Comments on: First Lessons Learned as a Volunteer Tax Preparer http://toughmoneylove.com/2009/02/09/lessons-learned-volunteer-tax-preparer/ The Hard Truth about Money and Personal Finance Fri, 19 Mar 2010 01:10:44 +0000 http://wordpress.org/?v=2.9 hourly 1 By: HomeFree http://toughmoneylove.com/2009/02/09/lessons-learned-volunteer-tax-preparer/comment-page-1/#comment-2417 HomeFree Tue, 10 Feb 2009 14:34:40 +0000 http://toughmoneylove.com/?p=1565#comment-2417 Your 4th client only reinforces the reality that there is a huge underground economy that is untaxed. Eliminate the income tax and institute a consumption tax and a lot of those who evade the system now contribute to the system from which they have been mooching. There is no perfect system but a national sales or consumption tax would fund the government, reward the savers, and capture revenue from the underground economy as well. Your 4th client only reinforces the reality that there is a huge underground economy that is untaxed. Eliminate the income tax and institute a consumption tax and a lot of those who evade the system now contribute to the system from which they have been mooching. There is no perfect system but a national sales or consumption tax would fund the government, reward the savers, and capture revenue from the underground economy as well.

]]> By: Beef Up Your Piggy http://toughmoneylove.com/2009/02/09/lessons-learned-volunteer-tax-preparer/comment-page-1/#comment-2414 Beef Up Your Piggy Tue, 10 Feb 2009 13:27:28 +0000 http://toughmoneylove.com/?p=1565#comment-2414 It seems that anywhere there is a service offered for free...there are going to be freeloaders with no reason to be there. Too bad there isn't requirements that could be reviewed before offering your hard earned time and effort. Good Luck! It seems that anywhere there is a service offered for free…there are going to be freeloaders with no reason to be there. Too bad there isn’t requirements that could be reviewed before offering your hard earned time and effort. Good Luck!

]]> By: kitty http://toughmoneylove.com/2009/02/09/lessons-learned-volunteer-tax-preparer/comment-page-1/#comment-2412 kitty Tue, 10 Feb 2009 04:22:18 +0000 http://toughmoneylove.com/?p=1565#comment-2412 "That bothered her and she repeated her complaint about having to pay an accountant. " Weren't you a little bit tempted to tell her that an obvious solution to not having to pay an accountant is to do it herself? She has time, she could have read the relevant publications - especially the one about residential rental property makes for an amazingly good bedtime reading, I can attest to it. I did it myself when I rented out. At the time I still used a calculator, it's only when I sold the property with a large gain that I started using Turbo Tax - too many worksheets. If anything, trying to do it herself would've given her more appreciation for what you do, especially for free. As far as I remember the depreciation part was fairly easy to figure out. It's amazing, by the way, that there are actually people who don't take it off; it was the best thing about renting. When I did the sale form, it clearly stated that you have to recapture depreciation you were supposed to have claimed regardless if you claimed it or not, but if you failed to claim it, you are welcome to amend past returns. Must be a nasty surprise for some of those who failed to claim depreciation, especially those who sold without a large enough loss that recapture isn't an issue. Regarding the 4th client - whenever I hear the statistics about how so many people don't owe any taxes I wonder which percentage of them is really poor and which are like your client #4. Isn't there an income limit on who can use a volunteer service? It seems like there should be. “That bothered her and she repeated her complaint about having to pay an accountant. ”
Weren’t you a little bit tempted to tell her that an obvious solution to not having to pay an accountant is to do it herself? She has time, she could have read the relevant publications – especially the one about residential rental property makes for an amazingly good bedtime reading, I can attest to it. I did it myself when I rented out. At the time I still used a calculator, it’s only when I sold the property with a large gain that I started using Turbo Tax – too many worksheets. If anything, trying to do it herself would’ve given her more appreciation for what you do, especially for free.

As far as I remember the depreciation part was fairly easy to figure out. It’s amazing, by the way, that there are actually people who don’t take it off; it was the best thing about renting. When I did the sale form, it clearly stated that you have to recapture depreciation you were supposed to have claimed regardless if you claimed it or not, but if you failed to claim it, you are welcome to amend past returns. Must be a nasty surprise for some of those who failed to claim depreciation, especially those who sold without a large enough loss that recapture isn’t an issue.

Regarding the 4th client – whenever I hear the statistics about how so many people don’t owe any taxes I wonder which percentage of them is really poor and which are like your client #4.

