Engagement Letter & Fee Agreement - Individual
(Must be signed prior to the start of tax preparation – (If married filing joint, only one is required to sign, though we would prefer both signatures)
We are pleased to have this opportunity to assist you with your income tax return preparation. This agreement will confirm the understanding between you and Hampden Hills Tax Service, Inc., hereafter known as HHTS, concerning services we will provide. We will prepare the U.S. federal, state income tax returns, & gift tax returns from the information you provide to us. We file taxes for clients who live in all 50 states and DC. We do not prepare oversees tax returns, non-resident federal income taxes returns, or taxes for people living abroad (exception military personal & people who are temporarily living oversees if income is reported on IRS tax forms).
For P.O.A.s and Conservators, when you read and sign this document, you are signing on behalf of the individual, but you are agreeing to the terms of this agreement on their behalf. Since you represent the person, you are taking the legal responsibility when signing this document.
We will not audit or verify the information you submit, although we may ask you to clarify it. We are responsible only for the preparation of the income tax returns. We return all original documents you give us and give you a complete copy of all tax returns. In limited circumstances, when people switch to using our portal and have dropped off their documents, but are unable to return to get them, we will at the client’s requests, shred those documents for them.
We also do not file a state only income tax return, we must file the federal return in order to file a state return. In terms of individual filers of U.S. Federal income tax & gift tax returns, we only prepare IRS Form 1040 Series (except 1040NR), IRS Form 709, and IRS Form 706 for a client who was married and their spouse passed away and they are electing portability.
We require records to be provided for extremely high audited areas of the tax return like cash charitable contributions over $250 and if your non-cash contributions are over $500. We must have all W-2 forms and 1099 Forms prior to completion of the tax return. We must also have any tax reporting documents. Please make sure any documentation you provide to us is in black ink.
It is our understanding that all of the information submitted to us for the purpose of tax return preparation is true, correct, and complete to the best of your knowledge and belief and that you have the necessary written support for that information. If you are an executor or administrator or filing on behalf of another due to a P.O.A. or Conservator document, this applies to you on behalf of the person/s you represent.
By providing your signature below, you are confirming to us that unless we are otherwise advised: your travel, gifts, and related expenses are supported by the necessary records required under the Internal Revenue Code; your business use of mixed-use property, such as computers and vehicles, is substantiated by a log of such use as to preclude the deduction of any personal expenses, which may be related to such property. You understand that, even if you qualify, you may not claim the Earned Income Credit (EIC) if you have not lived with the child for over half the year, even if you have supported them. If you qualify for the Earned Income Credit (EIC), Child Tax Credit (CTC), Additional Child Tax Credit (ACTC), American Opportunity Tax Credit (AOTC), or Head of Household (HOH), you can provide documentation to substantiate eligibility for and the number of credits claimed on your return should your return be selected for an audit. If you have any questions as to the type of records required, please ask us for advice in that regard.
Sole Proprietorship, Single Member LLCs, and 1099-NEC businesses – You must provide an acceptable profit and loss in order for us to prepare that part of your taxes return. The only exception is for those who get a 1099-NEC, but have no expenses or deductions. We do not do bookkeeping for tax returns starting with the 2025 return. We do have companies that pay us to do monthly bookkeeping for their business, which is acceptable, but we do that year-round on a monthly basis and do not start bookkeeping during tax season. We have worksheets you can use to assist you in this requirement.
Information Needed by: In order to complete appropriate tax return/s and for taxes to be filed timely, we require that all information be provided to us no later than March 25th of each year. If you submit paperwork after March 25th, we do try and complete all returns by the due date, but if the information is submitted after March 25th, then there is no guarantee that it will be done without an extension being needed. If the due date of your tax return is any other date other than April 15th, then we need your information at least 20 days prior to the due date of the return to ensure we can timely complete your return.
For those who we have either started preparing due to us preparing your return as a drop off or by appointment, but could not finish due to missing information, we have requirements for getting us that required information in order for us to be able to prepare that return by the due date and without an extension. Typically, that is 3 weeks from our request for request made before March 10, though a preparer can make an exception here, but only for a few reasons. From March 10 – March 31, we must get the information by April 1st. From April 1st – April 7th, we must get the missing information that day. If we do not get all the required missing information by that due date, an extension is required for your taxes. As a note for this section, clients often times will drop off or put in the portal what they say is the missing information, but a preparer cannot verify it by the due date of what we require to get that missing information and when the preparer does verify it, it is not what we need or what we asked for. In this situation, an extension will still be required.
For people filing within the extension period (meaning filing between April 16th or whatever their due date of their return and the period the extension ends), we again need all of your information at least 20 days prior to the extension due date to ensure we can file your return within the extension due date period. For those who get us information after the 20 days prior to the extension due date, the return will most likely be filed late. It is your responsibility to get us all of the information, including any missing information, by our requested information due date, which is always 20 days prior to the due date of the return or the extension.
