My Life as a Volunteer Tax Preparer – Ch. 2.2

February 10, 2010 by  
Filed under Taxes

This week’s volunteer visit to the Tax-Aide office was different from last, in that each of the three taxpayers I worked with was new to our office. That made a little more work fro me but also allowed more time to hear their stories. It’s amazing to me how willing these folks are to tell their stories with little or no prompting on my part. It’s not as if I have a reputation of being approachable or empathetic either. (Ask Mrs. ToughMoneyLove – she’ll tell you!)

My first taxpayer was a retired firefighter, still married after 40+ years and putting in 36 years with the local city fire department. He and his wife were doing well in retirement: two government pensions, one annuity, and two Social Security checks. They also owned their home, mortgage-free. We talked about how difficult it can be to get a job with the fire department. He acknowledged that and said that his son was lucky enough to work there. One thing that many of us don’t realize is that firefighters and EMS employees often work second jobs because their peculiar schedules allow that.

The only thing that surprised me about his financial picture is that he had bought a new car in 2009 and had financed it. On the other hand, he had a 0% interest loan. It may be that he and his wife have solid retirement incomes but not a lot of extra cash. His wife had paid $130,000 lump sum for her annuity.

Overall, this gentleman seemed very content with his life. We all should be so fortunate when we retire.

My second taxpayer was not so happy. She was only 62 and recently started receiving Social Security retirement benefits. She was forced by illness to leave her job which she liked a lot. She was waiting on a decision about disability benefits. She didn’t tell me anything specific about her illness except that it was not ┬áterminal but also difficult to treat.

One unfortunate consequence of the timing of her retirement is that she had to liquidate her entire 401(k) account. She told me that because of the time lapse between losing a paycheck and turning SS eligible at 62, she needed that 401(k) money to live on. This is why folks should buy disability insurance. Her Social Security benefit was quite low. She lived with a male friend who was also on disability. That didn’t sound like a fun household to be in. It could be a long, miserable retirement.

My final taxpayer was a woman drawing a small Social Security benefit and working two jobs. Her 30 year old son was living with her because he had lost his job, was drawing unemployment, and had gone back to school for more training. (He was there also, being helped by another volunteer.) I started to ask her questions about providing support for her son, to explore whether she could claim head of household filing status. She did not want to pursue that angle because she did not want to embarrass her son. Claiming HOH status would mean that her son would have know about it so that his tax return would be accurate. She just didn’t want to go there, even though it might mean a larger refund for her. That’s a loving Mom for you.

After I completed two of these returns, the taxpayers asked me questions about making future money plans, as if that “Volunteer” badge qualified me to give personal finance advice. This happens a lot in that office. I think it’s because I am by far the youngest volunteer there, even at age 59. I’m also the only volunteer still working a paying job. Anyway, I try to answer the questions I receive when I have time. But I always tell them that the advice they receive from me may be worth no more than what they are paying for it!

More stories next week. See you then.

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5 Responses to “My Life as a Volunteer Tax Preparer – Ch. 2.2”
  1. wrc1000 says:

    Wow, I really love these “taxpayer on the street” stories . . . the voyeur part of me loves to see how others have handled the finances in their lives . . . thanks for the insight

  2. TML, how do you remember all these details about your appts? I also volunteer with AARP TaxAide, but I wouldn’t be able to retell the taxpayers’ stories in as much detail if I weren’t taking notes after each one. Is that what you do, or is your memory just that good? Maybe I could remember more than I think if I wrote up an article when I get back from volunteering.

    • Paul: I do not take notes. I only meet with 3-5 people in an afternoon. That evening I start writing up what I remember. Because I know I will be doing that later, it isn’t that hard for me to think about then recall interesting things that happened a few hours earlier.

  3. kitty says:

    As usual, very interesting stories.

    I don’t see why the first client’s decision to take a loan at 0% instead of paying cash that she likely has. Arbitrage is the long and well known way of making money.
    “… On the other hand, he had a 0% interest loan. It may be that he and his wife have solid retirement incomes but not a lot of extra cash …”

    Or most likely, she earns more on the cash than 0%. She can get 2% on a 2 year CD which is a whole lot better than 0%. I’d do the same.

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