Isn’t there an income limit on who can use a volunteer service? It seems like there should be.

]]> By: Nate @ Money Young http://toughmoneylove.com/2009/02/09/lessons-learned-volunteer-tax-preparer/comment-page-1/#comment-2411 Nate @ Money Young Tue, 10 Feb 2009 01:16:58 +0000 http://toughmoneylove.com/?p=1565#comment-2411 Mr. TML, I was a VITA tax preparer for 2 years. You will encounter some interesting cases. Most of them are hardworking honest people who are trying to get by. -Nate Mr. TML, I was a VITA tax preparer for 2 years. You will encounter some interesting cases. Most of them are hardworking honest people who are trying to get by.

-Nate

]]> By: PW http://toughmoneylove.com/2009/02/09/lessons-learned-volunteer-tax-preparer/comment-page-1/#comment-2409 PW Mon, 09 Feb 2009 21:17:53 +0000 http://toughmoneylove.com/?p=1565#comment-2409 I deal with "imagination truths" all day long. I am in insurance, not a day passes when an angry client complains that the insurance company is not paying their medical bills. When I delve into the paperwork pile, it ends up that what is due is their portion of the bill--a $500 deductible and maybe a $20 copay. I always get "I cannot afford that" while I know that they just returned from a 3 week trip from China and will leave in another week for a month in Africa. The truths is a moving target. (sigh) I deal with “imagination truths” all day long. I am in insurance, not a day passes when an angry client complains that the insurance company is not paying their medical bills. When I delve into the paperwork pile, it ends up that what is due is their portion of the bill–a $500 deductible and maybe a $20 copay. I always get “I cannot afford that” while I know that they just returned from a 3 week trip from China and will leave in another week for a month in Africa. The truths is a moving target. (sigh)

]]> By: mike http://toughmoneylove.com/2009/02/09/lessons-learned-volunteer-tax-preparer/comment-page-1/#comment-2408 mike Mon, 09 Feb 2009 21:13:07 +0000 http://toughmoneylove.com/?p=1565#comment-2408 As a tax preparer its always fun to hear other people's war stories in the field. Client #2 should be upset with the IRS and government, not with you or even her other accountant. Its really not our fault that the govt requires you to take depreciation whether you want to or not. Issue number two is that is she was better organized and added up her income and expenses herself then presented it summarized format to her accountant the additional cost would be almost negligible. Judging by the fact you said she showed up at your office with a huge stack of paper she said "her accountant sent to her" meant she likely showed up to her accountants office with them they probably told her that she would be charged more because of the accounting involved, and left in a huff to take advantage of your free service. I personally feel bad for the firm that serviced her before, it's pretty obvious she has no respect for the work they do so I wouldn't be surprised if she had no respect for the work you do (much less the fact you're volunteering). Client #4 sounds like the typical shyster who wants to get the most from the system. Why even try to claim HoH when you're barely making any money to pay taxes on as it is, much less support a child with? Having the direct deposit go into a business account is okay with me, because if even one person 1099'd him and he didn't report the income it will trigger an audit. In fact schedule C filer's almost have triple the audit rate as other because they tend to make the most "mistakes." I wish you the best of luck this tax season! As a tax preparer its always fun to hear other people’s war stories in the field. Client #2 should be upset with the IRS and government, not with you or even her other accountant. Its really not our fault that the govt requires you to take depreciation whether you want to or not. Issue number two is that is she was better organized and added up her income and expenses herself then presented it summarized format to her accountant the additional cost would be almost negligible. Judging by the fact you said she showed up at your office with a huge stack of paper she said “her accountant sent to her” meant she likely showed up to her accountants office with them they probably told her that she would be charged more because of the accounting involved, and left in a huff to take advantage of your free service. I personally feel bad for the firm that serviced her before, it’s pretty obvious she has no respect for the work they do so I wouldn’t be surprised if she had no respect for the work you do (much less the fact you’re volunteering).

Client #4 sounds like the typical shyster who wants to get the most from the system. Why even try to claim HoH when you’re barely making any money to pay taxes on as it is, much less support a child with? Having the direct deposit go into a business account is okay with me, because if even one person 1099′d him and he didn’t report the income it will trigger an audit. In fact schedule C filer’s almost have triple the audit rate as other because they tend to make the most “mistakes.”

I wish you the best of luck this tax season!

]]>