If you are a new client and we receive your taxes March 25th or after, we will not be able to file your taxes by the due date and we will ask you about an extension. In rare cases, it might become evident that we cannot finish all of the returns by the due date for both existing and new clients before the March 25th date. In those cases, all clients will be notified that we will have to file an extension and that will give the clients time to decide if they want us to file an extension or if they want to try and take their taxes somewhere else. Our staff will simply say we have to file an extension and ask you if you want to make a payment and/or how you want to handle that extension. If you want to take your return somewhere else, it is your responsibility to inform us of that prior to us filing the extension, but you are responsible to pay us for any work already done on your return. Also in those cases, we tell everyone dropping off their taxes, when they drop off about the extension. For people who have already brought their information in, but we are missing what we need to complete the return, that additional information must be received by the date we inform you, which is also listed in this document prior to avoid an extension being filed on your income taxes.
Be advised that the last month of the extension due date, we normally have about 100 returns with missing information that are mostly complete, but are not able to be 100% completed. It still takes time to complete those returns and the longer you wait the harder it is to get those finished on time. That is why once we are within the 20-day window of the extension due date, we cannot guarantee completion of the return by that due date.
Portal: We utilize a portal in order to share information with our clients and get information from our clients. We use the portal for ongoing returns that we are filing. If you upload information into the portal and we are not currently doing your return and/or we know we are getting and sharing information in the portal in reference to that same return, you must call the office and let us know that you put information in the portal. The messaging system in the portal is designed to be used when we are actively doing your return and you want us to handle it through the portal. Outside of that time, please contact our office directly using our phone number so ensure quick responses to your questions. Again, when you upload your information for the first time or in pieces before we can start your return, once you are ready to have your taxes prepared, please call and inform the receptionist so we can start the return.
Important Note: We stop using or monitoring our portals at 1:00 pm on March 15th and resume use on April 16th or the next day we are open. We also stop using or monitoring the portals on April 14th at 10:00 am and do not resume use until the next business day after the due date, which is typically April 15th. During these times you must call the office during our business hours.
Up to Date Contact Information – It is the responsibility of the client to keep up-to-date information in terms of phone numbers, addresses, and e-mail addresses on file with us. We do not only need to contact you to get information to complete your return, but we also need to inform you once your return is completed. There are also times we must talk to you after we file your return originally. Examples are if your return rejects when we attempt to file it or we get some type of notice from a legal tax authority and we need to contact you. There might be a law change that we realize affects you or an issue on your return that comes up some time after we file your return. Due to these reasons and other reasons, we did not mention, please keep us informed of any contact changes. We do not attempt to contact clients by mail for these issues.
Extensions: If we do not have all the information needed to complete your return by the “Information Needed by date” listed above, you are a new client filing with us on or after March 25th or a sooner date if we need to move the date back, or for whatever reason we are not able to file your return by the due date, it may be necessary to file an application for an extension. We also need to file an extension if we have requested information from you and you have brought in only part of the information or you have brought part of the information and told our staff that was everything that was needed and it is after the Information Needed by Date. An extension may require a tax payment made by you by April 15th, or if extended, the due date of the return, in an amount approximating your unpaid tax liability. If you use a fiscal year, that date might be different. That payment amount, regardless if it is a guess or an amount that is more specific, is the responsibility to the client to come up with. Until your return is complete, we have no way of knowing how much you might owe and we are not able to guess. The reason you are filing an extension is either you have requested an extension, you have brought in your records after the above date and we do not have enough time to complete them, or for some other reason we are not able to complete your return by the due date. Our clients are fully responsible to make any payment due by the due date of your return and if you estimate, we suggest you estimate high and just get any overpayment back as a refund on your return. An extension is only an extension of the time to file the tax return, not an extension of the time to pay amounts due on the return. An extension, if accepted by federal and/or states, only extends the filing time, not the payment due date and gives you a new filing due date to file called an “Extension Due Date”. Only one extension can be filed for a client.
HHTS Extension Requirements: In order to file an extension, we require an intake for new clients, and engagement & fee agreement by everyone, and an Extension Request form by everyone, which is found on our website. The Extension Request Form is not one you create or generate, but it is our internal form we use for extensions. Without these items, received by our office by 2:00 on April 15th, there is no extension that will be filed for you.
