Tax season has officially begun. It is often a stressful time, and one that invokes one of two feelings: a feeling of exhilaration, knowing that a return this year will allow for that vacation long-awaited, or the feeling of dread because there’s no telling how well one’s money was managed during the previous 12 months.
Given the economic beating our nation undertook in 2013 and before, many are experiencing the latter. However, this is not the end-all outcome, whether we’ve made some poor financial decisions last year or not. January is just barely ending, and every day is a chance to make a “New Year’s Resolution.” With some careful financial planning and educated decision-making, I am here to tell you that 2014 can be your best financially-savvy year yet.
For our first feature, we had a sit down with tax advisor, accountant, and founder of Brookstone Tax Solutions, Samuel Anjejo, for an insider look on approaching this year’s season from an educated point of view.
It’s about 9:58 AM, and I walk into the grey stone building filled with offices, past a lady carrying a briefcase and a Starbuck’s cup. Colton is a busy city, and filled with flourishing small businesses. A little ways down the hallway I see Brookstone Tax Solutions, where accountant Samuel and I agreed to meet for the interview.
He greets me, inviting me to sit down, and we engage in some formal pleasantries before the interview begins. Although we’ve known each other for years, beyond the meetings we have for my personal taxes, this is my first insider look into the business itself.
Me: So tell me about yourself. Where are you from? Where did you go to school?
Samuel: I’m Kenyan born, but a Loma Linda, CA native. I actually went to school at Pacific Union College and graduated from there in 2009.
Me: (Cheer—Pacific Union College is my Alma Mater as well).
Samuel: Yes. I graduated from PUC with a Bachelor’s in Business Administration.
Me: What do you do now?
Samuel: Here at Brookstone Tax Solutions I do tax planning, tax preparation, tax filing, audit assistance, and general financial planning.
Me: What made you choose to be an accountant? And why taxes?
Samuel: I’ve always been fascinated by money and law, and taxes are the easiest way to bring the two together. By being a tax accountant, you can work with law and numbers. Another one of the reasons I decided to become an entrepreneurial tax accountant was because of my first job at an established tax franchise. After working with some household names I realized that they were more focused on getting as much money out of people as possible, rather than helping them understand their taxes and how to manage their money well. Some places I’ve worked with charge $260-$500 for a simple tax return. And most of the clients we were serving were low-income, high-school graduates, who had no idea what their bills were, or how much they were really being charged. I didn’t like that.
Me: So is that why you started Brookstone Tax?
Samuel: Absolutely. I wanted to charge people reasonable prices and give them valued advice for their money.
Me: That’s awesome. So you are an entrepreneur as well. When did you actually start Brookstone Tax?
Samuel: Brookstone Tax was founded in 2011. But I’ve been doing taxes for at least five years now.
Me: Was it hard starting out as an entrepreneur? How did you go about the process, and what advice would you give other young entrepreneurs in the Inland Empire, or anywhere in the U.S.?
Samuel: I think the biggest shocks were the amount of paperwork and procedures you have to go through before you can even begin to get your business going, and how much it costs to get that paperwork done. So if you’re going to start a business, the first thing you need to do is make sure you have a solid business plan.
Me: So is that something you do as an accountant?
Samuel: I offer very general business plan advice, but I would suggest consulting with a lawyer you trust for any in-depth legal counsel and planning. Most county offices also offer some kind of business advice or counseling. The San Bernardino County Small Business Development Center offers free help for entrepreneurs just starting out. They also have seminars you can attend on how to market your products and where the needs are. Product to market fit is very important when starting a business.
Me: So basically, make sure you have a plan and some good advice before you spend all of your money. Save it and do some research first.
Me: Great advice. Since we’re talking about saving money, I have a question: why should I spend money and go to an accountant, versus doing my taxes online free with TurboTax, or at H&R Block? That’s what everyone else uses.
Samuel: That’s like saying, “Why should I go to the doctor for a diagnosis when I can look at WebMD online free?” The principle is the same. The best way to look at this question is not from a monetary point of view, but rather as a question of how do I pick an efficient tax-preparer. For some people, filing online may be a good option. If you already know quite a lot about taxes and tax-preparation, then filing online is a good option for you. However, if you don’t know anything about taxes, and don’t even know what a deduction is, you should definitely seek the advice of a tax-preparer.
Me: So what are some guidelines for choosing an efficient tax-preparer?
Sam: The first question I usually get is “How much do you charge?” If you’re going to buy a car, your first question shouldn’t be focused on the cost of the car. Your questions should be along the lines of “How many miles per gallon does this car get?”, or “How well is this car going to perform and for how long?” These questions are similar to those you need to ask yourself when choosing a tax-preparer. “Does this person know what they’re doing?”, is a great start. Don’t be afraid to ask them a few questions. Often the danger with some popular tax preparation franchises is that they have such a high turnover. Every year you might have a new tax-preparer, who may have just finished a two-week course, and they are now preparing your taxes. Most of them are only taught how to input your information into the computer, and not necessarily how to deal with your individual financial situation.
Me: So you’ve had experience with both sides–as a franchise tax-preparer and as an entrepreneur?
