Latest / Marci talks money (and life) / Accounting, Taxes, and Financial Organization with Ron Silberstein
Transcript
- Marci Grossman (00:16) Hello, I am MoneyMarci, welcome. I'm thrilled to welcome today's guest, Ron Silberstein. Ron is a Certified Public Accountant as well as a Certified Franchise Executive and is co-founder, president and CFO of Bud's Place, a franchiser of social cannabis consumption lounges, in addition to having his own CPA firm that specializes in franchise accounting, tax, and consulting, including providing outsourced CFO controllership services. Ron has prepared and reviewed thousands of income tax returns during his career and has appeared on numerous podcasts related to income taxes and accounting and franchising. He has been named a top 100 global franchise influencer. He has worked with Intuit as a tax support specialist. In addition to his franchising business and his CPA firm, he currently works with two tax controversy law firms, preparing and reviewing tax returns for their clients. Welcome Ron. I love having another CPA as my guest. And I just want to say this to the listening audience, even though we are two CPAs talking and we're going to be talking about tax returns and other things, we are not giving advice. We're giving information, we're giving education. You need to talk to someone who understands your situation. We're not sitting there looking at notes to research. We can't give numbers, we can't give any of the specifics of anything. So please take our information and use it as a starting point for your own information. Okay, Ron, here we are. Ron Silberstein (01:59) Thanks Marci, thanks for the introduction. Happy to be here. Marci Grossman (02:03) Well, I am thrilled to have you. What made you become a CPA? Ron Silberstein (02:08) Great question. So a long time ago, my dad's best friend was a CPA. And I liked the guy, he had a great personality, he had a very nice lifestyle. And I kind of decided right then that I wanted to be a CPA. Marci Grossman (02:29) It's a good career. Whether you're in public practice or private practice, businesses need accountants, they need CPAs, it's a lot of opportunities out there. Ron Silberstein (02:41) Yeah, you know, a lot of people think it's boring, but I don't see it that way. Everybody needs help. Every business is different. A lot of the issues they may face are the same, but between, the different businesses, the different people, the different personalities, it all stays interesting and I love helping people. So that was a big part of it. Marci Grossman (03:05) That's a huge part of it because it is, working with the information, it's working with the people or working in support of the people so that they can make their best choices and live their best lives. And we're kind of like bartenders and hairdressers. You can't hide your stuff from your CPA. We can't help you if we don't know what's going on. Ron Silberstein (03:18) Absolutely. That's right, that's when they get in trouble even more so if they're not telling us everything or giving us all the information. Marci Grossman (03:35) We're recording in January. I'm hoping to post this very quickly as well. It's about organizing for tax returns, whether you're going to prepare them for yourself or give them to a tax preparer, whether it's a new tax preparer to you, or someone you've been seeing for years or decades. How you organize your information can make the job a whole lot easier for people. You have a unique experience because not only have you been tax preparer and reviewer, you've also worked for Intuit, which means you've helped people prepare their own taxes. So I'd love to hear a lot more about that. Ron Silberstein (04:11) Yeah, I worked with Intuit for one tax season right when they first introduced, their TurboTax, live support, program. And, it was quite a learning experience because, for one, as a CPA, you kind of get in the habit of thinking that, people, you know, doctors, for example, or wealthier people, all use a CPA and take advantage of the value that a CPA can provide based on knowledge of all the tax rules, because there's a lot of stuff out there. And we don't know everything as CPAs, but for the most part, we know how to find the answers. And it was very interesting to me the kind of people that I learned do their own tax return because there were a lot of wealthy people, a lot of people with different kinds of investments or with businesses that were buying TurboTax or going online and using Intuit software and doing their own tax returns. So I got all kinds of questions from their customers on tax issues. I learned a lot. They had a lot of customers that were in the military and moving around and I hadn't really prepared tax returns for people in the military. So you start learning all the different federal and state tax rules that apply to people in the military who may be moving around, who may have different things that aren't taxed. And it was just... a good learning experience for me, both on seeing that there are a lot of people out there that prepare their own tax returns and then, learning the different things, the different rules that affect other types of people other than the clients that I had grown up providing services to. So, it was great experience. It was very exhausting with the way they ran their program and you know being on the phone with a headset and calls getting routed to me from all over the world basically and you finish helping