Once we file an extension for you, we cannot amend it. We can file zero balance due extensions. For zero balance due extensions, no signature is required on behalf of the clients on the tax extension form, but we still need our requirements listed in this HHTS Extension Requirements Section. If a client wants to mail a payment with their extension, they must come in and pick up the extension voucher or we can put the extension voucher in the portal for you if you have a portal with us. We do not mail extension vouchers to clients or for clients. If a client wants us to electronically debit their extension payment, taxpayer and spouse (if married), must sign an e-file form prior to us filing the extension, we must get that e-file form back by 10:00 a.m. on April 13th, and we must have either a voided check that we can read or an ACH deposit form on file before we can prepare the extension. For those who get us their e-file forms back after 10:00 am on April 13th, you must call the office (Do not e-mail or put a message in the portal) and see if we are able to file it on time for you. We normally do not offer drafting of payments for extensions after 10:00 a.m. on April 13th, but instead do them as a mailed in voucher that you must pickup and mail with your payment.
We notify each client, either when you come in the office, if we cannot finish your return, or once we receive your tax documents of the extension requirement if you file with us. If we call and you do not answer, we will leave a message. If you have been communicating with us in the portal, we will put the question in the messenger in the portal. We do not communicate by e-mail. If you are not using our portal to communicate with us, we will attempt to call, in order to either leave a message or talk to you, up to 3 times. Once we talk to you, leave a message, or put a message in the portal, it is your responsibility to either return our call, inform us if you want us to file an extension or not, and give us the required extension information by filing our Extension Request Form. If we have left a message (either by phone or portal) or talked to you and you have not submitted our Extension Request Form, Engagement & Fee Agreement, and (if new client) our Intake, then you are responsible for any and all penalties that are applied from not filing an extension. For Portal extension information/questions: We stop using the portals on April 14th at 10 a.m. and do not resume them until the date after the due date, so you must message us prior to that date and time. From April 14th through the due date, you must call the office for extension questions or information, do not use the portal. If we make an additional call to ask about extensions, those are simply a courtesy and not a guarantee that those can or will happen, even if they have happened in prior years. We normally use the same method to contact you as we have been talking to you about your taxes. Example: you have contacted us and use the portal, then our contact is normally the portal. We normally do not use multiple methods to contact you, however at any time, we can at our discretion, change to calling you and using that as our method to attempt to reach you.
Final Day of Tax Season: Our tax season hours are only through April 14th and then we change to off-season hours starting April 15th, which the exception of if April 15th ends a weekend, we change to our off-season hours April 16th. If April 15th lands on Monday = Saturday, then we do not close for lunch on April 15th. If April 15th lands on a Saturday, we are open and if it lands on a Sunday, which we are closed, we stay open for lunch on April 16th. If the federal government extends the due date of tax season, we do not extend our tax season hours. Our off-season hours are Monday – Tuesday 9-5 (closed 12-1 for lunch) and Thursday – Friday (closed 12-1 for lunch). We are closed Wednesdays and weekends. We operate on a reduced staff after April 15th or if April 15th ends on a Sunday, April 16th. IRS observes Emancipation Day on April 16th, which is not a federal holiday, but is observed in Washington D.C. If April 15th lands on a weekend, then the due date of the return is April 17th. If April 15th ends on a weekend, the technical due date is April 17th, however we file everything for the completion of tax season on either Saturday April 15th or Monday April 16th if April 15th lands on a Sunday. If the due date is April 17th, we are still open and we will still file income taxes on April 17th, but we do not file extensions on April 17th.
Extensions take time to complete and we close and turn off our phones at 5:00 pm on April 15th if April the 15th lands on a weekday. If April 15th lands on Saturday, we close at the designated close time, which is posted on our website. If April 15th lands on a Sunday, which we are closed, then we close at 5:00 pm on April 16th. We stop taking any extension request at 2:00 pm on April 15th or if April 15th is a Sunday on April 16th. We do not have enough time to complete extensions for people after 2:00 pm on April 15th or April 16th if April 15th lands on a Sunday. In order to make sure we can do everything we are required to do on filing returns and extensions on our final day we file extensions, our phones turn off at 5:00 pm, we close and lock the doors, and we do not open the door after that time. After 5:00 pm, our complete concentration is required in order to get everything correctly filed and everything that has to be done by the due date. In rare cases, if we have time, which we normally do not have since we do not finish all the returns being filed till normally right at midnight on the 15th, we may at our discretion, file a zero-balance due extension for clients that we have not talked to. There is no guarantee that it can or will happen, but we may file those. If you filed an extension on your own, it is your responsibility to inform us of that prior to 2:00 pm on April 15th to avoid us from attempting to protect you and filing an extension for you as a zero-balance due extension.
Once the extension is filed, we will then compete your returns in the order received or the order additional information is received after April 16th and if you owe on your return/s, then there will be penalties and interest that you are responsible for paying. There is no time when we are responsible for paying any penalties and interest due from someone owing on a return filed after the due date. We do, at times, tell people how much they owe on their returns at a given time, but we always say it is subject to change or even say based on what we see we will you might owe a certain amount, but we normally do not give any numbers at all. Those are still estimates that you can use to make your own decision since you are responsible for estimating the extension payment. We never can or do give real exact figures. This is your notice that any amounts due are estimates only and by signing this you are signing that you understand that and agree that any amounts given are estimates.
