Some U.S. Tax Questions (CPA Concerns)

Question

I tried to do my personal taxes myself with TurboTax this year, but decided my situation was more complicated than I could handle, so filed an extension and decided to engage a CPA. He missed a few items in his initial draft, so I am naturally checking subsequent drafts very carefully, and have a few concerns.

Because of the pre-work I did in Turbotax, I had something of a preview of the numbers and the information required to complete the forms. Here are the questionable items:

1. As noted in this post , I received a share award which resulted in a short term capital loss. Actually the reason I asked the question is that it was not included in his initial draft (it was one of the things he missed). He has included this on Schedule D line 1a, but I don't see any details on the actual transaction.

2. Semi-related, Turbotax asked me to fill in individual stock sales with proceeds and cost basis information. I provided this to him, but don't see the detailed transactions documented anywhere. Again, it seems to be documented on Schedule D in boxes 1a and 8a.

3. I received a 1099-Q for a 529 distribution for a family member. It was used for qualified expenses, so should not be taxable. Turbotax asked me to the beneficiary's name and SSN. He has not asked for this information, and I don't see anything about the 1099-Q in his draft.

4. I started my own company last year in May, so did not start paying estimated taxes until the Q2 payment. I believe I paid the correct amounts based on my (possibly flawed) understanding of estimated taxes. His initial draft had me paying a penalty. I explained my situation for the year, and his next draft had the penalties removed, with no documentation or explanation.

Do these all seem reasonable, or should I be concerned about these items?

Answer 1

He has included this on Schedule D line 1a, but I don't see any details on the actual transaction.

It is reported on form 8949. However, if it is fully reported in 1099-B (with cost basis), then you don't have to actually detail every position.

Turbotax asked me to fill in individual stock sales with proceeds and cost basis information. ... Again, it seems to be documented on Schedule D in boxes 1a and 8a.

See above.

I received a 1099-Q for a 529 distribution for a family member. It was used for qualified expenses, so should not be taxable.

Then there's nothing to report.

I believe I paid the correct amounts based on my (possibly flawed) understanding of estimated taxes. His initial draft had me paying a penalty. I explained my situation for the year, and his next draft had the penalties removed, with no documentation or explanation.

IRS assesses the penalty. If you volunteer to pay the penalty, you can calculate it yourself and pay with the taxes due. Otherwise - leave it to the IRS to calculate and assess the penalty they deem right and send you a bill. You can then argue with the IRS about that assessment. Many times they don't even bother, if the amounts are small, so I'd suggest going with what the CPA did.