one person, write up a quick report and then there's another call coming in you know from another person so it was great experience I learned a lot it was helpful. Marci Grossman (06:41) I hadn't even thought about that aspect of it, the state returns. I've had people through the years, there are a few states that I have more experience with, a bunch of states I have no experience with, and someone will say, would you do my return? I am from so-and-so, but my friend recommended you. And I'm like, you know what? I haven't touched that state. I really don't want to take responsibility for the quality of what's going on and especially if they also have a schedule C, a small business that could create a whole other bunch of state requirements that come with that and at intuit for the work you were doing there, they'd say, okay, well, now we're preparing California, now we're preparing Illinois, now we're preparing whichever random state and then add to that city taxes which... usually aren't as complex as state, but can have their own areas of issue. I'm thinking of Ohio, which each, I think it's county or corpus, whatever they call has a totally different set of rules, and the smaller the area you're talking about, the more likely you are to have people who cross borders and live in one and work in another. And if they held multiple jobs, you could be trying to help them with multiple city returns. Ron Silberstein (08:04) Right. Yeah. And that was part of what made the Intuit work very exhausting because they obviously, Intuit's a very big software company. So as a live support specialist, we had a bunch of different software on the computer that they provided us. And we could message other professionals, we could go to a Q &A page to find out, try to find the answers more quickly. Because keeping in mind, we're live on the phone with somebody. And there's not time limits on the calls, but they kind of want us to help as many customers as we can during our shift. So you really learn how to find answers as quickly as possible. And between federal and state and city potential returns, there was a lot of stuff to try to find depending on what the customer needed in a very short period of time. So you really learn how to be efficient, which is important as a tax return preparer because you want to be efficient. The more efficient you are, the lower the fee can be for the person that's hiring you to prepare the return or the more profitable that return could be if you can get it done a little more quickly. But the main thing was finding the right answers and knowing how to handle things. The rules are different everywhere from state to state. One of the tax controversy law firms I work with handles clients from all over the country. The other one's primarily clients in Michigan. There's very good tax software out there now that tax professionals use and that individuals can use if they're preparing their own tax returns. So the software does help, but it's kind of a... You know, as a tax preparer, you can't just rely on the software. You've got to still know all the rules, know what you're looking at when, after you've prepared it and want to make sure you didn't miss anything or input anything in the wrong place. For somebody who's got different sources of income and different kinds of deductions. I can honestly say they should not be preparing their own tax return, but knowing that a lot of people do, we're here to help or, they need to know where to find the answers to their questions as they're preparing. And that kind of gets into the, how important it is for them to organize everything properly, whether they're doing it on their own or having a tax preparer. prepare their return for them because the better organized their information is, the less time it's going to take the preparer to prepare it or the less time it's going to take them to prepare it and the less chance there would be of missing something or making a mistake because if they miss, usually if a taxpayer misses something related to income, they're going to get caught by the IRS after their return's filed. If they miss something relating to allowable deductions or dependents or things like that, it's not likely the IRS is going to catch it. And it is likely that the taxpayer would be overpaying if they miss deductions or miss other things that they could have taken, deductions, credits, dependents, whatever the case may be. So the better organized they can be, the better it is for them. Marci Grossman (11:38) Absolutely. Let's pause for a quick moment. Marci Grossman (12:18) And It's important to be organized, not just so you don't miss anything, but so that you don't double count anything. I have had clients throughout the years who have come up with their own systems of organizing information that for the efficiency aspect, it would have taken me less time if they would have just given me a shoe box because they come up with some organization system and it's not really relevant to the way that I need to input the information and check to make sure everything is available. So I'm taking all my time taking off their staples and taking off their whatever or recoding the sheets they give me or send so that I can get the information in the right place. Ron Silberstein (13:04) Yeah, for us, with ongoing clients, from year to year, figure out, how they give you the information and you kind of know what things you might need to redo or ignore, or ask about. But, we try to