For taxes filed after the due date, we give no guarantees when those taxes can be completed other than to say if we get all of the information by the “Information Needed by” for the extension due date, which is normally 20 days prior to the extension due date, then we will have the return completed by the extension due date. Even if you are given a date that we expect the return to be finished by or that it is schedule on, that is not a guarantee that the return will be done at that time. If a client tells us, which happens often, that they need their return by a certain date for whatever reason they give us and we say we will attempt to get it by that date, there is still no guarantee that it will be done by that date. There are many factors that affect our ability to complete a return on a specific date, including the client’s ability to get us complete, correct, and usable information on time, natural disasters, power outages, a preparer getting sick, internet outages, software issues, IRS and/or State updates to taxes, law changes, and several other factors.
Extensions for Married Filing Separately or Marital Issues – If you are married filing separately then you must file an extension separately from your spouse. If you are not sure if you are going to file jointly and you do not have proof that your spouse filed an extension with your name and social security number on the extension, then we suggest you file your own extension.
Extensions for multiple types of returns and/or people – It is the client’s responsibility to inform us of each return that you want an extension for and for each person you want an extension for. Example 1: You call and request an extension of time to file you and your spouse’s individual tax return, but fail to tell us you need an extension for your child’s tax return. In this example, your child will not get an extension filed for them. Example 2: You call to tell us that you want an extension for your individual tax return, but fail to request an extension for your trust tax return. Your trust will not get an extension filed for it.
Extensions for Completed Returns - Upon completion of your tax return, you will be fully responsible for the timely filing of said returns. A return cannot be filed until it is paid for and, if e-filing the return, both you and (if married) your spouse must sign and date the e-file forms. If the return is being mailed, then again both you and (if married) your spouse must sign and date the returns prior to it being mailed. Once your taxes are completed, if you cannot pickup your return by the due of your return, then it is fully your responsibility to contact us by 10 am the day before April 15th and request an extension. Extensions require more work on a completed return than a return we are not finished with. You of course already know your liability, so again it is your responsibility to pay that amount by April 15th.
Tax Stance: We will use our judgment to resolve questions in your favor where the tax law is unclear or where there are conflicts between the taxing authorities' interpretation of the law and what seems to be other supportable filing positions. Your return is subject to review by taxing authorities. Any items resolved against you by the examining agent are subject to certain rights of appeal. In the event of an examination, we will be available to represent you at our normal billing rates for audits.
3rd Party - The IRS allows tax preparers as third-party designees, to communicate with them on behalf of their clients by indicating so on the face of the tax return. Unless instructed otherwise by you, we will answer affirmative to the question that allows us to communicate on your behalf with the IRS. If you do not wish us to by your 3rd party designee, you must inform us of that prior to us filing your return, by specifically asking us in writing to not be your 3rd party designee, if your request is made after the return is complete, you must also call the office and inform us that you have made that request in writing and that your return is complete. If you have already given us your e-file forms and paid for your taxes, you must also inform the person on the phone of that information, so they can attempt to stop the transmission. Once signed e-file forms and payment are received, your income taxes are filed, so that notification must come prior to us filing the return.
Intake & Worksheets - As part of our tax return process, we require each of our clients to do the Intake Form for the tax year we are preparing. We also request that certain clients fill out different worksheets depending on their specific tax circumstances. We use those forms to be more efficient and to help identify possible deductions that may potentially be overlooked. By signing below, you acknowledge that if you do not complete the intake accurately and/or requested worksheets, you understand that you could miss deductions, miss income not reported on W-2 or 1099 forms, or we could answer a question on your tax return incorrectly based on the incorrect information you provided. Also, we may require more time to prepare your tax return if we have missing information on the intake or worksheets. Submitting these worksheets will also help us minimize the cost of our services we provide to you and provide a more accurate return.
If you use our worksheets or your own version of our worksheets including but not limited to a summary of income & expenses, we will not necessarily go through your supporting documents. The exception is we need all tax forms like W-2, 1099-R, etc. We do not use summaries of information that is on a tax document, except 1099-NEC. Those numbers must be included in the profit and loss form for the business for income. A summary is all we require for businesses, rentals, and itemized deductions, though if you use our summaries, ours usually have much more information and can offer better benefits to clients if we were to know that information. We will, on occasion, go through your supporting documents if we feel we need to, but for most situations we do not go through that paperwork. By signing this agreement, you are stating you understand that we need summaries to be filled out correctly and completely.
