On Episode 3 of the More You NoCo podcast, brought to you by the Weinland Team with RE/MAX Alliance, we spoke with Lance Sample with Sample CPAs, a local Northern Colorado small business, about taxes and his tricks of the trade. There are always questions surrounding taxes. When should I hire a professional? How can I plan for my taxes when I don’t know what the rules are going to be for next year? And how should I organize my paperwork and information to make my taxes easier on myself or on the professional that I choose to hire? Lance answers all this and more!
Lance Sample was born and raised in Fort Collins, Colorado. He attended Colorado State University. He is the father of two boys, 19 years old and 5 years old, talk about a handful! His favorite bars and restaurants are ever changing here in Fort Collins and Northern Colorado since he has been here his whole life so many of them have closed and no longer exist. Currently, his family likes Nordy’s BBQ. However, he can no longer go there for lunch anymore because afterwards he always has to take a nap due the huge quantity of food they give you. Lance, we completely understand!
While he would love to head to warmer climates when he retires, he expects that that won’t be for another 20 years or so which is plenty of time to make Lance Sample your main tax professional! Sample CPAs is his Certified Public Accountant (CPA) company, currently just himself, but with plans to expand given the opportunity. With 20 years of experience, he knows his way in the tax world and Lance knows that precision is key when it comes to finances. Lance loves his job (mostly except for the two weeks before April 15th) and says, “I have that brain that works that way… and it is a very small percentage of the population that wants to do what I do.” We are definitely glad that you do have a number oriented brain Lance! Saves all of us from the headaches of dealing with the IRS. Lance definitely has job security when it comes to the ever changing tax rules put forth by the IRS.
First up is a little background on the IRS. The Internal Revenue Service is the regulatory body when it comes to taxes. The most recent challenges with the IRS have been mostly due to communication issues due to our current global situation. COVID-19 and staffing issues have made it harder to get questions answered or get problems fixed through the IRS. Recent years have meant that dealing with notices that have been sent out by IRS may take months to get resolved just based on the fact that you can get through to them on the phone. This isn’t just a problem for everyday citizens, but for CPAs as well. Lance says “you may leave a message or get a message after waiting on hold that says due to high call volume we are unable to answer your call, call back later. Click… So that’s all challenging and then if you try to respond via mail, they’re about 12 months behind, currently, in opening mail.” This is making it a struggle to resolve issues, which at this point, might now take months to a year(s) to make any progress. In these cases, it is important to have patience and a tax professional on your side. Situations like this can make for resentment and lead to ongoing negative feelings towards the IRS.
Tax planning is always a pain, especially if you don’t have a traditional situation. If you are a small business owner, this can be even more complicated. Congress is always passing new bills which change the tax filing rules and to a lot of us this can feel like trying to hit a moving target. Lance stated that, “The big thing obviously going into the end of last year, in 2021, was this Build Back Better bill that they had proposed… and a lot of what made it tricky was there were some thoughts that they could make some of these rules retroactive… So again when we are making retroactive tax changes it makes it virtually impossible to do tax planning.” 1031 exchanges were one of the items that CPAs were speculating were going to get changed in this bill so giving advice to their clients on how to proceed was impossible. Lance says that he has had clients ask him in 1031 exchanges were the right choice for them, but at the time he couldn’t even answer because he didn’t know if they were going to be allowed with this new bill. This was frustrating because it made him unable to do his job for his clients. It is his job to help his clients make the most of the tax rules and to help them project into the future what tax laws might be and then make smart decisions off of that. None of us have a crystal ball and can see what the future will look like, just like in real estate when people ask us what the market will do, but as professionals we have an obligation to do the best that we can for our clients. Having a professional on your side can make you more insightful, but tax planning is challenging for everyone, even CPAs. Lance is able to make better, more educated, guesses than the general public because he is constantly following these bills as they go through Congress.
This really depends on whether this is a business or an individual. With an individual, you are at the mercy of whoever is giving you your paperwork for your taxes. Think, W2s from your employer or a 1099 for your investment advisory or a K1 if you are involved in a business. To help these individuals, Lance sends out tax organizers so that they know which documents they should be looking for and to keep them all in one location. Having a file folder where you put all of these documents helps you make sure that you have everything when you sit down to do your taxes or when it is time to give these to your tax professional. Everyone has experienced the nightmare of being ready to go, starting your taxes, only to realize that you are missing one piece of paper that you saw a week ago… somewhere. Put all these documents in a single folder and it will save you tons of headaches.
For businesses, if you are using Quickbooks, Peachtree (Sage 50 Accounting), or some sort of accounting software, just make sure to reconcile all your accounts with your bank and then you can schedule a time to meet with a CPA, like Lance Sample. Again organization is key here as well. Businesses have a lot of moving parts so make sure to start on this early. Your CPA will thank you and your stress levels will thank you!
Starting with a short meeting or phone call will your new potential tax professional can make sure that you mesh. You want someone you can trust when they are handling your finances, especially your taxes. Being able to ask questions, tell them about your situations that you are in financially, and feeling like you can trust them and talk to them are all key things to look for during this initial meeting. Chances are if you are hiring a CPA, you will be meeting with them multiple times per year, not just during tax season so make sure to choose the right person for you.