train them, so that next year they do a better job getting us the information or not giving us info that's irrelevant, but at least with an ongoing client, you get to know how they work and how they get you the info and what to look for, what questions to ask. It's the new clients, the first-time clients, and one thing we'll ask for on a first-time client is copy of their prior year's tax returns, maybe back three years, but at least, the last return that they filed so that you can look it over and while I'm not looking it over to catch mistakes that were made, oftentimes we do catch mistakes that were made to where we can file an amended return and get the money back from that year. But it's really, to get to know them, to get to know the kinds of things that they have on the return and to make sure that if they had something last year like if they had a K1 or if they had interest income from a certain bank or investment and they don't give you that information for the year that we're doing that you ask about it. Hey you had this K1 last year, you didn't give it to me for this year. If you still have it what's going on or you had interest income from this bank and you didn't give me the information what's going on. Marci Grossman (14:37) And That's a good rule of thumb as you organize your information as the taxpayer is look at your last year's return. Don't just assume you got all the envelopes or you downloaded all the forms and that's all there is. Start by looking at last year's tax return and look if the numbers are relatable. If your income is likely to be in the neighborhood of what your income was last year and it's not. Ron Silberstein (14:55) Yeah. Marci Grossman (15:05) Did you switch jobs? Is there an error on the form? What is the reason for things not being similar if they should be? And take that time and go through the steps, but something really important to know about preparing taxes, whether you're doing it yourself or you have a tax preparer, is the fact that I don't know of any other profession where the laws can change regularly. At any point in time, whoever the government is at the state, the federal level, whichever it is, they can make changes that will impact how a tax return is prepared. Things that weren't deductible are now allowable or things that had been deductible. The amount or ratios that is deductible has changed. And these happen almost every year. There's some tweaks, whether it's just the deduction rate has changed or the calculation for education or for childcare or whatever else that these numbers There's always something changing. So you have to pay attention to things, talk to people, read things if you're preparing your own return. Take that time and just slow down and make sure you're covering everything you need to cover that you're not missing something. Because no one is going to come after you and say, wait, you forgot to deduct. Ron Silberstein (16:29) Right. Yeah, and a good example is this year for, for 2025 tax returns. The One Big, Beautiful Bill that was passed last year made quite a few changes that could affect, a fair number of people. One of the big ones was changing the state and local tax deduction that's allowed on a schedule A for itemized deductions, where it used to be limited to $10,000 of property taxes, state withholding, state income taxes, all that kind of stuff. And this year for the 2025 returns, you can go up to $40,000 of taxes for the deduction. So we saw a lot of clients the past few years that didn't itemize deductions anymore. They took the standard deduction because by limiting taxes, their itemized deductions weren't greater than the standard deduction that they were given. It could all be different this year, when I say this year, I mean the 2025 returns, even though we're in '26 right now. But 2025 returns, people who didn't itemize the last few years might qualify to itemize. And it's something that they should be aware of when they're going through the return. And just because they didn't itemize deductions under 2024 return doesn't mean that they're not going to qualify in 2025. Marci Grossman (17:53) Right, and talking about the One Big Beautiful Bill Act, which is also, I've heard called O-Triple-B and OBBBA. Is that so many of the rules of it went back to January 1st of '25. Other ones don't start until '26. And so you may have heard a lot about one type or another of the changes that are a part of OBBBA, but it may not necessarily impact this year. I think there's the part about the not having to itemize to get the donation amount, but I think that starts for '26 tax returns. Ron Silberstein (18:09) Right. Marci Grossman (18:31) and there was about gambling losses only being 90 % of gambling income rather than 100 % of income but I don't remember if that was '25 or '26. That's been one of the nice things about software over the years. When I started preparing tax returns, it was by hand and you had to hope you got it right. Now you've got the software that when things don't come out the way you expect, you can say, ok who's making the mistake and why is the mistake? Did I code something incorrectly? Am I understanding the law wrong? Where is this difference coming from? We know that they're making updates to the software all throughout tax season so we know that as best as they try to make sure they've got it perfect they don't always have it perfect. Whether it's too easy to code something the wrong way and override something or just missing