Bookkeeping: Each client is required to have bookkeeping finished prior to having us complete their income taxes. However, many clients just throw receipts into their taxes and want us to add up or figure out what goes where. We will, on a rare occasion, do that for a client, however there are many issues with this. First, there is a fee starting at $100.00 for up to the first hour and then $100 per hour prorated in 15 minutes increments to add up receipts. Second, we do not do actual bookkeeping, but just add stuff up, using the best of our ability, to figure out what might be or might not be deductible. We make no warranties, guarantees, no do we take any responsibility for the accuracy of what we come up with. Receipts often times are unreadable or coded in a way we do not know what it is for and many times the returns are such a mess it is impossible to have any idea what goes where. Even if neatly organized in your opinion, that does not change the situation. Actual bookkeeping is what is needed to ensure a 100% accurate return and preparers can do what we can, but nothing replaces actual bookkeeping. Also, people put estimates that were never paid, duplicates, and bills that the insurance company paid a portion of, but we would not know that. Us adding up your receipts can either over inflate or understate your income or expenses. We always suggest either getting a bookkeeper to do it for you or using one of our worksheets to ensure accuracy. If we choose to do this service and you have us add up things, which we call bookkeeping only to have a category to bill it as, you are acknowledging that it is not actual bookkeeping and you take all responsibilities for what is on the return and hold Hampden Hills Tax Service, Inc. and its employees harmless of anything that is not categorized correctly, overstated, or understated. This is not a service we typically offer those, we normally require some time of totals page from each client.
If you pay Hampden Hills separately to do monthly bookkeeping for your business, then your bookkeeping falls under another engagement agreement and you do not have to worry about this section in reference to what you pay us for, but any part of your return you do not pay us to do monthly bookkeeping for would apply. Paying us for monthly bookkeeping separately under a bookkeeping agreement has to be for the year we are doing the return for and we do not start any new monthly bookkeeping accounts for any clients during the months of January - April.
We reserve the right, to require a worksheet to be filled out in order for us to prepare your taxes and to not attempt to charge a bookkeeping fee or do any adding up of receipts. We need to have something from each client as to what their income and expenses are and receipts do not really meet that requirement. We normally require a worksheet.
Gift Tax: We file gift tax returns for people who have gifted any individual or trust more than the yearly limit, which is the total of all gifts given over the course of the entire year. If you exceed that limit as set by the government, you are required to file a gift tax return. It is the responsibility of the client to inform us of any gifts that you have given over the yearly limit. For that limit, call and ask us each year what that amount is. There is an exception if you fund a revocable living trust, you do not have to file a gift tax on those amounts.
Basis Worksheets for Partners of Partnerships & shareholders of S-Corporations: We required a basis worksheet or a similar detailed computation of your basis in order to correctly file your K-1 forms on your income tax return. In terms of partner of partnerships, we require both inside basis and outside basis calculations in order to correctly file your income taxes. It is the ultimate responsibility of partners and shareholders to track their own basis. In saying that, partners and shareholders rarely will have any idea of how to track their basis, so we use basis worksheets from the accountant who did the partnership or S-Corporation tax return in order to have the closest basis figures. Many preparers do not know how to prepare the worksheets or they do not want to prepare. All professional income tax software that we are aware of has those worksheets in the program. If we prepare your S-Corporation or Partnership returns, we prepare, for informational purposes only, basis worksheets for our clients. We use the best information available to us to prepare those worksheets, but that does not mean they are 100% accurate. For partnerships, accountants only track inside basis on their worksheets, not outside basis. Getting the information from clients in order for us, or anyone else, to prepare a basis worksheet is very difficult and getting accurate information is even harder. In signing this agreement, you are acknowledging that we require basis or a basis worksheet/s in order to report your K-1 forms and if you provide your own basis, then you must show us how you came up with those figures and that they are accurate in order for us to use that figure. Some clients like to manipulate basis in order to give them a better tax advantage. Manipulating basis, in order to get a favorable tax benefit that you do not qualify for, is tax evasion and is illegal. We do not prepare taxes illegally here.
Forms Provided by Client: (Checks for Direct Deposit or Direct Debit) – We require for a direct debit or a direct deposit a voided check or an ACH Deposit Form. If you decided to use a voided check and provide one to us, we highly suggest and always request that you give us a voided check. Voided checks help provide protection for our clients. If you do not provide us a voided check, either because you only have one check and need that check to pay us or for any other reason and we scan in that check not marked voided, then you bear all responsibility for that check if something happens and it is some way is used fraudulently.
