Tax Preparation Q&A Videos

We use several different forms to ensure we’re providing quality service in prepare your tax return. Below are a series of videos giving a brief overview of the forms that we receive the most questions about so that you have an idea of what each one is and how to use it.

After viewing the videos below if you have further questions please contact our office.

Tax Packet Questionnaire
Client Organizer Checklist
Extension Request
Partnership Opt Out Audit Rules
Completing Tax Packets via RightSignature
How to Request Your IRS 2021 Account Transcript
IRS Online Account


Tax Packet Questionnaire

We use this questionnaire to identify what needs to be reported on your tax return, and what might benefit you on your tax return.



Client Organizer Checklist

We provide this checklist so you can double check you’re providing complete information for your tax preparation.



Extension Request

Please see our full page on Extension Requests


Partnership Opt Out Audit Rules

Every year a Partnership (1065 tax return) has an option to opt out of the audit rules. This video explains that option.



Completing Tax Packets via RightSignature

  1. You will receive an email from with a link to sign the tax packet and complete the questionnaire digitally.
  2. You must complete all the required signature, date and questionnaire boxes and select “Submit Signature” before we will be notified that the document is complete.
  3. If there is more than one signer, each person has an email with their unique link to sign. Only one person in a couple is assigned the questionnaire but you both need to sign the engagement letter portion. We will not be notified that the document is complete until BOTH people have signed.
  4. You can save your progress and come back to the document later if needed.


How to Request Your IRS 2021 Account Transcript

We are requiring verification of your stimulus payment amounts, estimated tax payments and any advance child tax credits received for tax year 2021. The easiest way to provide this information is with an account transcript from the IRS.

IMPORTANT NOTE: If you are Married Filing Jointly, it needs to be the TAXPAYER that creates the online account or requests the transcript by mail. The SPOUSE Account Transcript will not have the information that we need!


  • Requires Identity Verification that can be challenging for some individuals
  • Provides immediate access to multiple transcript options and much more information


  • Very quick to request
  • Takes 1-2 weeks to receive in the mail
  • Will be sent to the address the IRS has on record from your last tax filing



IRS Online Account

Your IRS online account is a valuable tool for accessing information on your tax records, payments and balances due. We strongly encourage you to create an online account:

Presidential Election Campaign Fund

Siobhan Murphy, CPA, explains what the $3 to the presidential election option is on your tax return (and tax preparation questionnaire)

Completing Tax Packets via RightSignature

  1. You will receive an email from with a link to sign the tax packet and complete the questionnaire digitally.
  2. You must complete all the required signature, date and questionnaire boxes and select “Submit Signature” before we will be notified that the document is complete.
  3. If there is more than one signer, each person has an email with their unique link to sign. Only one person in a couple is assigned the questionnaire but you both need to sign the engagement letter portion. We will not be notified that the document is complete until BOTH people have signed.
  4. You can save your progress and come back to the document later if needed.



We are requiring verification of your stimulus payment amounts, estimated tax payments and any advance child tax credits received for tax year 2021. The easiest way to provide this information is with an account transcript from the IRS.

IMPORTANT NOTE: If you are Married Filing Jointly, it needs to be the TAXPAYER that creates the online account or requests the transcript by mail. The SPOUSE Account Transcript will not have the information that we need!


  • Requires Identity Verification that can be challenging for some individuals
  • Provides immediate access to multiple transcript options and much more information


  • Very quick to request
  • Takes 1-2 weeks to receive in the mail
  • Will be sent to the address the IRS has on record from your last tax filing

Employee Retention Credit – Important Updates

On August 4th, the IRS released Notice 2021-49 regarding the Employee Retention Credit (ERC).  This notice includes some very important updates to how the IRS is interpreting the rules of the ERC and includes some complete changes from guidance they released previously.

Here are some of the critical points (please note this is not comprehensive).

Does the company qualify?

First, the company must qualify for the ERC – either because of government shut down or significant decrease in income.  The rules for qualifying for the credit are different for 2020 vs. 2021, so be careful in determining if you are eligible or not.

Previously the IRS indicated that the only way to measure income for this credit was based on cash receipts from customers.  More recent guidance instructs to measure based on either cash basis income or accrual basis income, whichever is used on the federal income tax return.  If you are an accrual basis reporter for your tax return, I recommend you check your income and qualification again, as it may be different than initially indicated based on cash.

Also, pay attention to the infrastructure legislation that is in process, but not yet passed.  It currently includes an update to the ERC to discontinue it as of 9/30/21 instead of 12/31/21 for most employers.  We’ll have to wait and see if this goes through or not.

What wages qualify?

Second, only certain wages qualify for the credit.  Again, the rules are different for 2020, 2021, and for businesses that started after 2/15/20.

Previously the IRS indicated that business owners receiving wages could qualify for the ERC.  The updated notice changes this position.  Wages paid to majority owner (those owning over 50% of the company) cannot be included in the ERC.  The same is true for their family members (with a few very specific exceptions for spouses if the business owner has no living relatives).