in some convoluted calculation, so it's it's nice to have that backstop of making Ron Silberstein (19:28) absolutely. Even in getting ready for our podcast today, because it's still early in the tax prep season, you can't efile a tax return until January 26th. E-filings closed down right now as many tax preparers know, but not that many individuals know. So it's closed down until January 26th. That's when returns can start being e-filed. But to prepare for our podcast today, I went into the 2025 tax software, popped in a property tax amount to see what it did. You know, if it, if it gave me the higher amount or if it was still limiting it to $10,000 because they didn't want to go back and check other sources to see when that change started applying if it was '25 or '26. another advantage to using a tax preparer is once they get into the tax season this year and have prepared some returns, the tax preparers will know, what rules apply to '25 and which ones don't as far as the changes go. So It could help make everything a lot easier for an individual or a business if they use a tax preparer. And there's tax preparers out there at all different fee schedules between the franchises that are out there. And I'm a franchise guy, so I talk franchises a lot. You've got H &R Block, you've got Liberty Tax Service, you've got ATAX, you've got others. But those tax preparers have pretty good software and once they've prepared a few returns this year, they'll know what the new rules are and how they affect people. The gambling loss thing you mentioned with those new rules, one way to still be able to deduct all the gambling losses is a if gambling is a business or profession for the person. So there's different things that a tax preparer might ask somebody who's got a bunch of gambling income that might help them benefit by being able to deduct more of their losses and by getting their losses on a better part of the tax return. So it's just a little aside there. Marci Grossman (21:49) That is Marci Grossman (21:50) And that also goes back to wanting to work with a tax professional or any financial professional that sees you, that knows you, not just picking up your information from the internet, but working with a professional who is looking at your documents and talking to you about your situation to get the information and give you the best advice for you. Marci Grossman (22:10) Let's pause for a quick break. Marci Grossman (22:13) And like with any other type of specialized situation, you want to try and find a tax preparer who has done a few of that type. If the CPA you go to specializes in dentist offices or specializes in type of business that they work with a lot then they may not be the place to go to for your gambling if that's something. You want to have a tax preparer that you're going to them to be an expert. So you want to make sure that they practice in that area if your business is something unique. Another thing I saw new this year is IRS is not sending out checks. Ron Silberstein (22:56) Right. Yeah. to get refunds, you're going to need to get the IRS your banking information so that the refund can be electronically deposited. And, they've had that option for a number of years. When they first started allowing that, I didn't really love the IRS having my clients' information. But I've become more and more okay with that over the years. I've never had a client that had an issue by having something electronically deposited or having tax payments electronically withdrawn. I used to prefer, if they had a refund coming, have it electronically deposited because you got it back a lot more quickly. But for the most part, when clients were paying taxes, I had them send a check in. That's changed, as far as my thinking in the last few years where a lot of clients now pay their taxes electronically, have their estimates taken out automatically, electronically, but now the IRS doesn't want to send checks out. So when you prepare your return or when your tax preparer prepares your return, they're going to need your bank information. Oftentimes just a copy of a void check can do it to where they have the routing number and the name of the bank and the account number. While we're talking about estimated payments, fourth quarter 2025, this is one bit of actual tax advice I'll give in this. Fourth quarter estimates are due January 15th, that's in two days. Right, yeah. Marci Grossman (24:29) This will not post in time, unfortunately. ⁓ Ron Silberstein (24:34) it's important because I'm not sure when this podcast is actually going to be released for people to view. But if you're seeing this podcast and you haven't paid estimates for 2025, and if you didn't pay a fourth quarter estimate, you should try to pay it as soon as possible because it can help reduce penalties and interest. Marci Grossman (24:55) Absolutely. Don't stick your head in a hole. Don't do the ostrich maneuver. If you have missed your estimates, if you have a unique situation that you need to pay an estimate this year, pay it sooner rather than later so that you can stop those penalties and interest from continuing to increase. They'd rather get it late than even later and the fees will rack up. Ron Silberstein (25:18) Yeah, they do. And it's important to stay on top, not just by filing your tax returns on time, but by paying your taxes on time. Marci Grossman (25:29) Yeah, that's something a lot of people don't realize. I sent in my tax return, let's say January 31st, owe