Flash Drives – We ask that you do not provide flash drives for your tax information, however we do have clients who provide them anyway. We take no responsibility over your flash drive or the contents of anything on that drive. You provide it to us at your own risk and you must have a backup of any information that is on that drive. Do not provide us information that is not backed up or stored somewhere else. We take every effort to ensure no malware is on our computers, however if malware makes it onto your drive, we are not responsible so we ask clients to not provide flash drives in the first place. Flash drives are not part of our business model and if you provide them, it is totally at your own expense and assume all risk over the drive if anything happens to it. It is also very easy for those to get misplaced or forgotten about and if it is misplaced, we only provide a credit on your tax fee of $10.00 if we have proof that we were given the drive. We do not replace the drive. $10 is the maximum credit we will provide on your bill.
Estimated Taxes: We only file estimated taxes if a client request for us to do so. There is a charge to prepare, figure out, and/or print estimated tax vouchers and for those who pay online or by direct debit, there is still a fee for us to calculate and do everything. When we estimate taxes, it is an estimate based on information we have at that moment from the client, using the tax laws in that moment of time as released by IRS. When tax bills pass, it takes IRS several weeks to figure out how that will work on the actual tax form. Some tax changes are in the moment, some are handled at different levels, but until that guidance comes out from IRS, we do not base what we do on those bills that pass. We do not guarantee we will hit it 100% on the mark, due to multiple factors that are either unknown or can change. As a general rule, our goal is to get a client to owe zero on their return, but that also means no refund. This is not necessarily what would need to be paid to get you out of a penalty. In cases where income is high, IRS and/or the states can raise the threshold on penalty calculation from 90% to 110%. We do not figure estimated taxes based on penalty, unless a client request for us to do so. We only figure estimated taxes based on getting the bottom line to zero. In the past, we would use the 110% calculation method, but it upset most clients and caused a lot of issues. When we changed, 99% of our clients preferred using the zero bottom line method and they were much happier after that change. Now a client must request for us to use the higher method if that is what they want. Additionally, penalties can come if you did not pay for the tax in the quarter owed, which we cannot always get around if you failed to file in a previous quarter. We do try different methods to see if we can get you out of the penalty when we filed your income taxes, but we cannot always get around the penalty in reference to estimated taxes. This is your notification of these situations.
We have different ways we handle estimated taxes: The first method is we figure them on your income taxes, based on the return we prepared in the current filing tax year with us just asking if income, deductions, and credits will remain the same next year. The second method is we figure them quarterly by clients bringing in their information to us on the first few days of the month that the estimated tax is due. Quarterly is the most accurate way to handle your estimated taxes.
When it comes to quarterly filing of estimated taxes, we again have different ways we handle the estimated taxes. We can use the total method (based on all income, deductions, and credits), which about 25% of our clients want, which is based on the tax return as a whole or we can use the method most clients want, which is to only do estimates on one particular aspect like their return like for a business, rental, or sale of an asset. The most accurate way is to do estimated taxes is to use the total method by using all income, deductions, and credits, but clients must give us the information in order for us to do it that way and most clients choose not to. There are also other methods that we sometimes try to help make it more accurate, if we cannot use the total method.
No matter what is chosen, there is no guarantee we will be able to get your taxes to zero. If we use the method of only calculating taxes on one particular aspect of your return, we do not figure in the effect of other items on the return other than to use whatever tax bracket you were in on your previous return, which can change the calculation. For businesses, rentals, and farms, we must have a profit and loss in order to do your estimated tax payments. We do not do bookkeeping in order to prepare estimated taxes, unless you pay for our monthly bookkeeping service, which is covered under another engagement agreement. If you have a business, the Profit & Loss statement either needs to be Year-to-Date through end of month of estimated taxes. Starting in 2026, we will not total all quarters together. Example: It is quarter 3, then we need Profit & Loss Statement to lists totals from January 1 – August 31. We only allot a limited amount of time for a preparer to prepare an estimated tax. Profit and Loss statements need to be available in the quarter you drop off. This way we can keep our fees low for our clients.
Withholding Changes: When we give advice to our clients on changes to withholding it is only based on the information we have at that moment. Also, we make that estimation to where a client should be on a regular basis, not necessarily to make sure the very next return they break even. Changes are normally figured as though, if this change was made the entire year, it would put you at the break-even point, unless a client asks us to make sure they get a refund. Our figures are always an estimation, not an exact amount to break even and are not guaranteed. Most clients can only afford the method we use here and usually no changes are made if we give them the figure to get the very next tax to zero, but then they will overpay for any future tax. If you want to use the method where you will not owe on the very next tax, you must tell us to calculate that for you, though we do tell you when talk to you it is not based on the next tax, but in general where you need to be.
Depreciation, 179 Deduction, Bonus, and Recapture: For Sole Proprietors, Single-Member LLCs, Farms, and Rentals, they must deprecate the assets they purchase. There are some exceptions, if we know about your assets when we prepare your return, we can take in some situations, but for the most part assets must be depreciated, which means the expense is taken over a period of years.
