Season 2, Episode 2: How Tax Season Will Work
Jason is still in business as an accountant. We talk about how that will work.
Hello and welcome to another episode of As the Dinosons Turn, and we're getting into the latter part of January as we record this and this airs. Probably going to air the same day that we're recording it. So towards the end of January, what do we want to talk about this time?
SPEAKER_01Well, you know, we started to get some questions about tax season and how things are going to be running, what we're going to be doing, how we'll be working. So I feel like in our conversations, this is the thing for us to focus on because believe it or not, we've really already got at least maybe 12 to 15 people have already sent their stuff in. So we're going to talk a little bit about what um tax season looks like and what we're doing, not just um for our existing clients, but what we're doing with new clients both um in the US and in Portugal.
SPEAKER_00So yeah, so this is our primary business, I guess, is is uh the tax work, and that continues even though we're here in Portugal, and my company is still based in the US, in Iowa. And I always say that, you know, the my employer has a generous remote work policy. So the uh two employees of the company are working remotely. And so, you know, it's it's in a lot of ways it's business as usual because most people were already using technology anyway, the secure portals to send files and stuff. So it's really while it seems like it's a drastic change, it really isn't. There's only about maybe twelve people that were not using the secure website to begin with. There are maybe a few more than that who didn't use it just because they didn't have to use it. But now that they do have to use it, they've switched. So um I've I've decided probably not to go back to Iowa during tax season like we had originally talked about. We'd originally talked about I was going to go back and meet with people who didn't want to use the secure website, but then I'm like, well, why why take on that cost because whatever it cost me to travel would be about what I would get in fees from the the people that I was meeting with who didn't want to use the website. So um, you know, having those conversations with people and just letting them know that, you know, that's not gonna work anymore. And I think that's part of just being in business in general, regardless of what you do or where you do it.
SPEAKER_01Well, and and I think that that also is one of those things where when we think about secure website and we've already gotten a couple of inquiries and new clients, so how this works, I think we can take you through that step-by-step process. You know, we receive an email or a phone call. Yes, we still have a US phone number, right? We have our Google Voice number, um, and we receive an inquiry and we respond back. Um, and then our initial intake meeting, or usually our meetings, you know, just like they were during the pandemic, we've learned, happened through Zoom. So they happened online, right? So we can have those conversations. Um we um have a a checklist of kind of things to remember or things for you to consider as you go through it. Um, and that way you know what paperwork to collect, right? And now we're starting that collection of paperwork that's that's happening in the month of January, right? So, what are some of the things that people would be gathering for their documentation as we get going into you know the end of January? What are things that they would be expecting to receive or collect?
SPEAKER_00Well, for your most average people, it's your W-2 from your job and and then 1099s that you might have. So if you're retired, you have your 1099 R forms for your retirement income or 1099 interest forms for savings accounts. If you have investments, there's usually a pretty big packet of information that comes from wherever your investments are that has multiple types of 1099s in it. And nowadays most of those you can get as PDFs instead of the printouts, but those are a lot of times 50 plus pages long, even if you don't have very many investments. So those would be the primary things.
SPEAKER_01And the deadline to send those out is January 31st, correct?
SPEAKER_00Correct. For W-2s and like 1099s for contract labor, it's later later than that for investment forms. I think it's February 15th for those. And a lot of times people don't actually receive their investment paperwork till sometimes, sometimes the middle of March, even.
SPEAKER_01Right. So as you're collecting this information, know that I mean, we know that it's a process and that you'll be getting some things little by little. You can upload things as you receive them. So just like if you had a file by the front door or, you know, by your mail and you would put it into a file folder, you can actually collect that information and then put it in the portal. Um, it's actually pretty easy to do because you don't have to have access to a computer, right? You just need a smartphone.
SPEAKER_00Correct. You would need a computer to do the initial sign up because that's it's easier to do on like a website on a computer. But once you're signed up with a login and a um username and password, you there's an app that you download, put your username in and give it permission to use your camera, and you can snap pictures of your documents and they upload securely to the website. And in fact, they upload as PDFs actually, and not like pictures or JPEGs. It's actually they get converted to PDFs as part of the process.
SPEAKER_01It's a pretty slick system. So then we actually have access to that in the portal. You would as well if you went onto a computer and went into the portal there, you'd actually have access to that information. So it's just a great storage facility. So as you receive those things, then you can go ahead and upload that information. Yep. Right. And if you, you know, remember, like if you've got mortgage interest um, or maybe you've got student loan interest, those are available for you to go in to your bank, um, your bank's webpage or your lender's webpage, and you can actually download those forms um, you know, by the end of this month. So most of them will they'll send you a notification um to let you know that they're ready, but know that those really should be done or can be done usually now, um, even though it's still the middle of January and the 31st is not until next week. So just kind of keep those things in mind.
SPEAKER_00Yep.
SPEAKER_01So they upload forms and then tell them what happens, what happens behind the scenes.