money, I don't actually have to pay that until April 15th, but they do want it paid by April 15th. So delaying your tax return does not extend or delay when that money is due. Whatever its due date, if it's due by April 15th, you can file your tax return and it doesn't make your due date any earlier. But if you owe them money, don't wait till April 15th to file your tax return if you owe them for estimates that were already That's not part of the extra due you might have if you've otherwise filed correctly. Ron Silberstein (26:09) And Similarly, if you file for an extension on April 15, it's an extension of time to file, not an extension of time to pay. So what you should do, if you don't have all your information together or just aren't ready to file it yet by April 15, should do a little projection or have your tax preparer do a projection based on the information you have or the information from your prior year so if you owe money or can get an idea at least if you're going to owe money. And if you do owe money, then you need to send a payment in on April 15 with the extension request or there will be more interest and penalties later on when you file the return and send in the payment that you owe. because all taxes are due, by April 15th. An extension just lets you file later, but it doesn't let you pay later. Marci Grossman (27:06) If you are looking to get a new tax preparer this year, don't wait until you have your information gathered on March 15th to go look for a new accountant, a new enrolled agent, a new whomever would be your tax preparer. Find them now. Don't wait on that and don't wait to take them their information. Part of my engagement letter says if I don't have your information by April 1st, I can't guarantee your tax return by April 15th. We can work all the hours we want to work, but there is a limit to what we can do. And if we've got questions, if you missed a piece of information or there's something we've got to bring up something new this year that has more information, give your tax preparer a chance to prepare your taxes timely. Ron Silberstein (27:51) Yeah, it's, that's our busiest time of the year. And, many tax preparers by then are kind of worn out from all the extra hours that they've been working. The other thing is most of our biggest clients and tax return clients oftentimes aren't getting K1s, until the end of March or beginning of April. So we've got some really big returns that we're usually doing around the end of tax season for real important, ongoing clients. Many of them are also business clients and then we're preparing their personal returns also. So the sooner somebody can get a tax preparer their info, the better. New clients take a little bit of extra time to get them on board and get familiar with their situation. So, if you're switching to a new tax preparer or hiring a new tax preparer, you definitely want to get them the info sooner versus later, even if it's not all the info, because we can start. If we get 75 or 80 % of a return input and we know that we're just waiting for some last minute K1s, it helps us get the return done a lot more quickly once they get those K1s. Marci Grossman (29:13) We want to do right by you, but you have to give us half a chance. Ron Silberstein (29:18) Right. Marci Grossman (29:19) Ron, can you think of anything else you'd like to mention that maybe we haven't covered? Ron Silberstein (29:23) It's really important to just have good records. If you have a business, whether it's an entity that files its own tax return or whether it's a single member LLC and it's going on your personal tax return on a Schedule C. Try to keep your records contemporaneously. Try to do your bank reconciliations every month. Try to keep track of your auto expenses. Try to get everything categorized monthly or quarterly So that you're not trying to get the whole year done in February or March and then get it to your accountant. It'll make it a lot easier to stay organized. One thing a lot of people forget on their homes, on their principal residence is they forget to keep track of all their improvements that they've made over the years. So, if they sell their house and want to take advantage of the exemption for gains on the sale of a personal residence, it's important to know what your basis is. And that starts with what it cost you to buy the house, including any closing costs. But then over the years any improvements you made you need to keep records of those so that you have them. Because it may be that you bought a house for a hundred thousand dollars in 1990 and now it's worth $900,000 and you made improvements over the years, you put a new roof on or a new bathroom or kitchen in, you need the records for all of those so that you can show what your basis is, what your adjusted basis is in that residence so that you come up with the correct gain which will be lower than if you didn't include all those expenses. Marci Grossman (31:14) True, Well, Ron Silberstein, thank you so much for being my guest today. We appreciate you taking the time to join us. Ron Silberstein (31:23) Marci, I appreciate it. Thanks for having me and have a great tax season. Marci Grossman (31:29) You To my listeners, I will be sharing a link to Ron's information in the show notes. Please check him out. He has interesting information. Don't forget to subscribe, leave us a review and stay tuned. I'll see you next time. This has been MoneyMarci on Marci Talks Money (and Life). You got this.