Samuel: Yes. I’ve worked there previously so I’ve seen both sides. It’s very important to make sure the person you’re working with has experience filing the kind of taxes you need done. If you have a flourishing business, you will need someone with business tax experience. If perhaps you’re a resident alien with foreign income, you will need someone with tax expertise in that area. After you’ve figured out those details, then you can assess your options based on how much they charge. The national average for tax preparation in the U.S. is around $200. So price is something to consider once you’ve weighed the specific qualifications of the preparer.
Me: Any other tips for choosing a tax advisor?
Samuel: One other important thing to consider is the availability of the preparer. Will they be accessible year-round? If for some unfortunate reason you are audited, you need to be able to contact the person who prepared your taxes in the previous year(s). Some companies may not be available all year. This is another reason why developing a relationship with one preparer may be helpful.
Me: So what are some of the number one things people should know about taxes this year? Are there any big changes?
Samuel: One of the biggest changes for this year would be ObamaCare. (Click HERE for more information). There is a penalty assessed for those who don’t have healthcare insurance, and that penalty may be taken out of your return next year. So make sure to take care of that formality prior to the tax filing deadline. There is another tax adjustment for those with in a higher income tax bracket, or higher capital gains, but if you are not making an upper-class income most likely that will not apply to you. But those are the two most prevalent changes this year.
Me: Thank you for sharing that. So now for the question of the year: I want to be financially savvy in 2014; where should I start?
Samuel: 1: The first thing you need to do is take control of your finances. You MUST know what’s going on with your money. A lot of people don’t. I should be able to walk up to you on the street and ask you “How much money do you have in your checking account?”, and you should have a fairly if not completely accurate response of how much money you have. Most people just swipe, swipe, until “Ooooooo…..I’m overdrawn.” Essentially, it’s just like making a business plan for your business. Ask yourself, “What are my long-term life goals, and what will it take to achieve them?” Once you’ve figured that out, you can determine what your finances need to look like in order to accomplish those goals. If you want to travel, you need to save for that. If you want a big house, you need to save for that as well. For this generation of young people, there are also a few things you need to do as soon as you graduate from college, which leads me to my next point.
2: GET A HOLD OF YOUR STUDENT LOANS. Make sure you know how much, to who, and what the interest is on each loan. Then calculate the time it will take you to pay them off with a little more than the minimum payments. Generally, when you first graduate you do not have an excess of bills, children to provide for, or outstanding additional expenses. The sooner you can pay your loans off, the sooner you can start saving for retirement, a family, your children’s education, etc., stopping the cycle of loans, loans, loans. Many young people these days also graduate from college and think they’re above working retail, or food service for extra money. If you have extra time on your hands and you have loans, pick up a few shifts at McDonald’s, 24 Hour Fitness, Target, etc. Your friends may laugh at you now when you’re working on a Sunday instead of lying in bed at home, but when your bills are paid off and you’re debt-free they will wish they had done the same thing.
3: KNOW YOUR CREDIT SCORE. Know what it is, and how to find it. Your credit score is composed of several different areas, and most of your financial transactions and bills are incorporated into it. (Click HERE for more information on your credit score breakdown). Make sure you are aware of what is being put on your credit, and by whom. Credit is VERY important in any major purchases you make in life, including buying a car or home, and can even affect your ability to purchase a cell-phone plan. KNOW THIS INFORMATION! (Visit annualcreditreport.com for more information on checking your credit score).
Me: Yes!!! This information is VERY important for you to know. Are there any last tax tips you would like to leave me with, Samuel?
Samuel: Well, your taxes are the single biggest expense you will have in your life. Everyone has to pay taxes. The sooner we realize that taxes are not the enemy, the sooner the process will become easier. The question then will be how do you legally pay the smallest amount possible on your taxes. (Keyword LEGALLY!!) With the help of a good tax advisor you can determine that, and pay exactly what you owe, and not a penny more. But in the end, the actual filing of taxes is only about 30% of the work. The most important part happens throughout the year, when you’re shopping at Nordstrom, or sifting through sales at H&M, spending money. Find a good tax advisor and stick with them. That person will help you make wise financial decisions throughout the year, so when tax season comes you will be ready and educated. And if you are looking for an educated tax advisor, Brookstone Tax Solutions is a great place to get your taxes done.
Me: Very true! It’s where I get my taxes done! Well, thank you Sam for your time and for this very useful information! I look forward to consulting with you on my taxes.
Samuel: You’re very welcome.
And that marks the conclusion of this interview. I hope you learned as much as I did. The world of American economics can be a very confusing place at times if we are not educated and aware of all its facets and intricacies. Let’s be informed in 2014 and make the best financial decisions possible in order to foster a more stable economy.
If you are interested in getting in touch with Brookstone Tax Solutions, please use the information below. They will be looking forward to hearing from you. Thank you so much for reading and don’t forget to like, comment, share, and subscribe!!Brookstone Tax Solutions 1400 E. Cooley Dr. Suite 103 Colton, CA. 92324 firstname.lastname@example.org Twitter: @brookstonetax Facebook: Brookstone Tax
Facebook group: Millenial Money (A facebook group by Brookstone Tax where you can pose any financial questions you have to a group of flourishing young business and lifestyle individuals for comments or feedback).
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