For owners who own 50% or less of the company, the IRS uses very complex “related parties” rules to determine if their wages or wages of their family members are included.  If this is you, I strongly recommend working with a qualified payroll accountant to verify which wages do or do not qualify.

You cannot use the same wages for the PPP loan forgiveness and the ERC – maximizing these relief options can take some careful analysis and planning.

How do I fix it if I did it wrong?

If you claimed the credit under prior guidance and you no longer qualify based on these updated rules, you will need to file a form 941-X (amended 941) to remove/reduce the credit and show additional tax due.  Head’s up – the IRS will likely assess late payment penalties!  You can request that the penalties be removed for “reasonable cause” – that reasonable cause being that you filed prior to Notice 2021-49 in which the rules changed.

Where’s my ERC refund?

If you are just now seeing that you are eligible, you can file a form 941-X to claim the credit and obtain a refund from the IRS.  Or maybe you have already filed the 941-X and you’re wondering when the check will show up.  It will take a very long time for them to process it, so don’t hold your breath!  The IRS currently has 1.8 million payroll tax returns filed on paper backlogged and waiting to be processed.  We have no information about how long it will take them to get through them all.

I’m starting a business… Now what? 


You know when you’re venturing into new territory… it’s exciting and a little bit scary!  You have an idea or a vision, but you don’t really know what you don’t know.

Over the last decade, I have talked with many new business owners and the same core questions and topics come up around accounting & taxes.  So, I’ve taken the same 10 minutes of key information I’ve been offering in free consultations and put it into this video.

Folks seeking this information used to have to wait 2-3 months for my schedule to have the availability to meet with them one on one to provide this information.  But no more!  I don’t want you to have to wait and I know you need the info now!

This is a big picture overview, and of course, there are lots of other details to getting started in a new business.  So, I also created a series of online courses to teach all of the core accounting & tax basics that you need to know as a new business owner.

I hope you find these resources useful, and good luck with your new business!


Check out our more comprehensive online courses here:  Thrive Education Services


Terms and Conditions Addendum

[updated 12/16/2021]


This addendum to the engagement letter describes our standard terms and conditions (“Terms and Conditions”) related to our provision of services to you. This addendum, and the accompanying engagement letter, comprise your agreement with us (“Agreement”).

For the purposes of this Terms and Conditions Addendum, any reference to “firm,” “we,” “us,” or “our” is a reference to Cascade Small Business Associates LLC dba Thrive Business Group, and any reference to “you,” or “your” is a reference to the party or parties that have engaged us to provide services. References to “Agreement” mean the engagement letter or other written document describing the scope of services, any other attachments incorporated therein, and this Terms and Conditions Addendum.


As a condition of our performing services, you agree to:

  • provide all required information and documents as requested to provide the services
  • separate personal vs. business or rental expenses
  • determine if your workers are employees or independent contractors
  • maintain adequate funds in any accounts from which you authorize us to make payments
  • keep all back up documentation for 7 years
  • make all management decisions and perform all management functions
  • evaluate the adequacy and results of the services performed and accept ultimate responsibility for the results of the services
  • accept that we do not verify or audit the data or documents you provide; we do not look for data errors, fraud, or theft
  • establish and maintain internal controls over the bookkeeping and payroll processes, including but not limited to, controls related to accuracy, privacy and security of employee information, social security numbers, salary and wage records; reconciliation of payroll bank accounts; and monitoring of ongoing bookkeeping and payroll-related activities

CLIENT RESPONSIBILITIES – General (all services)

Complete and Accurate Information

Our services will be performed based upon information you provide to us.  We will perform our services under the assumption that all information you submit is true, complete and accurate according to documents and other information retained in your files.  We will not verify or audit this information.

Our engagement does not include any procedures designed to detect errors, fraud, or theft. Therefore, our engagement cannot be relied upon to disclose such matters.  In addition, we have no responsibility to identify and communicate deficiencies or material weaknesses in your internal control system as part of this engagement.

You represent that the information you are supplying is truthful, accurate and complete to the best of your knowledge and that you have truthfully disclosed to us all income, financial data, and other relevant facts affecting the services provided.  You represent that you have reported all income you received including barter and crypto-currency transactions.  You further represent that you have provided us true, correct and complete information regarding amounts you claimed as expense/tax deductions.

To the extent you provide our firm with access to electronic data via a local or online database from which we will download your financial or other information, you agree that the data is accurate as of the date you and time you authorize it to be downloaded.  You will contact us immediately if you discover additional information that will lead to a change, or if you receive any letters from the IRS, state or local taxing authorities.

Use of Deliverables

Bookkeeping, Accounting, Payroll, and Consulting service deliverables are solely for internal use.  Tax returns prepared are solely for filing with the Internal Revenue Service (“IRS”) and state and local tax authorities.

We will not prepare your financial statements, nor will we perform an audit, review, or compilation of your financial statements, and no accountant’s report will be prepared or submitted.  The financial reports provided as part of this engagement are for internal use only.