IRS has rules to accelerate those deductions in things like Bonus depreciation and a 179 deduction. It is not always in the best interest of the client to take either of these options. Also taking these options can create issues sometimes on the state return. If it does create issues, it will increase the cost of your return to take these options for not just this year, but in multiple years ahead as well since this will create an ongoing issue for the entire life of the asset. If you sell the asset, prior to the allotted useful life or if business use falls below 50%, this can generate recapture of the expenses taken in bonus and/or 179 deductions. Many clients do not keep the asset for the useful life of the asset so we take that into consideration in our decisions.
Preparers generally do what they feel is the best for the client in terms of deprecation. What we do might change in any given year. If a client wants a desired benefit in this section, it is the responsibility of the client to tell us in advance of your desire. It is also the responsibility of the client to inform us and any asset purchases, trades, sales, or if business use falls below 50%. We do not normally ask the client about the methods of depreciation or elections that we take so if that is your desire, you must inform us of that prior to us starting your taxes. If we make the decision to take one of these methods and it increases the cost of your return, the price is not a consideration for us in our decision of what to take. We take what we feel is in the best interest of our clients. Most preparers are not even aware that there is a price difference since they just concentrate on the final price of the return. Preparers and staff only know the price of common forms, not the price of every form or item since there are over 1,500 tax forms in the software.
Text Notifications: - When you provide us with your phone numbers, there may be times we send text notifications to you, including but not limited to: appointment reminders and important due dates. We will not send marketing communications via text messaging. By signing below, you agree to allow us to send text notifications to you. This is not a guarantee that you will receive a text message.
Law Changes: Congress can change the law at any time and make it retroactive to the beginning of any current or prior year. After a law passes, IRS then has to apply the law and that application of the law can look very different than people think, what we hear on the news, or what politicians say. A change in the law may mean you have to amend your current or prior returns or redo a return that has been finished, but not filed yet. We charge to amend returns since it is a completely new return, but if we prepared the original return, we charge at a discounted rate. We also charge to redo a return. Congress is constantly talking about law changes, but until it is law, we do not use or calculate it into the taxes, nor do we delay finishing a return. Something is not a law until it passes both houses of congress and the President signs it. The final versions of bills are normally very different than what the news media or politicians say, because of that, accountants would never finish taxes if we waited on laws to pass. We finish taxes as the law is on that day. If the law changes the next day, the return will have to be redone if not picked up or amended once filed.
Court rules can also affect how laws are implemented, interpreted, or rule that a law in un-constitutional. Courts can also strike down certain parts of laws. We do not get notified when court cases conclude or the results of that ruling. If reported in the news, we might not read a particular news article(s) that may or may not report the rulings of various cases. We do get updates on some cases each year, but again, we do not get notified or even know about every case. Since we are not attorneys, we do not base our actions on court cases, unless they are known by us in advance and we are able to implement them. Lastly, if we have charged for a return, service, or anything that was required by law and then ruled un-constitutional, there is no refund since our fees are based upon information at that time. If something is ruled un-constitutional it will normally be challenged by going to appeal or the supreme court. We only base our actions on what the taxing authorities instruct us to do, unless we have something with substantial authority that we could use to alter what those instructions tell us to do.
Fees: Fees for our services will be based on forms that are on the return, how many forms we have to input into the software, and on the amount of time required to prepare the returns, at our normal billing rates, plus any out-of-pocket expenses. Our fees are non-refundable. Our form fees are subject to change from year to year. If we have given you an estimate, the estimate is an average based on what you have told us you would have. The final amount might be higher or lower than quoted. Payment for taxes and/or services is due when work is completed by HHTS, regardless of an extension being filed. Payment is also due when work has been done, but has not been completed, through no fault of HHTS, and/or we have not had contact with you for 60 days. If you want us to try and take our fees from the refund and we allow that service, there is no guarantee that we will be able to take any/all of the fees from the refund. If we are unable to take all or part of our fees from the refund, then you are responsible for paying the balance. Taking fees from your refund is an extra cost.
Once we start a return, if you choose to not have us complete the return, we still charge for what we have done and our time. Our minimum charge in this situation is $150.
Our fees are due, regardless of your opinion of the results of the tax return. Our job is the file taxes and file them correctly. Those results may be positive or negative, but in either capacity we must apply the law, even if that law is not something you agree with. If you want to challenge the results of the tax, we need a written copy of the law that you are applying against how we did the return. If you want to tell us how someone else did their return or even show us how another firm did a return you can, but that does not make the return correct. We do not prepare returns based on how someone else or another firm did a return, but how the law requires us to prepare a return. We do not lie on the tax, leave off income, or inflate expenses. You telling us to just forget that we heard it is not something we are going to do. We file taxes legally here and with integrity.
