Frequently Asked Questions

 
 

TAX QUESTIONS

HOW MUCH DOES IT COST TO GET MY TAXES DONE?

The short answer is that it depends. The more complicated the return, the higher the cost. The price can range anywhere from $400 - $2500+. As an example, a married couple who owns their own home with two children and has two W-2’s would have an average cost of about $600.

what is the turnaround time to prep a tax return?

Once API has all your tax documents, our goal is to respond back to you with either questions or tax results within 14 business days.

what’s the best method to get my tax documents to you?

We have a secure online portal called TaxDome for uploading and transferring files. It is our preferred method for receiving your tax documents as well as the mode we use to send your results and final tax return back to you. It also serves as an online storage database for your files that you can access any time with your own login. For more information on this system, please navigate to our TaxDome page.

WHAT HAPPENS IF I WERE TO GET AUDITED BY THE IRS?

In the case of a tax audit, the IRS will want to substantiate all income and expenses. If API processes your accounting for you, we will be able to provide the IRS with financials and evidence to support your claims. If API does not do your accounting, it is up to you to provide them with the info they are looking to audit. API has dealt with several audits over the years and would be more than happy to help you to the best of our ability.

I RECEIVED A NOTICE FROM THE IRS, WHAT DO I DO AND CAN API HELP ME?

Dealing with IRS notices is one of our many specialties. Send us the notice(s) you have received so we can offer our services to help you.

I RECEIVED A PHONE CALL FROM THE IRS, HOW DO I HANDLE THIS?

THIS IS A SCAM. The IRS does not contact taxpayers via telephone, only by mail. If someone calls you and claims they are the IRS, hang up the phone immediately.

CAN'T I JUST do MY TAXES ON TURBOTAX?

Tax law is a complex code, where there are thousands of exceptions to each and every rule. Our tax professionals are able to detect and calculate both present and future tax, whereas TurboTax is strictly focused on the current year and has only so many functions. TurboTax can be a dangerous tool in the hands of someone who has never filed a tax return. Our tax professionals consider both the information given to us by the taxpayer AND the information not given to us. There are several deductions/credits that the average taxpayer is not aware of.

There is a difference between a tax preparer and a tax professional. Any individual can prepare there own tax return on TurboTax. You simply gather all the tax documents and dump all the information into software such as TurboTax. Then it pumps out a tax return and gives you a message, “Congratulations, you are now complete and here is your refund!” making you feel like you did a great job. When in reality, you may have missed out. This is a tax preparer. A tax professional is someone that not only looks at the current year’s return, but takes into account what you have reported in the past AND what your AGI looks like going forward into the unknown future. This is the value that a tax professional adds; by being able to look through and squeeze money out of the years you paid too much tax on and determine whether or not it is a good idea to take advantage of some tax breaks now or later. An individual or a tax preparer does not have this knowledge, nor can they achieve this knowledge by simply doing one tax return, once a year.

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MORE TAX QUESTIONS

when is the tax filing deadline?

Tax returns are to be filed by April 15 for individual filers and C-corporations (if FYE is 12/31). Non-profits are due on May 15. All other business entities must file by March 15 (if FYE is 12/31). If the deadline falls on a weekend or holiday, the deadline is automatically moved forward to the next business day.

if i file an extension, when is my tax return due?

If you file an extension, you get an extra six months to file your return. Individuals and C-corps have until October 15, non-profits until November 15, and all other business entities until September 15. If you are active in our system, we will automatically file an extension for you on the first filing deadline.

if i file an extension, does that mean my tax payment gets extended too?

Unfortunately, no. An extension to file is not an extension to pay. If you think you will owe money but are not ready to file, API can help file the extension and calculate what you should pay to avoid a late payment penalty plus interest.

how can i pay my taxes online?

For California tax payments, go to the Franchise Tax Board’s website: www.ftb.ca.gov/pay

For Federal tax payments, go to the IRS’ website: www.irs.gov/payments

I still haven’t RECEIVED my refund. How can i get a status update?

For an update on your California refund, go to the Franchise Tax Board’s website: www.ftb.ca.gov/refund

For an update on your IRS refund, go to the IRS’ website: www.irs.gov/refunds

when are estimated taxes due?