Our work is not intended to benefit or influence any third party, either to obtain credit or for any other purpose.  As a result, you agree to indemnify and hold our firm and its partners, principals, shareholders, officers, directors, members, employees, agents or assigns (collectively, “firm,” “we,” “us,” or “our”) harmless with respect to any and all claims arising from the use of any of our work products for any purpose other than the intended purpose, regardless of the nature of the claim, including the negligence of any party.

Professional Advice

You agree that you are not and will not be entitled to rely on any advice given to you by us unless provided in writing.  Our tax projections and related advice are based upon facts, assumptions, and representations as stated as well as relevant tax reference materials that are subject to change. We will not update our projections or opinions for subsequent changes to tax law or reference materials, unless specifically requested by you in writing for a specific change or update.

You understand and agree that our services may include advice and recommendations, but that all decisions in connection with implementation of the advice and recommendations are solely your responsibility.

Personal expenses

You are responsible for ensuring that personal expenses, if any, are segregated from business or rental property expenses and that expenses such as meals, travel, vehicle use, gifts, and related expenses are supported by necessary records required by the IRS and other taxing authorities.


You are responsible for maintaining adequate documentation to substantiate the accuracy and completeness of your accounting data and tax returns. You should retain all documents that provide evidence and support for reported income, credits, and deductions, as required under applicable tax law and regulations. You are responsible for the adequacy of all information provided in such documents. You represent that you have such documentation and can produce it, if needed, to respond to any audit or inquiry by taxing authorities. You agree to hold us harmless with respect to any additional taxes, penalties, or interest imposed on you by taxing authorities resulting from the disallowance of tax deductions due to inadequate documentation.

State and local filing obligations

You are responsible for determining your tax filing obligations with any state or local tax authorities, including, but not limited to income, franchise, sales, use, property or unclaimed property taxes. You agree that we have no responsibility to research these obligations or to inform you of them. If upon review of the information you have provided us and other information that comes to our attention, we believe you may have an obligation to file additional tax returns, we will notify you of this responsibility in writing.

CLIENT RESPONSIBILITIES – for Business Owners (all services)

Worker classification

You acknowledge and confirm that you are responsible for determining the correctness of any worker classification, including consulting with an employment law attorney as needed. We recommend obtaining a Form W-9, Request for Taxpayer Identification Number and Certification, signed by any independent contractor, as well as a signed contract with any independent contractor. You should also issue a Form 1099-NEC to all unincorporated independent contractors to whom you pay $600 or more for services.

Employment records

You are responsible for obtaining Form I-9, Employment Eligibility Verification Form, from each new employee at the time of employment. In addition, Federal Form W-4, Employee’s Withholding Allowance Certificate, and the applicable state equivalent should be retained for all employees. Failure to obtain these forms may subject an employer to penalties.

Sales tax filing obligations

New state laws regarding the collection of sales tax by online sellers require separate registration, collection, filing and payment with many states at very low activity levels.  We are not engaged to, nor do we, determine whether individual state sales tax rules apply to your business.  Determination of whether an individual states’ sales tax rules apply to your activity are your responsibility.  Failure to register and file with an appropriate state may expose you to severe penalties.

Our services are not intended to determine whether you have filing requirements in taxing jurisdictions other than Washington state (“WA”) and City of Bellingham (“COB”). If you have taxable activity in a state/city other than WA/COB, you are responsible for providing our firm with all information necessary to prepare any additional applicable state(s) or local tax returns, as well as informing us of the applicable states/cities.

Processing of Tax Payments

You agree and hereby give written pre-approval for B&O tax payments to be made at the scheduled due date. Further, you agree and give written pre-approval for payroll tax payments, including employee payments, to be made automatically at the same time as paychecks are processed and/or at the scheduled due date.

Changes in ownership

You are responsible for advising us of any changes in ownership so we can properly reflect those on the tax return(s).

We recommend that you review your buy-sell agreement, other stock agreements, partnership agreements, or LLC agreements, with your attorney to ensure these documents meet your goals for the transfer of corporate stock.

Partnership or LLC agreement

You should review your partnership (or LLC) agreement with your attorney to ensure that it meets your goals for the transfer of ownership and distribution of income. Often, partnership agreements do not address the transfer of ownership or may require updating as circumstances change. You acknowledge and confirm that it is your responsibility to review your partnership or LLC agreement with your attorney.

Allocation of partnership income and expenses

You are responsible for verifying the accuracy of both the allocation of partnership income per the terms of the partnership agreement and the partnership income calculations used in the preparation of the tax returns.

Salaries and wages for corporation shareholders

We may provide advice and recommendations to assist you in determining an appropriate and reasonable salary or wage to pay shareholder employees. However, you are responsible for determining the appropriate salary or wage to pay shareholder-employees and ensuring this compensation is paid in accordance with employment regulations. If the IRS determines that the S corporation made distributions in lieu of an appropriate shareholder salary or wage, the IRS may reclassify the payments. As a result of the reclassification, the shareholder and / or corporation may be responsible for assessed taxes, penalties and interest, on the reclassified amounts.

