I'm gonna do what's right.”
As a tax expert myself, I couldn’t agree more with Sam’s viewpoint. My mom worked for the IRS for 30 years...so I kind of know the ins and outs about how the IRS. works. There are people who want you to bend the rules a little bit and who want to alter something on their tax return. But a lot of times those tax people who do that- and I have a lot of clients have this happen- they go to someone who's willing to bend the rules and nine times out of ten they get that letter from the IRS that says, “We need more information to verify this,” and then they reach out to that person that they found on the street corner or who's handing out flyers or knew somebody who knew somebody and that person is nowhere to be found to help them fix it because they aren't an official tax person.
Be Honest with Your Tax Preparer
“Be open and honest with whoever's preparing your taxes. I always tell people, ‘If the tax preparer is not asking you questions, then it’s a problem. If you're not asking your taxpayer questions, that's also a problem.’ You need to know what you're signing because you're signing a legal document. You should want to know what's on it. So, no secrets.”
Have All Your Documents Ready
Having all of your information ready to go to when you meet up with a tax person helps it get done quickly and efficiently. Sam adds, “Make sure anything that you purchased has a receipt for it. Make sure that your mileage is logged. Make sure you have receipts for all the gas that you have spent. That's very important because I've noticed that they're really cracking down on that.We need documentation. The more you got the better. No guesswork.”
I’m asked all the time about keeping receipts when using a credit card vs. cash. I asked Sam his take on it and here was Sam’s opinion, “I always tell clients anything that you use with a business, please swipe your credit card because then I can just take your banks statements and just analyze that and download it to excel it, spit it back out and I can get a detailed account of what you spent. So that's the easiest. That's the best thing I can tell anybody. Use credit cards as long as you're making enough revenue to cover that. That's the easiest paper trail you can have. A lot of people are cash based. When you’re cash based you must keep receipts. When you use a card you can get away with not having a receipt, but when you’re using cash, you have got to have the receipt and mark it down.”
Listen to the full podcast to hear more about Sam’s entrepreneurial journey and if you’d like to connect with Sam, you can do so by contacting him directly via email at firstname.lastname@example.org or catch him on Facebook @advocastetaxservices.