If you owe estimated taxes, we will give you instructions on your results letter of the amounts and dates due. They are typically due at the end of each tax quarter:

  • April 15, June 15, September 15, and January 15 (December 15 for business entities)

If the date falls on a weekend or holiday, the deadline is automatically moved forward to the business day.

what do you need from me to prep my tax return?

This list is different for each person and each filing entity. For an Individual, the list generally consists of the following:

  • Any and all W-2s, 1098, 1099 and Schedule K-1 forms

  • Itemized deductions - Property tax statements, cash/non-cash donations, unreimbursed job-related expenses, casualty/theft losses, etc.

  • Small business owner income/expenses - including car and business use of home (utilities, repairs, etc.)

  • Rental income/expenses

  • Other adjustments – Form 1095A, IRA contributions, dependent care costs, alimony, student loan interest, jury duty pay, foreign tax credits, residential energy efficient improvements, etc.

  • Amounts and dates of estimated tax payments

  • If you received a stimulus payment, the Notice 1444 that was issued to you a couple weeks after the payment was received

For a more detailed list, please refer to our more detailed Tax Prep Checklist

ACCOUNTING & PAYROLL QUESTIONS

DO I NEED MONTHLY ACCOUNTING, OR CAN I DO QUARTERLY OR ANNUAL ACCOUNTING?

The first thing to consider is how often you pay sales tax. Some businesses are required to pay sales tax on a monthly basis. Others are required to pay on a quarterly basis, while some are not required to pay sales tax at all. Therefore, if you pay sales tax every month, then you must have monthly accounting. The same logic applies for quarterly sales tax. We highly recommend to all of our clients to sign up for monthly accounting. This way the books are always up-to-date and can produce financials instantly to satisfy a loan request, an audit, etc.

IS THERE A REASON API SHOULD DO MY ACCOUNTING? I HAVE DONE IT MYSELF IN THE PAST.

Accounting serves many purposes including the production of a company’s financials, preparation of the current year’s tax return, calculating the correct amount of sales tax a company owes, determining cash flow, and enabling business owners to make economic decisions. It is extremely important to obtain a quality accountant so that one is not at risk for having incorrect numbers that are used for all the above tasks. API has a team of accountants that work together to deliver the best results. If one has been doing their own books and is not an accountant, we highly recommend hiring API to handle your accounting.

DO I NEED TO GIVE API BANK LOGIN(S) TO PROCESS MY ACCOUNTING?

In most cases, the answer is yes. This allows us to research the account without having to hassle you. It also saves us a tremendous amount of time, and because we charge at an hourly rate, it will save you a considerable chunk of change on your bill. The easier and faster you can make our job, the less money you will have to pay for our services. However, if you do not feel comfortable giving us an accountant’s login, we understand completely and we can certainly visit other options.

DO I HAVE TO PAY SALES TAX? CAn API do it for me?

Generally, states require businesses to pay the sales taxes they collect quarterly or monthly. You’ll have to use a special tax return for sales taxes, and report all sales, taxable sales, exempt sales and amount of tax due. Not paying on time can result in penalties. In short, if you are collecting sales tax with your sales, you are likely required to pay sales tax each quarter/month. And, yes, API offers this service.

WHAT'S MY SALES TAX RATE?

All sales tax rates depend upon the city one conducts business in. You can find your sales tax rate on the California Department of Tax and Fee Administration's website.

HOW OFTEN DO I HAVE TO PAY MY EMPLOYEES?

At least once a month. However, we recommend paying employees twice a month.

WHAT DO I NEED TO PROVIDE IN ORDER FOR API TO PROCESS MY PAYROLL?

We will need the following:

  • W-4’s for each employee

  • I-9’s for each employee

  • Business bank account information - routing and account numbers

WHAT IS A NET ZERO CHECK?

A net-zero check is a check that an employer writes to themselves. It is the law for an employer to pay themselves a reasonable wage. To avoid paying more taxes and to satisfy the required wage, we use the net-zero check. Normal checks have a gross wage, and then pays percentages to social security and other federal/state payroll taxes such as SUI/ETT, PIT/SDI, etc. and then the remainder is the net pay. For a zero-net check, we spread the net pay across federal taxes so that your net pay is zero, and therefore are left paying less tax (or receiving a refund for overpaying tax) at the end of the tax year.