Saturday, February 27, 2010

How to Overpay Your Taxes

Some people insist they overpay their taxes. They don’t say it in so many words, but their actions guarantee they overpay Uncle Sam.

I am in the middle of my 27th tax season and I see the same patterns today I saw back in 1982. Many people treat tax return preparation as a fast-food purchase when it really is serious surgery.

Below are the three things people do in my office that multiply the risk they overpay the government. I excluded the often repeated advice of keeping good records, etc. The points below focus on specific action taken when sitting in front of me; things that put your hard-earned cash at risk.
  • 1.) Time is an important factor for an accountant during tax season. Feeding me tax documents one at a time and explaining to me what each W-2 is only wastes time. Soon, my eyes roll back in my head because my 15 hour workday will be even longer.
  • The reason this puts your money at risk is because I will have no time left to share the latest changes to the tax code that can save you money. There are only so many hours in a day. Slowing down my work flow adds to my stress and leaves little to no time to put cash back into your pocket. Remember, tax preparation is only a small part of my job; tax planning is where the rubber meets the pavement. My value comes from knowledge and experience. If you force me to listen to a description of each document, I can’t share ideas.
  • 2.) Turn off your cell phone before entering a tax preparer’s office. I want to focus on serving you. If your cell phone rings every few minutes (this happens more than you imagine), opportunities for mistakes and errors rise. The interruption might cause you to fail to inform me of an important bit of information. Few phone calls are worth overpaying your taxes or risking an audit. Put your cell phone on silent, not vibrate. It is your money. You do want to keep it, right?
  • 3.) The most disruptive events in my office include young children. I can cut your tax bill in so many ways, but if I am constantly defending personal papers in my office, you are not being served well. Your income for an entire year is at risk. The number one reason I am required to amend a tax return is due to rushed parents chasing their children while in my office.
  • I have a few suggestions. Have one parent sit with the children while the parent most familiar with the finances works with me to prepare an accurate return. Then we will have time to discuss opportunities to reduce your tax burden. Parents, and I confess, me too, want to end a meeting as fast as possible when young children are screaming and attacking other papers in my office. I hate it. I want to serve you. Ending a meeting to save my work space from disaster is a poor way to reconcile a full year of income and deductions.
You spent time gathering all your documents; you sweat out the final results; now let me really serve you. Stop the distractions and interruptions. It is your money. I want to provide a value-added service. Please, help me to excel when serving you. It is what I am trained to do.

Tuesday, February 23, 2010

The Rules

Here, on this blog, and on my articles published on HubPages, I've noticed an increase in questionable comments. Here are my rules for allowing a comment to post:

The comment will post, unless:
  • It contains personal information, or
  • Contains profanity, or
  • Is an attack on anyone or anything, or
  • Is illegal, or
  • Irritates me.
If your comment is total spam, forget it. If you try to pass a line of garbage, I'll post it and expose the shortcoming.

Sunday, February 21, 2010

Not Worth Killing for Either

A bit ago I talked about keeping your cool in the tax office. No matter how bad things first appear, never threaten suicide when on the phone with the IRS. Don’t threaten suicide to your tax preparer either. Things will only get worse if you do.

The only thing worse than threatening suicide, is flying your airplane into an IRS building, as an idiot did earlier this week. Killing people while ending your life is really bad. Just because you want to check out does not give you the right to kill innocent men, women, and children.

Tax issues do not always resolve fast or on your preferred time schedule. Persistence goes a long way. When a client demands instant results I usually refer them to a tax attorney while working the best angles for resolution. The attorney can file a tax court petition while I do my job. Costs for the client go way up. But there is no other recourse when instant gratification is demanded. The process is not speeded up; only costs rise.

I recommend patience in all cases. Sometimes you lose, sometimes you win. There are no guarantees. Taxes are not fair. You still need to work within the framework of the Internal Revenue Code. No suicide or killing IRS personnel. That makes you 100% wrong every single time.

