Tax Advisor Q &A
With Marcelino Dodge, EA
Cash Tracks Financial, Inc.
Tax Advisor Podcast Part 2 10/07/2021
This tax advisor information is a Part 2 form the podcast transcript from Tax Answers Advisor on October 7, 2021. The program presenter is Marcelino Dodge, Enrolled Agent, owner of Cash Tracks Financial, Inc. Cash Tracks Financial is a tax accountant in Lamar Colorado, providing tax services, financial advisory, retirement planning, business planning, and insurance company.
Podcast Transcript- Part 2
Tax Answers Advisor Introduction
Good, fabulous day and welcome to The Tax Answers Advisor, this is Marcelino Dodge, we are so happy to have you listening to this program today, whether it be live or On Demand at a later time. We’re just going to keep rocking and rolling here, as we’re on show number 44. And a little tidbit that I just am amazed that in this program is that it was one year ago today that I did the first program. My very first Tax Answers Advisor and it is so exciting to still be with you here a year later, with a worldwide audience throughout the United States, Canada, China, Sweden. It’s amazing who wants to listen about taxes, US income tax that just totally amazes me.
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Marcelino:
It’s interesting how many people will have like their friend, I will say, friend, do their tax return through some type of do it yourself software. And you sit here and think how secure is your information with your friend shared doing your tax return that says, Oh, I can do that. And I can do it for whatever I can do it for free? It’s like how’s that? How secure is it? So that’s my big, that’s my big thing, as well. Now another area, as we talked about, using the professional like an enrolled agent. Have you ever heard of Enrolled Agent before you came, came here Tiff?
Tiff:
I heard of the term but didn’t it just never really occurred to me what I was looking for it just I’ve heard the term and it to me it was just what you were supposed to be?
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Marcelino:
Yeah, wow. And I’ve discussed this on other podcasts of how an enrolled agent is, is really under what’s the word here under publicized or just not really recognized as a tax professional. Even though myself as an enrolled agent, I am licensed, which means I’m licensed directly by the IRS. I mean, I got a little bit difficult on my wall. And I do continuing education every year, they only require 24 hours, but guess what I do probably about 50 Just trying to keep up with everything that I do. So that’s what the EAA after my name means there’s other terms that one’s you. There’s other Wow professionals such as a CPA, which get all the publicity. But one thing most people don’t realize about CPAs they do a great job, but not all CPAs do taxes. Okay. Is that Is that something new to you then about not all CPAs do tax?
Tiff:
Yes, yes it is.
Enrolled Agent Certification
Marcelino:
Yeah. Because not because some Hey, some do taxes and they do a great job. But others focus in other areas like auditing or international stuff. They, they thought there’s CPAs even broader, much broader than an EA is so okay, but if you’re really when a person is really looking for someone to do their tax return, that’s why an enrolled agent like myself is someone to go to because we Our specialty is, is taxes. Okay, that’s what we go in and do. Now granted, I admit, I don’t know everything about every type of business or every type of tax situation, but I’ll tell you, I think a lot to maintain. And to be able to keep up there. We think about it, when I first become an enrolled agent, when I, in 2006, is when I got the finally got the certificate, but I had back then you had to go to Denver, and sit through two days of testing, written tests, multiple choice tests for tests over four areas of taxation at the time, they’ve updated. Now they’ve changed the reading, go to a testing center, and actually do over do only three tests. But still, it was a challenge to do. Sure.
There. So it’s, it’s a big thing to think about when you’re using a professional because you want someone who’s going to do it. Now, other areas that we’re going to talk, talk about, and something that as far as what we do here, which is I’m going to work on getting up to speed on is that we work also a lot more in the planning area, you’re around serves, that’s how a tax professional can really do service for their client, not just during the tax season, but you’re around, give them education. For the reasons I do this program is to provide taxpayer education.
Tax Preparation Experts Consulting
But the direct people that I do business with, I want to help them throughout the year, through consultations through tax planning. But we just need to just keep working together because the constant changing and constant efforts that people make, need to be done, but we need to just keep up with it. And that’s what we’re gonna work to. That’s what we work to do here.
So what if I’ve been doing all the talking here? A lot of the talking anyway. So what, what I of course, I know you were just looking for a job and everything and but what, what excites you about being here? What do you like about working? Are the, the opportunity to come here and work here with this in this office?
Tiff:
Yeah, the, I’d say one of my strong suits. And one of the things that I enjoy, I enjoy numbers, I like clean cut. Here’s the, you know, the end it’s, it’s you get these two numbers equal these two numbers, and it just everything is pretty clear cut. I like that part of it. Like having answers. I enjoy working with people. I’ve gotten used to that in previous jobs. I like just keeping in touch. And I like the fact that like you said, you keep in touch with your clients throughout the year, not just during the busy season. I like building that relationship with them and knowing what’s going on in their world as well.