Second, make sure you are getting what you pay for. Lance suggests asking the following questions, “Asking what the rate is, what to expect, how much is this going to cost, and feel like you are getting value. And some people, quite frankly, don’t feel like there is a lot of value in ‘here’s my documents’, you prepare it, and you give them a return and they think that it is just a return. Are you getting more than just the compliance piece? Are you getting a little more consulting? Are you getting some ideas on what to do and how to structure things? Are you getting, you know, longer term planning?” All of these things change depending on your current stage of life. If you are looking at retirement you may be in a very different situation than someone who is looking to start their own small business. A good CPA will be able to help you plan for whatever your life stage may be and be able to help transition from one stage to another, if planning is what you are looking for.
This person should be the person you can trust to stay up to date on all of these new rules and laws going into place so make sure that they seem like they are fully in the industry. A great CPA will help you take advantage of the tax laws so that you are getting every dollar back that you deserve. And, usually, by taking advantage of all of the laws, and with proper advice and advanced planning, means that you are saving more than you are typically paying your CPA. Lance says that many people may have missed, in the last few years, under the Trump tax cuts that changed a lot of things pretty dramatically. Lance has seen when people aren’t taking advantage of section 1-99 A, qualified business income deduction. This is where, in very broad terms, you are getting a 20% deduction in business income which was all very new and unless you were in the industry, or paying attention to this new bill, you may have missed and you are leaving money on the table. If your tax situation is complicated, it may be time to hire someone who is in the industry day-in and day-out.
While the compliance piece of hiring a CPA is important, your CPA can be much more than that. Helping you plan for your financial goals can be a huge part of the process, depending on the CPA that you choose. Lance states that he makes sure to go through the cost/ benefit analysis with his clients when it comes to his fees, but if you just have a standard W2 and you aren’t looking for the planning piece that Lance offers, then TurboTax or one of the online programs, H&R Block, or doing it yourself is probably a better option for you. Complex situations and people looking for planning are Lance Samples ideal clients. Not every situation needs a CPA and knowing that can help you select the right CPA.
“My guess is never” Lance says with assurity, but then jokingly adds, “But who knows, I hope that it is sooner than later!” If the last two years are any indication of what the future of taxes will hold, then Lance is all ready to be replaced by artificial intelligence.
Currently, Lance doesn’t have many clients in the Cryptocurrency world. “Thankfully” he added. But he is ready for when he does. Crypto is being traded just like any other investment type right now and the platform through which the trading is being made are usually providing paperwork that his clients, and ultimately himself, need in order to file their tax returns properly. He admits that this definitely is not in his wheelhouse of expertise because it is so new and currently his clients aren’t investing in Crypto. Doing cost/benefit analysis on Crypto is up in the air right now as the rates continue to ping-pong all over the board. He states that he would have heart palpitations if he was invested in Crypto and was watching it on a daily basis, but if that is your thing, then go for it!
Lance says that dealing with the IRS, especially recently, has lead to some crazy stories, but one in particular comes to mind. He was filing a tax return last year that got rejected because the IRS stated that the name didn’t match the EIN. So then Lance filed a paper return and the IRS sent a notice that they assigned the business a new EIN. Confused since they had been using the same EIN number for years, Lance reached out to see why they had assigned a new number. “I called the IRS and said… here’s the EIN that we have been using and I have a power of attorney. I am curious what’s going on with this, why they would have assigned a new EIN. They said, ‘What’s the new EIN?’ I told them. They said, ‘Do you have a power of attorney for the new EIN?’ I said, ‘No, because it didn’t exist.’ … And then they wouldn’t talk to me.” This made Lance feel like him and the IRS are on opposing teams and at times he feels like it is tricky than it needs to be at times. We, here at the Weinland Team, can’t imagine trying to go through that without a CPA!
Overall, we discussed; what the IRS is and why some people complain about them, how to plan for taxes when the rules are constantly changing, tips for getting your paperwork together for tax season, questions that you should ask a CPA before hiring them, when hiring a CPA is a good idea, when will AI replace CPAs, and are Cryptocurrencies affecting Lance’s business. We also go to hear about Lance’s craziest tax story. We hope that you found this information valuable and you will consider Lance Sample with Sample CPAs, if you are looking for a CPA in Northern Colorado. If you loved learning about taxes and CPAs, head over to the More You NoCo podcast where you’ll find even more on the topic! Click here for a direct link or check the bottom of this article for links to all the places that you get your podcasts.
The Weinland Team is glad to provide this information to you through our More You NoCo podcast which allows us to bring local Northern Colorado businesses and information to you. If you are looking for local NoCo small business professionals, then visit NathansDirectory.com for a list of amazing professionals that we highly recommend. As always, if you are looking for real estate professionals in Northern Colorado, then give the Weinland Team with RE/MAX Alliance a call. We are ever to busy to help!