My (40F) best friend (38F) cost my husband (41M) and I over $50,000. I think she is not completely at fault, but my husband never wants to see her again. Who is at fault, and how do I not lose my friend?

My husband (41M) and I (40F) own 2 small businesses. My best friend (38F) owns an accounting business with her husband, and they have been doing our taxes and bookkeeping for about 5 years. For the past 2 or 3 years my husband has been saying that he thinks they don't do a very good job and we should hire someone else. However, she charges us $50/month for bookkeeping and $300/year for tax filing, and we previously were paying $1200/year for tax filing and i was doing bookkeeping myself (quotes from other professionals run about $500+ monthly for each business, so she is a bargain). I'm terrible with numbers, I never should have had that job, and was glad to pass it on to my friend.

I have been hesitant to replace her because I didn't think we could afford it, and I didn't want to insult her. We also barter services so the low monthly fee was somewhat made up by our free monthly service we performed for her.

The reason he wanted to fire her is because we never can seem to get a clear idea of what we earn. The accounts are never up to date, it's never accurate, it always seems very confusing but then she explains it and manages to make it seem like it makes sense but just isn't complete yet.

So this year January comes and we give her our info for tax filing. She comes back to us with our tax return showing an income quite a bit higher than any previous year. Now, we did indeed have a more profitable year in 2020. But we never could tell exactly how profitable it was, because the numbers are all so complicated and confusing. We honestly don't know how much we have made in previous years either, because with self employment taxes it's difficult to parse out from a tax return what the actual income was for us. There's so many expenses and deductions and credits and depreciation... It's a lot. And our businesses are "pass through" income style. We don't draw paychecks, we just take money out and pay self employment taxes on that.

(as an aside, my husband has a learning disability and I have medical brain lesions, so we both have legit reasons why we can't sort this shit out on out own)

In 2017 we owed $2,000. In 2018 we got a refund of $1200. In 2019 we got a refund of $5000 (which actually hasn't arrived yet and my husband suspects it's my friends fault somehow). So we expected something in that range for the 2020 bill... And our tax bill was $16,000. I cried. My husband cried. I asked her a few times if she was sure it was right. She assured us it was right. So we used every bit of savings we had, and some credit, and the money we had saved up so far for 2021 taxes, and we paid the bill. This is part 1 of the problem.

Part 2 of the problem is that we needed to take out a loan now, as our savings had been to purchase a large piece of equipment for the business and that went to taxes instead. When applying for that loan, our banker asked us why we hadn't applied for forgivable PPP loans for the businesses. I thought we had not qualified, and apparently we would not have for the first round but there was a second round of funding and we would have qualified for that. The banker said "I can't believe your accountant didn't tell you about this!" and rushed to get our applications in. Apparently we could have qualified for two forgivable loans. One for $12000 and one for $23000. Today that government program ran out of funding. We ran out of time.

Now back to part 1 of the problem... We looked over our taxes and they aren't correct. It seems she somehow added $3000-4000/month to our income! I do not know how. I do not understand. It came to light during the loan application process when our bank accounts didn't match the income listed in her bookkeeping software. Luckily it was my husband who discovered it, not a banker or someone official. But it means we overplayed out taxes by A LOT.

So what now? Refile our taxes and risk an audit? There's no way we wouldn't get an audit if we are trying to take back our $16,000 payment... So we just live knowing we overpaid that? And now have to get a loan to make up for it? And also the free government money she should have told us about...

But. My thought is that it's truly our fault. The onus is on us to do our own due diligence. We should have examined those taxes more closely, looked at the bank account and her software and checked things out before paying that bill. Why didn't we?! I am filled with regret. I didn't think we needed to double check, I trusted that she knew what she was doing, and I didn't believe that we would be able to understand what we were looking at anyway... I was wrong. And as far as the PPP loan? Again, we should have paid more attention, known that there was a second round, applied for it... Even if the banker said our accountant should have told us, I think we should have known ourselves.

Anyway. Tomorrow we have a quarterly financial meeting with her on zoom. And I have no idea how it will go. My husband is big mad. I really don't want to ruin this friendship. Our children are friends, and my daughter really doesn't have many friends at all and I don't in any way want to fuck that up for her. I love this woman and her family and don't want that to be damaged.

So whose fault is it? Our fault or her fault? 50/50? And how to proceed in talking to her about it? I feel like she won't be forthright and just say "wow yeah, I fucked up, sorry guys" and instead will have some financial excuse that I won't be able to understand in the moment. I'm scared. Please help.

TL;DR: How do I not lose my best friend when she potentially caused me to lose an entire years worth of income?

Submitted May 05, 2021 at 03:43PM by BocceBurger https://ift.tt/2RuNKMe