If you take your taxes to someone else and they tell you the tax was incorrect, we do not give refunds. They must give us, in writing, the law that they are applying that says the return is wrong. If they can and the return is wrong, we will fix it free of charge. We do not pay other preparers to do or fix returns, nor do we refund money paid. If we have filed your return and the return is proven to be wrong and it is our fault, then we will file an amended return for you free of charge. We again, do not pay other firms to prepare taxes for our clients or give refunds. However, if the error was not the fault of our company, then we do charge for the amended return to correct your return.
If your taxes are being handled via mail or our portal, then we will send your e-file forms to you with our fee for our services. Once we receive your e-file forms and payment, we will send your completed copy of the tax return and any original documents back to you. If you put copies of your documents in the portal, we do not return those, since they are copies. We cannot e-file your taxes with a payment due to HHTS. If you handling everything via mail, we will send you our invoice once the tax is completed with your e-file forms. Once payment is received, we will send your taxes and your copy to you. Since we cannot mark a mailed return complete without payment, we keep your documents and return until your payment comes in, which helps us to ensure your return is not missed being marked completed, which is an important step.
Filers Below the Filing Threshold: We file taxes for everyone who has an appointment or who drops off. It is our policy that if you want to know if you have to file, that you not make an appointment or drop off, but instead bring your paperwork and wait for a preparer to check it to see if you are required to file. If you make an appointment or drop off, we prepare your taxes without even seeing if you have to file since you have indicated you want us to file a return by making an appointment or dropping off your taxes. We usually do not know a client is below the filing requirement, until the tax is complete. We have many people who are below the filing requirement, but who wish to file a return anyway. As of the writing of this, we have about 50 clients who file every year even though they are not required to since it makes them feel better. In these situations, we prepare your return, file your return, and then will tell you about next year if you do not want to file to not make an appointment or drop off. If a client makes an appointment or drops off, they or their responsible party are responsible for the cost of the return. There are many reasons to file a return, even if below the filing requirement and not filing can harm some taxpayers if they are required to file in the future.
In October 2025, there is a change to the guidance on filing returns for clients who are below the filing requirement. It is now suggested that everyone file a return, even if below the filing requirement, due to the extreme fraud in our society. Filing a return protects you in many ways, including from fraud. Starting October 2025, we now suggest everyone file a return once they are over 18 and working or receiving income.
Deceased person on return: IRS and HHTS highly suggest that you file a final return when someone passes away. The fraud on taxes for deceased people is extreme. Not filing can keep the estate open for many years as you battle with IRS to say you are not the one who got the large refund.
Our fees do not include handling of audits for our customers, which are an additional charge.
If your return is e-filed and rejected and required to be mailed into the IRS or the State, there is an additional charge for extra forms that are required when a return must be mailed and to handle the mailed in return including printing and time to redo return to change it to a mailed return. In addition, if the rejection is due to additional information needed by the client, additional fees are charged to change the return for that and we charge for any new forms required as a result of those changes.
By signing below, you agree that you are personally responsible for any and all payments due to Hampden Hills Tax Service, Inc. for services provided for you. If you are signing for a person you represent or for a deceased person, because you are a P.O.A., conservator, Executor, Administrator, or Personal Representative, then if they or the estate does not pay our fees, then you are personally signing that you will pay those fees, since you requested the tax return to be prepared by us.
Prepayments: For customers going out of business or terminating trust and estate accounts, they must prepay for their income taxes or risk having to pay the fee for the income taxes out of their personal funds. We offer this service for clients under the following conditions.
The fee covers the following year’s income tax under the assumption that it will be filed the following year while IRS E-File window is open. If you do not file the following year, but instead have us prepare the income tax in any additional year, we will apply the payment to the return, but you may owe more due to possible changes in fees. There also additional fees if you chose to file, in any year, during the time IRS E-File Window is closed, which is approximately between November and January, though it can be anytime IRS determines. The prepaid fee covers returns based on what you have told us that you will have on your return, but if you fail to tell us forms or things that change your price more than $50.00, we give as a protection window, then you owe the difference. The $50.00 protection window does not apply to taxes filed outside of the e-file window or in a different year, since those changes are not covered by the protection window.
Fee Deposits: For people who are filing more than one year at a time, have had payment issues with us in the past, or who we know are having money issues, we get a deposit toward our final fees. The deposit is an estimate only and the final fee can be higher or lower than the estimate. For multi-year filers, we apply the deposit to the returns completed first and then move the remaining balance to the next return year. For most people, there is a balance due to us for our fees once we complete all the returns since we normally only get a percentage of the total estimate, but in some cases, we required a full deposit. The percentage of the deposit required is completely at the discretion of the preparer, but there is a minimum requirement that the preparer cannot go under. No work is started until the deposit requirements are met and no extensions are filed in this case either until those deposit requirements are met.