Future Social Security benefits

When a self-employed taxpayer reduces taxable income through tax deductions and/or a shareholder-employee receives a lower salary or wage, there is also a reduction in earned income reported to the Social Security Administration, which could reduce current and future benefits for the business owner and his or her dependents.

You acknowledge and agree to the current salary or wage and/or tax deductions and also acknowledge and agree to the potential negative effects on future social security benefits for each business owner, spouse, and any dependents.

Management responsibilities

You are responsible for management decisions and functions. We will not perform management functions or make management decisions for you.  Our firm, in its sole professional judgment, reserves the right to refuse to take any action that may be construed as making management decisions or performing management functions.  However, we may provide advice, research materials, and recommendations to assist your management in performing its functions and making decisions within the scope of this engagement.

You are responsible for evaluating the adequacy and results of the services performed and accepting responsibility for such services. You are ultimately responsible for establishing and maintaining internal controls, including monitoring ongoing activities.

Ultimate Responsibility

You agree that you and your employees are ultimately responsible for the proper recording of transactions in the records, the safekeeping of assets, and the accuracy of your financial statements.

You acknowledge that, while our firm will maintain the books and records of the company utilizing accounting software, it is your responsibility to monitor all bookkeeping entries for proper recording and accuracy through your access to the accounting software or provided reports.


Extensions of Time to File Tax Returns

Due to the high volume of tax returns prepared by our firm, the information needed to complete the tax returns must be received no later than our firm’s intake deadline (established and communicated annually) so that the returns may be completed by the original filing due dates. It may become necessary to apply for an extension of the filing deadline and/or charge a rush processing surcharge if there are unresolved tax issues or delays in processing, or if we do not receive all of the necessary information from you on a timely basis. Applying for an extension of time to file may extend the time available for a government agency to undertake an audit of your return or may extend the statute of limitations to file a legal action. An extension is an extension in time to file only, not an extension of time to pay the tax you owe. All taxes owed are due by the original filing due date. Additionally, extensions may affect your liability for penalties and interest or compliance with government or other deadlines.

To the extent you wish to engage our firm to apply for extensions of time to file tax returns on your behalf, you must notify us of this request in writing. Our firm will not file these applications unless we receive your express written authorization to file for extension. An extension requires reporting estimated tax liability, payments, and balance due.  We will request this data from you or you may request in writing that we use the prior year’s data for these estimates. You have sole responsibility to pay any estimated tax due by the original filing deadline.  Failure to timely file for an extension of time to file can result in penalties for failure to file tax returns, which accrue from the original due date of the returns, and can be substantial.

Penalties and Interest Charges

Federal, state, and local taxing authorities impose various penalties and interest charges for non-compliance with tax law, including, for example, failure to file or late filing of returns, and underpayment of taxes. You, as the taxpayer, remain responsible for the payment of all taxes, penalties, and interest charges imposed by taxing authorities.

We rely on the accuracy and completeness of the information you provide to us in connection with the preparation of your tax returns. Failure to disclose or inadequate disclosure of income or tax information may result in the imposition of penalties and interest charges.

Estimated Tax Payments

You may be required to make quarterly estimated tax payments. We will calculate these payments for the next tax year based upon the information you provide to prepare your prior year tax returns and have no obligation to update recommended payments after the tax return is completed.

Virtual currency

The IRS considers virtual currency (e.g. Bitcoin) as property for U.S. federal income tax purposes. As such, any transaction in, or transactions that use, virtual currency are subject to the same general tax principles that apply to other property transactions.

If you had virtual currency activity during the tax year, you may be subject to tax consequences associated with such transactions and may have additional reporting obligations.  You agree to provide us with complete and accurate information regarding any transactions in, or transactions that have used, virtual currency during the applicable tax year.

Government inquiries

This engagement does not include responding to inquiries by any governmental agency or tax authority. If your tax return is selected for examination or audit, you may request our assistance in responding to such inquiry. If you ask us to represent you, we will confirm this representation in an engagement letter addendum and delineate how additional charges for this service will be calculated.

U.S. filing obligations related to foreign financial assets

As part of your filing obligations, you are required to report the maximum value of specified foreign financial assets, which include financial accounts with foreign institutions and certain other foreign non-account investment assets that exceed certain thresholds. You are responsible for informing us of all foreign financial assets, so we may properly advise you regarding your tax filing obligations.

These assets include any ownership interests you directly or indirectly hold in businesses located in a foreign country, and any assets or financial accounts located in a foreign country over which you have signatory authority.  Please note that any person or entity subject to the jurisdiction of the United States (including individuals, corporations, partnerships, trusts, and estates) having a financial interest in, or signature or other authority over, bank accounts, securities, or other financial accounts having an aggregate value exceeding $10,000 at any time, in a foreign country, shall report such a relationship. Although there are some limited exceptions, filing requirements also apply to taxpayers that have direct or indirect control over a foreign or domestic entity with foreign financial accounts, even if the taxpayer does not have foreign account(s).