Tuesday, February 16, 2010

Midwest Disaster Area

I have noticed a lot of returns from other accountants that missed the Midwest Disaster Area education credit booster. In short, students that attend a school in the Midwest Disaster Area can double their tax credit.

A full discussion on education credits would take a while and with tax season in full swing I don’t have the time to write a full article on the subject. Therefore, if your tax preparer does not bring up the subject, you should.

Several counties in Arkansas, Illinois, Iowa, Missouri, Nebraska, and Wisconsin qualify. There are other tax benefits to those in the listed area, including:
  • charitable giving incentives,
  • net operating losses,
  • education credits,
  • recapture of federal mortgage subsidy,
  • temporary relocation relief,
  • employee retention credit,
  • employer housing credit and/or exclusion,
  • demolition costs,
  • and an increase in rehabilitation credit.
Since too many tax pros are not asking the questions, you need to bring it up. The amount of money as stake is significant.

Monday, February 15, 2010


I enjoyed a long discussion with a client this week about her work environment. She informed me she checks her personal email, bank accounts, and so forth on company time.

I told her she should assume the boss is watching.

She said she has a hot key to flip the screen when the boss walks by.

I said, “Assume the boss is watching and recording every keystroke you make, because he probably is.”

“He would have said something by now if he knew,’ she said.

She refused to get the message. In this economic environment, would you risk your employment over internet shopping you could easily do at home on your own time? Do you want the boss to see exactly what you see and type on social networking sites? Personal email? Bank records?

I thought not.

When you assume, you make an ass out of u and me, as the saying goes.

Assume the boss is watching anyway. Because he is. And when he does talk with you, it could be to replace you.

Thursday, February 4, 2010

Making a Difference

I am a tax preparer. I prepare taxes and have for 27 years, 21 of those years full-time. My ego tells me I am pretty good at it and getting better. My rational mind asks, "Is this all there is? Is there nothing more?"

I answer myself, "Of course there is more. A lot more."

I believe it. I know of at least two clients that kept their home because of my advice since the beginning of the year. Several clients found jobs because of my efforts. At least 100 smiled and had a better day.

"So I am more than just a tax preparer?" I ask myself.

"Yes you are. So very much more. You make people's lives better, happier, safer, more comfortable. They count on you to anchor parts of their life. You are their friend."

I know it.

Lunch is two hours late for me today. My sandwich is getting dry. I lean back in my chair and chew the bread, close my eyes, and see the world I have become.

Wednesday, February 3, 2010


I have a third of my preparers are out due to illness. We are holding our own for now. We had several people miss thier appointment yesterday so we kept up. But our luck will not hold forever. I need my full staff back.

Tuesday, February 2, 2010


There is a price that must be paid when employed as an accountant. Tax season, and the resulting long workdays, leaves little time for family and even less time for writing.

Family comes first. I work to support my family. Without family I would live in a sheltered hole, content; never to be seen again.

The amount of spare time available to write is so limited I skip writing most days. I also rush my work and publish my blogs and article without the proper review. Later, I fix any issues in article (blog posts are on their own).

I love my work and plan on doing it a long time. For three or so months a year I sacrifice. Nothing serious. Now I have the opportunity to help a lot of people rapid-fire. I still write, and try to produce at least a few short publishable articles each weekend.

I miss writing each night after Sue and the girls go to bed. Most nights I am too tired to produce any quality. Still, it is such a thrill to get a few articles or a short story out on the weekend.

The 40 hour work week is preferable. For 12 -14 weeks each spring I practice the right of the “marathon run.” It keeps me honest.

Monday, February 1, 2010


There is a countdown clock at the bottom right of this page. The first person to guess what this is counting down to gets $10. You have to guess what I am counting down to. Telling me something that isn't what I am counting down to will not count toward the $10. There will be a big announcement on that day. You need to guess what that announcement will be.

Your guess must be left in the comments of this blog post. I will review and post each comment as time permits. I will also tell you if you are right or wrong.

Mysteries are so much fun.