I asked for and received permission from C K Dexter Haven to post this question.
My father died in December and in the past he took care of all tax stuff. I have advised Mom to go to an accountant this year, just because there are so many unknowns: e.g Is the life insurance considered income?
Mom wants to go to H & R Block, but I want her to find a private CPA. However, I admit that I have no experience with H&R Block, so I don’t know if they are good or bad.
I posted a reply in your ATBM thread, but in case you don’t go back there, I’ll paste it in here:
Dex’s advice is excellent, and I’ll add this to it: You’d be MUCH better off with an accountant who has experience in estate tax returns. I assume your dad’s estate is being probated (or has been) and that there’s an attorney involved. I would consult with the attorney and get recommendations of two or three accountants qualified to do this kind of return. Interview them and pick the one you’re most comfortable with.
The IRS regs are mind-bogglingly complex, and your average street-corner tax-in-a-box may not be capable of handling it. The last thing your mom needs is an IRS mess on her hands because some seasonal hiree didn’t know the Internal Revenue Code well enough to do the return right.
Went to them one time and they totally screwed up our taxes. Three states ended up refunding us money. I tried to tell the agent that we didn’t have to pay 12 months of taxes in each of the three states that we worked in during the year, but he kept insisting and we were young and stupid and newly married. Find your mom a good cpa (probably not the easiest task). Don’t wait until April 14, go now!!! Or get a copy of Turbo-tax and help her out yourself.
If there’s any degree of complexity involved, I’d suggest going to a CPA. I have, way in the past, gone to H&R Block twice. The first time was for the first year of my college taxicab business, and they did well enough. I looked at what they’d done and decided I could do it myself after that. Their rendition of that year’s tax accounting did survive an IRS audit.
Again I went to an H&R Block office for the first year of a geophysical corporation I’d started. The office I went to didn’t know how to handle several things related to both corporate taxes as well as oil and gas specific questions. Unfortunately, they didn’t throw up their hands in surrender until they’d put me in a serious time bind.
I wound up using a CPA. The first one got me through a couple of years, but the second one really helped me out. The business has since been dismantled. My taxes filed last year involved the sale of my interest in a privately held corporation, the sale of assets and dissolution of another corporation and a loss on publicly traded stock, as well as salary and some revenue from those corporations. I probably could have suffered through doing it myself, but it was well worth it to me to have my CPA do it right for $150.
While McD’s can give you the same quarter-pounder all over the globe, my impression of H&R Block is that the quality of tax advice you might receive is all over the map.
I just have a problem with companies who don’t treat their customer equitably and have to be slapped by the gov’t to do so (especially companies who are handling my money)
Damn, that’s tough for your poor mom. Even so, she needs someone with estate experience or she could end up worse off than she is already. The fee will be well worth it.
Tell her a CPA might actually find a way for dad’s bills to be turned into a tax refund!
From my family’s experience, and those of my friends, H&R Block is really only for those who have simple. uncomplicated returns. Once in a great while, you’ll get one of their agents who really do know what they’re doing, but most of them don’t know how to deal with complicated situations.
Go with a CPA who specalizes in that area. They’ll know exactly what to do, and like EddyTeddyFreddy mentioned, they may know of little-known tax laws that can minimize the debts or actually turn them into an advantage. Worst case, they’ll be able to do it more efficently.
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But I once helped set up a political campaign office in a building that had been used as an H & Block office. Including use of the furniture that came with it.
We found people’s private financial info scattered all over the place. Copies of paychecks, bank statements, credit card bills. Copies of tax forms – even multiple versions with variations in the deductions claimed. And as this was a small town, many of these people were known to us.
The candidate was rather upset about this, and had us gather all these papers together (about 3 boxes worth) and had them taken off to be shredded at the courthouse. (Shredders weren’t very common back then.)
But I decided that any company this careless about people’s private financial info was not a company I ever wanted to deal with.
I’ve refinanced my home a few times, after the original bank mortgage. Once was through H&R Block’s mortgage company. Never again! A number of things left me less than impressed, but the crowning touch was when I called the lender’s lawyer’s office, the day before the closing, to double check that I had all the necessary items to bring to the closing, and was told it had been cancelled.
“CANCELLED???” Panic panic panic… Oh, well, that is, has to be rescheduled because the lawyer’s office hadn’t received all the paperwork from H&R Block. Hadn’t my loan officer notified me? :rolleyes:
I’m assuming your mom and dad filed a joint return in the past and therefore for 2003 tax year they will still be filing a joint return. You just have to put the name and date of death of your dad on the top of the first page of the 1040.
If all your dad left was bills there is no estate per se. If they own a house in the usual manner as married people do, joint tennancy, then it just passes to your mom and nothing is required tax-wise. When and if she sells the basis may or may not be an issue; depends on the gain, if over $250,000. Part of the basis is bumped up as of dec to the FMV as of that date however, so probably won’t be an issue. gain will be tax -free.
I would just look at last year’s return and do the same thing. Next year, your mom will have to file “Single” instead of Married Filing Joint.
I think TurboTax is a good idea to do a decedant’s return; simple and easy to understand.
I don’t agree you need a CPA unless there is something complicated, which you seem to indicate there isn’t. And, yes, H&R is a mixed bag. I think TurboTax is just as good unless someone is just in an utter state of confusion and can’t deal with even an uncomplicated return.
Also, Block is getting moreand more expensive. A friend in NY (where it’s expensive of course) just paid $175.00 for a federal and two part-year resident state returns, which with software are easy. So, I was surprised that someone above paid a CPA just $150.00.
The reason that someplace like H&R Block can be spotty is that they hire a bunch of extra part-timers for tax season, people who are often just moonlighting from their regular jobs. So, you might get stuck with someone who’s had Block’s training, but who spends his normal workdays managing a McDonald’s. If your taxes are fairly simple, they’ll do just fine, but if there’s anything unusual, they may not have the experience to deal with it correctly.
Then again, I’ve seen CPAs make mistakes on tax returns, too, so it always pays to go over the stuff very carefully, and ask questions about any part of it you don’t understand.
If Mom wins this one, and you end up at H&R, expalin your situation to the folks, and request their no-joke best person for this. My Dad is part owner of a franchise office of H&R, and mistakes do get made. But usually there is one bulldog in the office who can handle the more complicated stuff. I have specifically said I did not want any recent graduates from their tax preparer’s course when I had some complex issues one year, and they walked me back to the boss.
Aren’t they the ones with the “Get the maximun refund or it’s free!!” commercial? Well, how would you know if it were the maximum refund or not? You’d have to A) do the taxes yourself to see what (if anything) H&R missed, in which case what’s the point of going to them to begin with? Or B) take your taxes to some one else and ask them to find something H&R missed. Again, what’s the point?
Based on their advertising alone, I’d say go to some one else.
We’ve been going to the same guy at H&R for about 10 years, and for our simple, homeowner-no-business-no-write-offable-kids return, he’s great. Could I do better somewhere else? I dunno. We always pay, but only about $100.
Find your mom a good cpa (probably not the easiest task). Don’t wait until April 14, go now!!! Or get a copy of Turbo-tax and help her out yourself.