If you and/or your entity have a financial interest in any foreign accounts, you may also be responsible for filing Form FinCen 114 (“FBAR”) required by the US Department of the Treasury on or before April 15th of each tax year. The FBAR is not a tax return and its preparation is not within the scope of this engagement. Failure to disclose the required information to the US Department of the Treasury may result in substantial civil and/or criminal penalties.

The Internal Revenue Service requires similar information reporting with higher balance thresholds.  If you hold foreign financial assets with an aggregate value exceeding $50,000, you may be required to file Form 8938 (or related) with your tax return. You agree to provide us with the information necessary to prepare the appropriate tax forms when applicable. We assume no liability for penalties associated with the failure to file or untimely filing of any of these forms.

Foreign filing obligations

You are responsible for complying with tax filing requirements of any other country. You acknowledge and agree that we have no responsibility to raise these issues with you and that foreign filing obligations are not within the scope of this engagement.

Gifts received from foreign persons

If you received a gift or bequest from a foreign person or trust, you may be required to file a separate IRS Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, or 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner.  If you ask us to prepare this return, we will confirm this in writing.

S-Corporation, Partnership, Estate, Trust Schedule K-1 Distributions

You are responsible for distributing a copy of the schedule K-1s to each shareholder, partner, LLC member, or beneficiary.

Tax-Exempt Organization Unrelated business taxable income 

If your tax-exempt organization produces revenue from a trade or business activity not directly related to its tax-exempt purpose, it may have unrelated business taxable income that must be reported separately from other income. You are responsible for informing us of any potential unrelated business taxable income.

Other responsibilities of not-for-profit organizations

As a non-profit organization, you are subject to additional obligations including but not limited to:

  • Maintaining state registrations related to solicitations with state charitable divisions;
  • Meeting the public support test; and
  • Maintaining non-profit status by timely filing tax returns.

You acknowledge that these are solely your responsibilities.  If you would like assistance in understanding your responsibilities, and we agree to provide it, we will confirm this engagement in a separate Agreement.

Ultimate Responsibility

You have final responsibility for your income tax returns. We will provide you with a copy of your electronic income tax returns and accompanying schedules and statements for review prior to filing with the IRS and state taxing authorities (as applicable). You agree to review and examine them carefully for accuracy and completeness.

You will be required to verify and sign a completed Form 8879, IRS e-file Signature Authorization, and applicable State equivalent authorization forms before your returns can be filed electronically.


Billing and Payment Terms

Fixed fee services are paid in advance by direct debit from the account you designate. Fees for hourly and other services are due within 10 days of the invoice date. Balances over 30 days are subject to 1% per month late payment fee.

We reserve the right to suspend or terminate our work for non-payment of fees. If our work is suspended or terminated, you agree that we will not be responsible for your failure to meet governmental and other deadlines, for any penalties or interest that may be assessed against you resulting from your failure to meet such deadlines, and for any other damages (including but not limited to consequential, indirect, lost profits, or punitive damages) incurred as a result of the suspension or termination of our services.

Limitations on Oral Communications

We may discuss with you our views regarding the treatment of certain items or decisions you may face. Any advice or information delivered orally will be based upon limited research and a limited discussion and analysis of the underlying facts. Additional research or a more complete review of the facts may affect our analysis and conclusions.

Due to these limitations and the related risks, it may or may not be appropriate to proceed with any decision solely on the basis of any oral communication. You accept all responsibility, except to the extent caused by the gross negligence or willful misconduct of Thrive Business Group, for any loss, cost or expense resulting from your decision (i) not to have us perform the research and analysis necessary to reach a more definitive conclusion and (ii) to instead rely on an oral communication.

Electronic Data Communication and Storage

In the interest of facilitating our services to you, we may send data over the Internet, or store electronic data via computer software applications hosted remotely on the Internet or clouds. Your confidential electronic data may be transmitted or stored using these methods. We may use third party service providers to store or transmit this data, such as providers of tax return preparation software. In using these data communication and storage methods, our firm employs measures designed to maintain data security. We use reasonable efforts to keep such communications and data access secure in accordance with our obligations under applicable laws, regulations, and professional standards. We require our third-party vendors to do the same.

You recognize and accept that we have no control over the unauthorized interception or breach of any communications or data once it has been sent or has been subject to unauthorized access, notwithstanding all reasonable security measures employed by us or our third-party vendors. You consent to our use of these electronic devices and applications and submission of confidential client information to third party service providers during this engagement.

Client Portals

To enhance our services to you, we will use a collaborative, virtual workspace in a protected, online environment. A client portal allows for real-time collaboration across geographic boundaries and time zones and allows Thrive Business Group and you to share data, engagement information, knowledge, and deliverables in a protected environment.

You agree that Thrive Business Group has no responsibility for the activities of a client portal and agree to indemnify and hold Thrive Business Group harmless with respect to any and all claims arising from or related to the operation of a client portal. While a client portal temporarily backs up your files to a third-party server, we recommend that you also maintain your own backup files of these records.