SPEAKER_00So then once the forms are uploaded, we start doing the data entry on your tax return. And I mean, I guess that's really the next step is your return gets prepared. Um you know, if you send your things in kind of piecemeal one at a time, things get done. You know, the data entry happens whenever you upload stuff. Once everything's uploaded, um then there's final review, you do e-signature. So the the system has a secure way of gathering your signatures, you get to review your tax return. Um we can always do Zoom meetings or Teams meetings or whatever your preferred way is, even just phone calls, um to go through things. And uh Yeah, I mean that's it.
SPEAKER_01Right. So I'll actually be helping with some of the data entry. Um if you send an email to admin at Dinason Tax or you know, you send things to Jason, I actually get that information as well. And so we go through and make sure we have things. So I'll be helping with some data entry. Remember, I am studying um tax law and becoming an enrolled agent, but Jason is doing all of the complex items and the reviews, and so we'll make sure that you get everything that you need. Likely we'll have some questions, and so those questions will happen either in a meeting, um, you know, especially if it's a complex situation, probably meeting, phone call. Um, but if it's just a straightforward yes, no, is this correct type of information? Are we waiting at anything else? Um, that can be done by email. Um, payment, it's the same as before. Venmo, PayPal, we can take it direct debit from accounts, just like if you have to pay the IRS and all of those things, right? And you do deposits for refunds.
SPEAKER_00The secure website can also take payments as well. So we can post invoices there and you can pay it through that as well.
SPEAKER_01Exactly. So, and then the good thing about that is you would actually then have um a document um in your portal that you can use then as a deduction next year when you're doing your filing your taxes. So for the next year, you've got that information there already. So, you know, you get to deduct some of those fees. I'm learning these things.
SPEAKER_00Right.
SPEAKER_01Right. But I think that the idea is that that way we actually can help you and assist you with your tax information and all of those pieces. Um, you know, a lot of people have asked, what does your workday look like? I am definitely a morning work person, so drop the kids off and then I'm working in the mornings here, which is um six hours later than it is central time. Um so and Jason is definitely an afternoon worker um and works into well into evening. We had meetings with clients at 10 p.m. our time last night. So if you need to have a meeting at the end of the day and it's like 5, 6 p.m. um, you know, central time, well, we make it work, right? I mean, it's it's a usual part of routine here. Um, yeah, I don't know. We don't we don't go to bed till 11:30 or 12 anyway.
SPEAKER_00Right. Everything's a few hours later in in Portugal and Spain, it's like you don't eat dinner till eight or nine o'clock at night.
SPEAKER_01So life is is a very different pace. So um, but we also are assisting some of the expats um in Braga with their US tax returns. And it's really interesting to see the differences, right? Like even thinking about our own return. Since we live in Portugal, we have to file a Portuguese tax return first. And we have a Portuguese CPA to do that work. That is not something that one we are qualified to do or would ever do. But we have a CPA firm that we we contract with and that we work with and that we can recommend to people, or you know, if you know someone else, you absolutely can do it that way. And then it's the same type of process, except that if you're in Portugal, we can always meet you for a coffee. That's true. Um, you know, all of those things, but you're gonna be getting all of your information from the US and all of those places anyway, online um or by mail. And so we're gonna use the same process. Put it in the app, we'll get you set up, you know, prepare your return. We might have coffee to have a conversation with you, you know, or wine or whatever works depending on your time. Like we've got it so that, you know, if if we need to be in meetings in in Braga and somebody else needs to get kids, we can make all of that work, not a problem. So um just know that expat returns, we really won't start filing those until probably April or May.
SPEAKER_00Probably. A lot of them have to go on extension just because you really need the Portuguese tax return done first. Even if you end up you know, there's some of the tax systems in Portugal where you might not actually owe anything to Portugal, but it's still really that needs done first.
SPEAKER_01Well, now then correct me if I'm wrong, because this is part of the information I'm learning. If you are an expat or you live in another country, you automatically get a two-month extension for filing your US tax return.
SPEAKER_00Correct.
SPEAKER_01So um your deadline is not April, it is then June, though you might need an extension beyond that. And that's an easy form that we can help you with to get that taken care of. So that gives you time to get your Portuguese tax return done to get all of the information that you need from US and all of those pieces and get those filed. Um, we actually've had um, you know, a pretty in-depth review process. Jason does the reviews for U.S. returns for those that have international filings because we have clients who live in other parts of the world as well. Um, we actually have another firm that might do some audits of some of the more complex returns and those things so that we make sure we do them right because those penalties are pretty steep, right?
SPEAKER_00They are $10,000 minimum if you don't fill out the right forms for your foreign activities. So Right.
