Our Taxing Times

Cranky

It has been brought to my attention that recent posts sound cranky. They are. That is because I am cranky. Deal with it.

It is taking all my good manners to deal with clients and the general public. So don't expected it in my blog. I need to vent somewhere or go crazy.

I have been running 70+ hours a week (more like 80+) for 12 weeks and I have 3 more weeks  of 80++hours a week. The clients who still haven't been in are making me manic/depressive. Manic that they still will be in and "how will I get their return done". The depressive part is "what if they don't come in?" and I make less money this year and have to eat ramen noodles all summer.

Almost all my meals are passed to me through drive-thru windows. Forget cooking or even a sit down resturant, I don't have time. I also have nothing to cook in the house because shopping has been limited to running in and grabbing "must haves" (toiletreis, laundry detergent, diet coke and chocoalate).

Besides a stack of returns to finish (and some are magic, all I have to do is one one of these big boys, spread it out on my desk and people start dropping by and calling), I have a list of people who are my late people and another group who are MIA but I really expect to make it in too. Then there are the 1st quarter payroll reports that will have to be done ASAP and some bookkeeping that need to be done so I can make estimates based on them.

Thanks to the delayed due date, I have to give up another weekend. It means I will miss a special college group reunion. 

Worse of all is hearing everyone with all the "cute" tax remarks. "I bet you're busy right now", "Getting any sleep?", "This is your fun time" These usually proceed their wanting to visit about something that can wait 3 weeks but they were in the area. These are the same ones who won't wait until I clear my desk or finish with the client at my desk before interrupting.

There is even more to rant about but you get the idea.

I know this is part of the job. I know that this will calm down in 3 weeks and I will write a blog post about how quiet it is. But until then, expect cranky blog posts and Facebook entries.

Special and Deserving.

This time of the year, it has to be something special to catch my eye and get me to spend the time to write a blog entry. And this triggered my interest because I have been dealing with this issue a lot the last couple of weeks.

The typical American tax cheat is male, single and under the age of 45.

According to a CNN article, that’s what an annual survey by DDB Worldwide Communications Group found.

DDB found that while 15% of Americans admit to cheating (admit being the key word), 64% of those are men, 35% were single and 55% were under the age of 45. And their dishonest behavior is not limited to taxes. The same survey found that 73% admit to working a job for “under the table” pay. They would keep the wrong change, have a friend pretend to be a former boss as a reference, lie to get governmental aid, and file false insurance claims. 28% of them would even take money from their kid’s piggy bank (as opposed to 3% of non-cheaters). However, the likelihood of cheating is not based on income level. DDB’s survey found that tax cheaters have the same income levels as non-cheaters.

Interesting, but it’s a statement in the article that really caught my attention. “Far more tax cheats said they are ‘overall better people’ and that they are ‘special and deserve to be treated that way’, compared to the people who said they don’t cheat.”

“Special and deserve to be treated that way.”

Yeah, right! That statement makes so much clear. It’s not just about cheating but their behavior in general. Looking back at the rude client behavior the last few weeks, 80% has come from men under the age of 45. A couple of them are married but the attitude is still there. And I don’t see them changing as they get older.

According to James Lou, the U.S. Chief Strategist at DDB Worldwide “While it’s understandable that no one likes to pay taxes, we were surprised to find that tax cheaters’ overall willingness to engage in other unethical and illegal behavior is perhaps justified simply by their belief that they are special and deserve special treatment,”

Since they think they are so special, maybe the IRS should treat single men under the age of 45 to a very special audit. To bad that confidentiality rules would keep me from recommending some candidates.

Gatekeeper

I shouldn’t be writing a blog post right now. I have a little over 3 weeks before the main tax season is over and I have too many returns on my desk and coming in to justify the time. But I am tired and a little procrastination is good for the soul (and motivation). And a few things have brought an issue to a head and I thought I would share.

Early in January each year I send out a client mailing. Along with a referral coupon and calendar, I have a one page newsletter covering office and tax issues that I think my clients should know. Right now, this is the lead article.

 

Is It Worth $20?

For most of the year, McIntire Tax Center is a one woman operation. I do it all; the tax returns and questions, answer the phone, clean, keep all the paperwork in order if the IRS should want to see anything and do everything it takes to keep a business running. To do this I maintain an open office. My desk isn’t hidden in a room down a hall; it’s visible, although slightly screened, from the door. While that makes it easier to greet clients when they come in, it has become an issue with some clients. They assume because they can hear and see me, they can talk to me or come on back and have a seat. Some ignore the client at the desk or that I might be talking on the phone to chat or ask tax questions. Even if I’m alone, I may have confidential info on the desk that I would like to clear before you come back.

The phone has also become an issue. If I can’t answer, I have an answer machine to take a message. But too many won’t leave a message. They hang up and call back, and back. And let’s not even go into the unclear return numbers I get. If you left a message and didn’t get a return call, it’s because I didn’t get a clear number.

There is an easy solution to this problem. I can hire a receptionist full time for the season. Right now I only hire someone for a few weeks when I have the greatest number of clients coming into and calling the office. By the end of the 5 or 6 weeks, I don’t have much to for her to do and she’s doing personal stuff to keep busy. Hiring someone for the full season will mean. for most of the time. they will be sitting around. Now, I’m not going to pay someone to do that and that’s why I ask if you are willing to pay $20 more for your return. If I have to hire a full season receptionist, return costs will have to go up to cover it. That is on top of other increases. Sorry.

So help me keep your tax preparation costs down. Understand that I am doing it alone most of the time and you need to be little patient. The option is to hire a gatekeeper and let you pay for it.