Third Party Service Providers or Subcontractors

In the interest of enhancing our availability to meet your professional service needs while maintaining service quality and timeliness, we may use a third-party service provider to assist us in the provision of services to you. This provider has established procedures and controls designed to protect client confidentiality and maintain data security. As the paid provider of professional services, our firm remains responsible for exercising reasonable care in providing such services, and our work product will be subjected to our firm’s customary quality control procedures.

Newsletters and Similar Communications

We may send newsletters, emails, explanations of technical developments or similar communications to you. These communications are of a general nature and should not be construed as professional advice. We may not send all such communications to you. These communications do not continue a client relationship with you, nor do they constitute advice or an undertaking on our part to monitor issues for you. You may unsubscribe from our newsletter at any time.

Disclaimer of Legal and Investment Advice

Our services under this Agreement do not constitute legal or investment advice. We recommend that you retain legal counsel and investment advisors to provide such advice.


In the course of providing services to you, you may request referrals to products or professionals such as attorneys, brokers, or investment advisors.  We may identify professionals(s) or product(s) for your considerations.  However, you are responsible for evaluating, selecting, and retaining any professional or product and determining if the professional or product meets your needs.  You agree that we will not oversee the activities of and have no responsibility for the work product of any professional or the suitability of any product we refer to you or that you separately retain.

Further, we are not responsible for any services we perform that fail to meet the intended outcomes as a result of relying on the services of other professionals or products you may retain.

Record Retention and Ownership

We will return to you all your original records and documents provided to us. Your records are the primary records for your operations and comprise the backup and support for your work product. Our copies of your records and documents are not a substitute for your own records and do not mitigate your record retention obligations under any applicable laws or regulations.

Workpapers and other documents created by us are our property and will remain in our control. Copies are not to be distributed without our prior written consent. Our workpapers will be maintained by us in accordance with our firm’s record retention policy and any applicable legal and regulatory requirements.

Our firm destroys workpaper files after a period of 7 years. Catastrophic events or physical deterioration may result in damage to or destruction of our firm’s records, causing the records to be unavailable before 7 years.

Working Paper Access Requests by Regulators and Others, Summons, or Subpoenas

All information you provide to us in connection with this engagement will be maintained by us on a strictly confidential basis. Access to or copies of certain documents and workpapers may be requested by state, federal, and foreign regulators, legal summons, or subpoena.  Requests may also come in the form of peer review, ethics investigations, or in the sale of the accounting practice.

If we receive a summons, subpoena, or request for copies of selected workpapers, provided that we are not prohibited from doing so by law or regulation, we agree to inform you of such request as soon as is practical. If requested, access to such documents and workpapers will be provided under the supervision of firm personnel and/or our legal counsel.

You may, within the time permitted for our firm to respond to any request, initiate such legal action as you deem appropriate at your own expense to limit the disclosure of information. If you take no action within the time permitted for us to respond, or if your action does not result in a judicial order protecting us from supplying requested information, we may construe your inaction or failure as consent to comply with the request.

If we are not a party to the proceeding in which the information is sought, you agree to reimburse us for our professional time and expenses, as well as the fees and expenses of our counsel, incurred in responding to such requests.

Accountant – Client Privilege

Internal Revenue Code §7525, Confidentiality Privileges Related to Taxpayer Communication, provides a limited confidentiality privilege covering certain tax advice embodied in taxpayer communications with federally authorized tax practitioners in certain limited situations.

This privilege is limited in several important respects. For example, this privilege does not apply to your records, which you are required to retain in support of your tax return. In addition, the privilege does not apply to state tax issues, state tax proceedings, private civil litigation proceedings, or criminal proceedings. While we will cooperate with you with respect to the privilege, asserting the privilege is your responsibility. Inadvertent disclosure of otherwise privileged information may result in a waiver of the privilege. Please contact us immediately if you have any questions or need further information about this matter.

Conflicts of Interest

If we, in our sole discretion, believe a conflict has arisen affecting our ability to deliver services to you in accordance with either the ethical standards of our firm or the ethical standards of our profession, we will notify you as soon as it practical.  We may be required to suspend or terminate our services without issuing our work product.

Alternative Dispute Resolution

If a dispute arises out of or relates to this engagement letter including the scope of services engagement contained herein, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try to settle the dispute by mediation administered by the American Arbitration Association (“AAA”) under the Professional Accounting and Related Services Dispute Resolution Rules before resorting to arbitration, litigation, or some other dispute resolution procedure. The mediator will be selected by agreement of the parties. If the parties cannot agree on a mediator, a mediator shall be designated by the AAA. Any mediator so designated must be acceptable to all parties. The mediation will be conducted in Whatcom county, Washington state. The mediation will be treated as a settlement discussion and, therefore, will be confidential. The mediator may not testify for either party in any later proceeding related to the dispute. No recording or transcript shall be made of the mediation proceedings. The costs of any mediation proceedings shall be shared equally by all parties. Any costs for legal representation shall be borne by the hiring party.