Tax Advisor Services And Communication
Marcelino:
Yeah, yes, we’re trying. That’s what we’re endeavoring. That’s what we tried to do letters. Now one thing. We use letters and emails, of course, to contact people. But one of the interesting things that happens in the tax business is the fact that people will my clients do this, and it’s it is what it is, but some of them will open the letter, look at it, put it back in the envelope, and then bring it with their tax stuff. And it was meant for them just to for educational purposes. But hey, everybody’s, everybody’s different. Sure, so, okay, so, So Tiff let’s, let’s go into some of the questions that you, you have to kind of help you to, to understand things, then, of course, help those listening to this to understand a little bit, a little bit more about where we’re going and some of the things that that may come up along the way there. So let me open up the floor to you.
Tiff:
Okay, um, one thing that I’ve always heard mentioned, and just never looked into it, because I never thought it pertained to me, particularly, but was interested to know, what actually makes you head of household when you file for taxes. I’ve heard the term use but never, I guess really knew what it meant.
Taxes For Married Couples
Marcelino:
Yeah, that is a very important term in the tax thing, because everybody thinks, Well, I make the most money or whatever. And I’m head of household. And you know, what we’re comes up a lot is with married couples. Okay, married couples, especially if there’s one individual in the home who makes more money or the universe supports the home they think, Well, I’m Head of Household Well, in some senses, yes, you are. But when it comes to tax purposes, you are not. Okay. This is when it comes down to now because if you’re when a person when a couple is married, and this could be married either through common law, or through just regular marriage certificate kind of thing, because and the definition of common law, of course, varies from state to state, so really can’t do it.
Now. I’ll come back to this other point later, I’m just thinking of a sticking on the head of household bought here is that to be head of household. The first thing is you have to be unmarried or considered unmarried at the end of the tax year. Which basically means you have to be you have to be a single person. Okay, or considered to be a single person. And so I see the thought or the look in your eyes go on, okay, what’s considered single are considered unmarried, that’s like a whole that is a whole different can of worms there. But that’s where it gets a little complicated considered unmarried. Now, just to help you out with that one, this is a provision in the tax law where it’s kind of like an exception to the married rule. Okay, but there’s qualifications for it to be considered unmarried, you’re your spouse, the person you’re married to, has to be out of the house between July for from July 1, through the end of the year, the last six months and they cannot be in the same household they cannot if they cannot even stay in that household one night, okay.
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Married Or Unmarried IRS Tax Return
They you have to be you can be considered unmarried even though married now I do encounter these situations from time to time in divorce situations. Usually, if a divorce is coming up, or some cases abandonment, right, I’ve had some in the past where, for whatever reason, Mom has left home with the kids, but Dad went off who knows where and has been gone for the year. So and she has no contact with the more so, so that’s where unmarried considered unmarried must have. And that is the IRS is very specific about that. So that’s, in fact, this head of household is so important that when people come to this office, they have to fill out a Due Diligence Questionnaire professing that they are unmarried or considered unmarried. And there’s a form that us as tax professionals have to submit with the tax return. Saying that we’ve done due diligence on it.
Tiff:
On that fact . . .
Taxes For Head Of Household
Marcelino:
That particular deal, there’s a column for Head of Household on the, it’s an 8867. Paid prepares due diligence form basically is what it’s called. So yeah, so you have to be considered unmarried, but that’s only the first step at a household, okay, okay. To be head of household, you have to also have a dependent, okay, which would be a qualifying child, which of course could be son daughter, in your home living with you six months or more during the year, you must have that must have that individual. Now there could be there’s another, another area called qualifying relative. Now that could be that could actually be like a parent could be a niece and nephew and uncle, someone that’s related to you in some way that you provided support for 50% or more of the support for through the year, as well.
So you got to have that other individual to be able to consider head of household. It’s, it’s very, very specific on that as well. And of course, you got to be providing 50% or more of the support for your home, as well for whatever home that you’re providing there to be head of household. Now this does get a little tricky when you have two single people living together. Right? Yeah, that’s where can get a little, little tricky, is because they both can’t they could they and if children or if they each have their own children, too, and they’re living together that really gets a little tricky. Yeah. Yes. But the way that I do I always deal with that type of situation is okay, you have to single people, like each of them may have their own child from, from whatever circumstance. And then they come to file tax, and they try to boot file, file had houseless like, well, there’s only one household, there’s one address, so they both can’t be head of household according to tax rules.
So usually, the one that gets the head of household will be the one that has the higher income. Okay, that gets that. And so with that the other one could still claim their child or whatever, but they would be considered single, it does affect, of course the refund, but that’s where as coming in as tax professionals, and when anybody who does business with this office, when we talk to you, we will ask all of these questions.
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Cash Tracks Financial Inc.
117 W Beech St
Lamar, CO 81052
(719) 336-8739
https://cashtracksfinancial.com
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