 

It needs some work before it’s ready for the news letter and it will probably be wasted effort. But it is a problem. Since I began writing this post, 3 people have come into the office. Only one waited at the front counter until I asked her to come back. The other two  walked past that counter, a second counter with a lattice screen (a little privacy) and sat at the desk before I could get out of the chair to greet them. At least, I wasn’t with another client. They might have stood there asking their questions ignoring the other client.

First Time Homebuyer Credit Strikes Again

I don't know if the First Time Homebuyer's Credit (FTHB) is the worse tax law(s) ever written but it is the biggest pain in the a-- for taxpayers and preparers. On top of having to start paying back the credit, some taxpayers who received version 1.0  (the loan) are now finding their refunds are being delayed.

The IRS says that most of the returns with repayments are processing normally but they are having problems with some of the returns. Looks like there are 3 groups.

1.  Married Filing Joint taxpayers who received the FTHB credit on a 2008 purchase. The IRS projects that some of these taxpayers will receive their refunds as soon as April 5 and others the following week.

2.  Taxpayers who received the FTHB credit and are now reporting the sale or disposition of their home. The IRS projects that taxpayers in this situation should receive their refunds by the end of April.

3.  Taxpayers who received the FTHB credit and are attempting to pay back more than the amount required (typically $500). The IRS projects that taxpayers in this situation should receive their refunds by the end of April.

 

So, if you fall into one of these groups, don't spend your refund until you actually receive the money. (That is good advice for anyone waiting on a refund.)

 

A Simple Return?

Pop Test! One question; what is a simple tax return? Correct answer; whatever return the caller has. Their goal is to get you to under price the return. This will be something they will hold you to no matter how much they mislead you.

Okay, it was a trick question but a real world answer. I get it all the time. I price returns by the forms and entries I have to use. When a shopper calls, they are given the price for a Federal/Kansas return with one W-2 ($70) and told that is with absolutely nothing else. I don’t price on the phone. If they want to come in and let me look at their return, I’ll give them a ballpark figure. No obligation.

I define a “simple return” as one with income from W-2s, interest or unemployment. The filing status doesn’t matter as long as there are no dependents. Dependents, other types of income, credits all make the return more complex.

Dependents are the single most complicated issue any preparer will handle on a regular basis. I would rather figure a Kansas NOL carryforward (and I hate them) than be stuck in the middle of a dependent fight. Once there is a dependent on the return, the child can affect many credits, deductions and filing statuses, each with their own rules. And don’t get me started on the due diligence I have to do for Earned Income Credit. Not at all simple.

Yes, type of income is also a deciding factor in how simple a return is. The amount of the income doesn’t change the complexity. I still have to figure the special capital gains tax calculation on a return with qualifying dividends. It doesn’t matter if the amount is $15 or $10,000+. And just because it comes on a 1099MISC doesn’t mean that it is treated like a W-2. Too often, a special form or 2 is required. And all investments are not the same. If you buy a stock and don’t sell it, you just have dividends to report. You buy a limited partnership and the complexity level of your return can go through the roof even if you don’t sell it.

Finally, for me, the more organized the client the simpler their return. A shoe box of loose receipts can turn a one W-2 return into a complex preparation. I can’t rule out that you might be able to itemize or have another deduction or income until I go through the box. Just clipping receipts together by type (charity, medical, taxes) can simplify my life tremendously.

Bottom line, a simple return is the return that someone else does for you. The real test of complexity is the time it takes to fully prepare the forms required to properly report your income and claim your credits and deductions.

The Annual Reminder

Your Failure to Plan is NOT My Emergency!

 

Just because returns are not due until April 18th this year, it does not mean that you should wait until then to get your tax returns started. You might get a nasty surprise.  Each tax preparer and office has their own procedures for handling last minute  returns.  Some put everyone in after the 1st of April on extension. Some, myself included, don't take appointments on the last couple of days because we are busy finishing returns, re-printing vouchers, answering questions,and dealing with return pick ups. Others preparers like the rush of trying to get everyone in and out. It's easier for you to find out the preparer's policy and get your info into them when they can work on it. Also, your return is not the only return a preparer is working on them. Just because it's a simple return doesn't mean we can drop everything else and do your return. We have other tax clients and many have bookkeeping clients who need quarterly reports and payroll done at this time too.

A little planning on your part is all we ask. If not, accept the consequences.

 

Tax Tips and Musings

It's the heart of tax season and getting a full blog post together is difficult.

However, I have been posting quick tips, suggestions and thoughts on taxes on my Facebook page. So, please check that out too. You can use the Facebook link to the left and down, run a search for "mactaxctr", or use this link.

 

Did You Look At It?

Your 2010 income tax returns are done. Good for you! But...did you look at them? Really look at them. If you did them yourself by hand that means checking the math and the data entry. But if you used a computer program or a paid (or not paid) preparer, you still need to check and make sure the return is correct. I'm not talking complex issues like the calculation of your capital gains or EIC. That's what computers do best. It's the simple and easy to catch mistakes that will come back to haunt you.
Some suggestions - Look at the filing status on the return. If you are married, then you should be filing married, either 'married filing jointly" or "married filing separately". Question it if the preparer has you as something else. There are some exceptions but make sure you qualify. If you aren't married you shouldn't be filing as married. Are you claiming the correct children this year? Does the income look right? Is it all there? Look at the refund/balance due, does it seem right? If there is a big difference between years, ask why.
Mistakes happen. But when the IRS figures it out in a couple of years, you are the one who will be paying back the surprise refund. Or, realizing later that the return has to be amended because something was forgotten(like a credit or deduction). The bottom line is that your tax return is your responsibility. So, take a few minutes to review the return before you sign or hit send. It could save you a lot of grief down the line.


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