Designation of Venue and Jurisdiction

We agree that the courts of the state of Washington have jurisdiction over the parties and all disputes between us, and we agree to submit all disputes to the Whatcom County Superior Court, which is the proper and most convenient venue for resolution. We also agree that the law of the state of Washington shall govern all such disputes.

Proprietary Information

You acknowledge that proprietary information, documents, materials, management techniques and other intellectual property we use are a material source of the services we perform and were developed prior to our association with you. Any new forms, software, documents or intellectual property we develop during this engagement for your use shall belong to us, and you shall have the limited right to use them solely within your business. All reports, templates, manuals, forms, checklists, questionnaires, letters, agreements and other documents which we make available to you are confidential and proprietary to us. Neither you, nor any of your agents, will copy, electronically store, reproduce or make available to anyone other than your personnel, any such documents. This engagement letter will apply to all materials whether in digital or “hard copy” format.

Statute of Limitations

You agree that any claim arising out of this engagement letter shall be commenced within one (1) year of the delivery of the work product to you, regardless of any longer period of time for commencing such claim as may be set by law. A claim is understood to be a demand for money or services, the service of a suit, or the institution of arbitration proceedings against Thrive Business Group.

Termination and Withdrawal

You may terminate this agreement at any time with or without cause by notifying us in writing of your desire to do so. Upon receipt of the notice to terminate services, we will cease all work on your behalf immediately. You will be responsible for paying all fees, expenses, and disbursements incurred on your behalf in this matter until written notice of termination is received by us.

We may terminate our services at any time if you breach any material term of this agreement, fail to cooperate or follow our advice on a material matter, if a conflict of interest develops or is discovered, if there exists, at any time, any fact of circumstance that would, in our opinion, render our continuing services unlawful, unethical, or otherwise inappropriate, or for any other reason at our sole discretion.

If we elect to terminate our services, you will timely take all steps reasonably necessary and will cooperate as reasonably required to relieve us of any further obligation to perform services, including the execution of any documents necessary to complete our withdrawal from services or transfer your file to another firm. In such case, you agree to pay for all services performed and any fees, expenses, or disbursements incurred on your behalf before the termination of our services in accordance with the provision of this agreement.


All parties acknowledge and agree that the terms and conditions of this engagement letter shall be binding upon and inure to the parties’ successors and assigns, subject to applicable laws and regulations.


If any portion of this agreement is deemed invalid or unenforceable, said finding shall not operate to invalidate the remainder of the terms set forth in this engagement letter.

Entire Agreement

This engagement letter, including the Terms and Conditions Addendum and any other attachments, encompasses the entire agreement of the parties and supersedes all previous understandings and agreements between the parties, whether oral or written. Any modification to the terms of this engagement letter must be made in writing and signed by both parties.

Extension Request

[Updated February 21, 2022]


Business Filing Extensions

If you are a current Thrive business client (tax forms 1120s and 1065) and would like a tax filing extension, please send an email request to by March 1st,  using “Extension” in the subject line.  We will file the extension on your behalf.


Personal Filing Extensions

For personal tax return extensions (and businesses filing on the 1040 form) there are two options.

First option: File it online yourself

The first option is to go to the IRS Direct Pay website and file it online by paying $1.  It’s easy, and most of our clients have chosen this option.  Just make sure you select EXTENSION as the reason for payment.

Then please send us a copy of your IRS confirmation page (or at least your confirmation number) for our records by March 31st.    Either emailing to or uploading to your portal is fine.

Siobhan explains this simple process further below:


Second option:  Provide us with your data

The second option is to have us file it on your behalf.  In order to do that we need this form completed by March 31.  (Or email the information to us You must provide us with both your estimated 2021 tax liability, and the estimated 2021 tax you have already paid.   We cannot estimate these numbers for you.

Siobhan explains this option further below:



Siobhan explains more about the 1040 extensions below:



Tax Law Updates! (American Rescue Plan)

On March 11, 2021, the president signed into law the American Rescue Plan Act of 2021.  This is another massive COVID relief legislation that has significant tax changes to both 2020 (retroactively) and 2021.

Below are the highlights that are most likely to affect many of our clients.  This is not comprehensive coverage of the bill, or even the tax aspects of the bill, but the most important items (from my point of view) to bring your attention to at this time.


2020 Retroactive Tax Law Changes

There are two significant changes that are retroactive to 2020:

  • Up to $10,200 in unemployment compensation per person is non-taxable on tax returns with Adjusted Gross Income less than $150,000. (This $150,000 limit applies whether your return is Single or Married Filing Joint – there is no increase/doubling for Joint returns.)
  • There is no repayment of medical insurance subsidy if you purchased your medical insurance on the state exchange (Affordable Care Act plan on and received more subsidy than your income allowed for.

If either of these apply to you, you fall into one of three categories:

If we already filed your return – The IRS says “do not file an amended return YET.”  We have you on our list of returns that will need to be fixed as soon as the IRS gives us guidance as to how they want us to fix it (and we receive the appropriate software updates from our tax preparation software vendor).