SPEAKER_01And so, you know, this is a pretty common thing for smaller firms to work with other firms as well to make sure that you've got additional sets of eyes on them. Um, so that's one of the things that's built into that service and built into fee structure. So kind of keep that in mind, right? And I'm learning more about this as I go as well. Yeah. And how complex the return is is really dependent on the number of deductions or things you might have, the number of forms you have to fill out, all of those things, right? You might have different states for state income taxes. Um, and then unless you're lucky enough to live in a state that doesn't have state income tax, there we actually have a few of those um expatriate friends that changed their country of residence. Uh I mean their counter country, their state of residence before they actually came to um live in another country. Yep. So kind of keep those things in mind. Um, we've actually considered that as well, you know, like okay, so there are there are states you can change your state of residence for income tax purposes if you are not living in the US, which I find that very interesting. I'm learning all kinds of new things. Um, should you have absolutely any questions, email is a great way to go. We also can use Google Voice. We get text messages there as well. WhatsApp is a completely easy way to we use that everywhere here, and so that's an easy way to get a hold of us. Um, can you think of other ways they might want to think about or other things people should be thinking about as they enter tax season?
SPEAKER_00No, just you know, it's I think it's more complicated than you might think, even if you're living in the US and you think you just have your job and not much else going on. And you know, there was a time when I thought I was gonna get on board with what a lot of firms are doing, which is charging, you know, $2,000 to do a tax return and you know, get into advisory work. We do some advisory work where the fees are higher, but there's also a demand for average people who need their tax return prepared at an affordable price. And I think that it's kind of a pivot back to you know, helping the people who need the more complex stuff, but also being, especially with you helping now, being able to help average people who don't need to pay fifteen hundred dollars to have their tax return done. You know, we can provide a service for people who just need a tax return filed.
SPEAKER_01Well, I know that, you know, um where our goal is to get them out the door as quickly as possible. We also are cognizant of the fact that if you have something that's more complex, we're gonna have to keep that in mind and it will take longer. Um, but we will reach a point in April that we'll likely just have to put you on extension based on other things that are going on. So don't be surprised. It's pretty standard practice actually in accounting firms to just start putting people automatically on extension, even in early March, sometimes, depending on how complicated things are. Or um, you know, some of the tax guidance is yet to be released and the forms have yet to be released. And so it depends on when all of that is released as well. Usually, I mean, we can't start filing supposedly until the 31st of January, but sometimes that's later.
SPEAKER_00Right. Even that is just really super simple returns that can be filed starting in late January.
SPEAKER_01Right. So we've got we've got time. Never feel like you've got the oh, I'm gonna be done earlier. You know, quite frankly, sometimes it's just it just the reality is that sometimes it's later and that's okay.
SPEAKER_00Well, yeah, also have to be careful, you know, sometimes people think I've got everything, and then suddenly another document comes. And if your return has already been filed, then you know it's not the end of the world, but there is more that has to be done to amend and and get that extra form on. So sometimes it's better to hold off just a little bit and make sure that you really do have all of your documents in and that there's not something out there. You'd be surprised how many people forget about the little like random uh you know e-trade account or um there's a place called Acorns that people will sometimes just stash like fifty dollars in an investment account or something, and then they forget about it and suddenly they get a ten ninety-nine from that place on like March 5th or something. So yeah, just make sure you've accounted for all of the different places like that. And you know, obviously you know who your employers are, hopefully, but you know, all the places where you might have fifty dollars invested at like even in like crypto or something on a crypto exchange or something, you know, they they might be sending you a reporting form. So make sure you're catching all of those things.
SPEAKER_01And then of course, if something just pops up and you're like, oh no, like know that we actually help you take care of that as well. That, you know, I think that um one of the most important things is not only to, you know, make sure that your return is correct, but also to help you track some of that, but then also to have the conversation here's where you are this year. If you want next year to be the same or different in any way, here are things you can keep in mind and actions to take. Um, and so that is also part of that process. So yeah, I think I'm excited for my first tax season, which I never in a million years thought I would say. I used to dread tax season, but now I'm looking forward to it.
SPEAKER_00It seems like it's manageable, more manageable than in the past.
SPEAKER_01Well, we'll see how it all goes. We'll see. And now, because we're finishing up, you can hear the dog barking because he's like, now it's my time. That's exactly right. Um, so you know, we will see you soon. And next time we're gonna talk a little bit more about um, what were we gonna talk about next time?
SPEAKER_00Were we talking about we talked about it yesterday and we we said tax season and maybe revisit burnout, and there was something else that I can't remember either.
SPEAKER_01Oh, good lord. Well, apparently we'll come at like we'll come back to you again next time back to a little bit of uh more of the norm, but we wanted to give you a heads up of how things work and what it looks like. Um, and it's as easy as using an app and taking pictures with your phone. And believe it or not, yes, it is secured and password protected and all of these. I mean, I think that's like double authentication, sometimes triple, depending on the system. It's a little crazy. So, all right, well, happy new year, happy beginning of tax season. Gather those forms.
SPEAKER_00All right. Well, join us again next time on another episode of Ans the Dinoson's turn.