Wrapping up 2011

With the possible exception of a religiously-oriented post about Christmas Day, this will be my final post of 2011. As I have often done in the past, I thank most of my commenters (spammers excluded), every one who read my posts and a special thanks to those who cited posts in their blogs or carnivals or who link to this blog in their blogroll.

Hints for the Competency Exam by the IRS

IRS Candidate Information Bulletin

Accounting Today Headline

The IRS recently published a 12 page "Candidate Information Bulletin" (link above) to assist tax preparers planning to take the Taxpayer Competency Exam to become a Registered Tax Preparer. Included in the bulletin are study resources, pre-test study materials, an overview of the test and information on the testing fee and test center locations and procedures. A notable item from the Bulletin is that the exam is blacked out (cannot be taken) during the April 1-April 15 period. I also recommend studying the Master Tax Guide (available from CCH and RIA) either to complement or as a substitute for their recommended study materials which are a series of IRS publications.

This is a continuation of the tax preparer registration process. Whether or not you agree with the concept of taxpayer registration (and I do not as chronicled in earlier posts), the IRS is to be commended for putting together this helpful guide.

Avoiding an Internet Cloak of Invisibilty

While a "cloak of invisibility" may have appeal for a comic book superhero or a desperate boy in any number of teen sex romps, being invisible on the Internet is NOT a good place to be for a CPA firm. Nevertheless, Online Marketing Group found that nearly 40% of small CPA firms use no keywords suitable for Internet searches and over 80% received a poor or fair rating for their keyword strategy (or lack thereof). Larger CPA firms barely do better; over 40% have no keyword and five out of eight do fair at best in keyword use. Larger firms are better at social media (Facebook, Twitter, etc.) profiling with almost three of four referencing a social media site on their webpage versus one out of SIX for small firms. Mike Murray of Online Marketing Coach asserts that many CPA firms are not paying enough attention to social media and search engines and that both can be powerful generators of potential new business.

The marketers have a legitimate point here: CPAs cannot waste opportunities to generate potential business. Two counterpoints: [1] in the busy world of the CPA, any number of client issues probably seem more urgent that updating the website to setup a Facebook or Twitter page or digging through their website to generate keywords; [2] social media business generation, while clearly having significant potential, is somewhat of a "scattershot" proposition at the moment and CPAs may prefer a more focused approach to client development. One suggestion--during the lighter months of activity (certainly NOT the next four months for most CPA firms), have a local consultant (perhaps even a grad student in marketing for smaller CPA firms) look through your website and suggest ways to make your website more visible to those with real client potential.

Easy to Miss Tax Deductions

Note: Thanks to Kay Bell for running the TPIN Competency Article in "Merry Taxmas" in the December Carnival of Taxes at Don't Mess with Taxes this past Monday.


Kiplinger recently gave a list of ten commonly missed tax deductions, which should actually be eight because one (child care) is a credit (similar to but not a deduction) and one is an increase in basis (only deductible when an item is sold). The eight mentioned include state sales taxes (keep a special eye out here if you made a large consumer purchase like a car or boat. However, also remember that you get EITHER sales or income tax and that the annual renewal may not have passed by Congress yet); out-of-pocket charitable (remember charitable mileage and make sure you have receipts (cancelled checks no longer work in an audit) if claiming over $250 for a given charity); interest on student loans paid by parents; job-hunting costs (primarily by first-time job hunters--the 2% of AGI limit will make it hard for present job holders to qualify); cost of moving to a new job (remember the 50 mile rule and the 39 weeks in first year rule--this ususally means a move from one city to another. It IS possible if you lost a job through no fault of your own and moved twice in the same year to take two rounds of this deduction--I did so in 1978); reservist costs of training (similar to business travel if you travel over 100 miles and are away from home at least overnight); deductions of Medicare premiums paid (primarily available to the self-employed; avoids the dreaded 7.5% rule) and estate tax paid related to income earned by decedant (a small giveback from the government for adding insult to injury by double taxing (income and estate) money earned by someone that you probably were grieving).

Kiplinger also provides a slide show of other potential tax deductions. Throughout this month, bloggers listed in the blogroll at right will be mentioning other tax deductions to remember; it may be well worth your time to check these blogs throughout the month to make sure that you do not miss any important deductions.