If we completed your return but have not yet filed it – We will hold off on finalizing / filing your return until the IRS has given us guidance on how to report these items (and we receive the corresponding software updates).  We will let you know if this applies to you, so you know your return is done, except for this issue.

If we have your return in process but not yet completed – We are screening every return for these two items until the IRS and our software vendor have issued updates.  If they do not apply to you, we will finalize & file your return as normal.  If they do apply to you, we will notify you that your return is done but on hold for these updates.


2021 New Tax Law Highlights

These changes affect the 2021 tax year ONLY – these are not permanent changes and do not affect future years.

3rd Relief/Stimulus Payment – This is similar to the two prior payments (currently being reported on your 2020 tax return) but with a few critical differences:

  • You should receive $1,400 per person listed (claimed) on your tax return (taxpayer, spouse, and all dependents including adult dependents).
  • If your Adjusted Gross Income (AGI) is $75,000 – $80,000 (single filers) or $150,000 – $160,000 (married joint filers), you will receive a partial payment. If your AGI is over these ranges, you will receive no payment.
  • The IRS will reference your last filed return for your income & eligibility (2019 or 2020).
  • If the IRS overpays you, you will not have to pay it back. If the IRS underpays you, you will get the rest when you file your 2021 tax return.
  • If you owe the IRS taxes on prior years, you should still receive this payment.
  • Please keep documentation of the amount you received – we will ask for it for preparing your tax return next year!

Child Tax Credit:

  • Tax credit amount increased from $2,000 per child to $3,600 per child under age 6 or $3,000 per child ages 6-17.
  • This credit starts getting reduced when your AGI is over $75,000 (single filers) or $150,000 (married joint filers).
  • The IRS has been instructed to pre-pay 50% of this tax credit in monthly payments July-December 2021 based on your last filing (2019 or 2020). Further, the IRS has been instructed to set up an online portal where taxpayers can opt-out of these monthly payments (or report other changes such as new children, marriage, divorce, etc). The IRS has said that this is (nearly) impossible to do with their outdated technology, so expect delays and glitches.
  • Then your 2021 tax return will report a reconciliation of the tax credit based on your actual income in 2021. If you received too much in pre-payments, you will not have to pay back the extra, but you will have to pay tax on it as additional taxable income.  If you received too little, you will get the extra credited on your 2021 tax return.
  • Beware! The tax withholding calculation for your paycheck may already take into consideration the old child tax credit amount ($2,000). Add to that the pre-payments (for example $250 per month Jul-Dec to give you $1,500 or half of the $3,000 credit), and you could easily receive an over-payment of the tax credit and have surprise taxable income on your 2021 tax return.

Childcare Tax Credit

  • The amount of childcare expenses that qualify is increased from $3,000 to $8,000 per child.
  • The tax credit has increased from 35% to 50% (subject to reductions at higher incomes)
  • Employers have the option to offer dependent care benefits up to $10,500 per family (increased from $5,000).

Medical Insurance Subsidy (& Unemployment Income) – These changes affect both 2021 and 2022:

  • The income qualification for receiving the subsidy on medical insurance purchased on the state exchange has changed. Previously, you qualified for subsidy if your income was less than 400% of the poverty level. Now your premium cost is limited to 8.5% of your income (with no comparison to the federal poverty level), anything more is covered by subsidy.
  • If you have any unemployment income at all, you will receive the maximum subsidy, regardless of your overall income. (Please note, this is how the tax law is currently written.  This seems to be an area where the details may have been overlooked and corrective legislation could be passed later in the year.)

Extended items from 2020 legislation – There were several provisions from prior relief laws that have been extended or had additional funding:

  • The Sick Pay and Family Medical Leave Pay from the very first Families First Coronavirus Response Act in March 2020 has been extended to 9/30/21. In addition, there is a second 10 days of Sick Pay allowed for 4/1/21 – 9/30/21 if 10 days were already used in the prior 12 months. (For a refresher on this – see our original blog post about the FFCRA Act here: )
  • PPP / EIDL – There are no new EIDL Grant applications allowed and there is no new (3rd) PPP loan program. However, both the PPP program and EIDL programs have received additional funding.
  • Employee Retention Credit has been extended for the full 2021 year. It is still a 70% credit, up to $10,000 in wages per quarter for businesses with a 20% decrease in cash receipts (compared to the same quarter in 2019).
  • Unemployment compensation supplements of $300 per week have been extended through 9/6/21. There is no provision for this to be nontaxable in 2021 (so far).

Tax Preparation Roadmap


Have you ever wondered about what goes on behind the scenes when we are preparing a tax return for you?

Or why it takes a few weeks instead of a few days?

Or why we are so persistent in emailing and calling to follow up on questions we’ve sent you regarding your tax return?

We work hard at preparing your tax return with accuracy, thoroughness, care, and an eye toward tax strategy.  There are a surprising number of steps in the process.

We invite you to watch this short video where we give you a tour of our Tax Preparation Roadmap – we’ll show you the steps involved on our end and where we ask you to take action to help us deliver our best work to you.

Tax Preparation Roadmap graphic

Thank you for watching,