MsTabbyKats

My fees are lower, but I work out of my home, without any overhead.

Everything is based on that specific client....so, someone with an A with no expenses other than state tax & charity won't pay much more than the standard deduction. Someone with a long list of every paperclip purchased pays me more.

As far as this free consultation....not with me.

I give an estimate based on what the client says they have....and then I add "as long as there are no surprises".

I believe next year I'm going to raise fees for new clients. I get a lot of referrals because of my "low fees" (the low fees started because my clients, for the most part, didn't have a lot of money)....but these new clients can afford more.

When I did walk in clients I would do estimates for $20 and tell them if they came back to me to get the complete return prepared and filed that $20 would be a credit to the final bill.

I suppose we could do something similar with these walking and talking advice customers??

Yes...when people "doubt my expertise" and want their papers back I charge a "consultation fee" and tell them I'll deduct it from the bill if they come back to me.

When the next preparer gets the same results (or worse) and charges double....they come back.

Another trick I use is if someone complains (only on sure things...W-2s....standard deduction etc) I tell them "Go anywhere else, and if someone gets you back even $1 more I'll give you your money back." So far...no refunds have been issued.

So are you not doing any 1040-NR next season. I thought that was your bread and butter?

Will you try to do it by hand and paper filing?

LOL...the IRS has a very nice fill-in form for the 1040NR. So...I can do it on the 1040-make adjustments-and copy it. It's not really "big deal"...just extra work.

In the past I did lots and lots of non-resident aliens. Now they are resident aliens (green cards) or moved back home. So...no problems there.

But...I get lots of referrals...and here's some of the problems:

1. My fees were low....too low...so I raised them...and the people started complaining. (I charged something like $150....the going rate was more like $300)

2. Non-residents have to itemize (usually...some exceptions)....but they have no expenses. The IRS has been looking closely at these returns...so, you see where that is going.

3. They come here for $30,000 with a wife and 2 kids. However, they have to file MFS...without dependents (again usually...some exceptions). Then they tell me that "they have 3 dependents" and I need to include this. Then I have to explain...this is the American system...not your home country.

4. The J-2 issues....I won't even start to get into that one here

To put it simply....I cannot do now what I could do a few years ago without a lot of potential issues and headaches.

So...I hang on to the ones I have but don't accept new non-resident aliens unless all the income is excluded by treaty.

The guy I wrote about (told him the IRS has reps that get paid to help people with self-prepared returns) did get back to me. He told me it was hard to get thru due to high volume...and I deleted his e-mail without a response.

I think the trick is to perhaps, after you are sure they want free advice, guide them to IRS asap.

Once you give someone a tidbit...he will come back asking for more....until you say "no".

"Friends and family" is tricky if they want a freebie. But, sometimes you may think they want a freebie...and they are willing to pay. That happened to me once...after doing a friends return for free for years. One year I just said that I needed to charge her to cover my costs...and I charged her minimally. She didn't complain.

With another friend I'm just blunt and say that according to IRS regulations I am not allowed to give advice....only because this woman picks my brains about beating the system....and constantly gloats about what she gets away with (not tax specifically...but things such as "finding hair" in her food at restaurants etc).

>> I was very happy with TaxAct...and plan on using them again.

I had tried their prior year demo and it is good if you only do 1040 forms. If you do 1041, 1065, 1120S as i do you have to buy additional programs because their preparer version does not include them.

I am not sure what they are charging now but when you add up all the additional cost, and also they charge for e-file the cost was very close to what ATX was charging those days.

I think for someone who does less than 100, 1040 returns, it is a viable option.

I do about 300...but only 1040s.

It is very user friendly....and if it's something unfamiliar the program walks you thru with the questions. It's basically the same thing the civilians use.

With TRX...and whatever programs they were using....it assumed you knew everything.

They are charging @ $600 this year for a bundle, depending on the features you get.

If they had the 1040-NR it would be perfect....but, by not having it, I'm avoiding a lot of potential headaches.

You should have a SAVE ME buddy, I get many calls for free advice, I have an office so all my calls are via the office phone, I don't use my cell phone during office hours, so what I do is I text my good friend "Save me" and she calls my cell phone right away. I put the cell phone to up the telephone and tell whomever is on the line, I need to let you go, I have a very important call I need to attend. Then I just simply thank my friend for saving me, works every time.

Cute...I do that for my husband because he doesn't know how end conversations.

But, this is by e-mail. I feel kind of bad, because I know they need every penny....but I don't want to end up with more "free referrals".

I get enough "call her because she's cheap" referrals as it is.

I used TaxAct before I got involved with TRX. I switched only because TaxAct doesn't support 1040-NR.

I went back to them after the TRX-Fiasco of 2012 (I wanted to cut back on 1040-NR returns due to various reasons...so this was a great excuse).

I was very happy with TaxAct...and plan on using them again.

Last season I did a very simple 1040-NR for someone in RI.

Long story short....she gave my name to someone...who is trying to amend his girlfriends 1040-NR, which was done incorrectly.

Now the bf & the gf (not my client) are both unemployed and need every penny. The additional refund is about $300. (My fee would probably be about $150-250...depending on if the state is involved..which it probably is).

That's the background.

The bf has been driving me nuts asking for free advice. I did a "sample 1040NR" (with the real numbers)...and told him exactly what to do on the 8843...although he didn't to what I said.

Now he sent me the 1040-X to review....completely wrong.......and I told him that the reps at IRS get paid to help people who fill out their own returns.

He also keeps asking me about getting her FICA back (I never saw the W-2...I don't know if it was even withheld)...and I've told him many times that I don't get involved with that because the IRS makes it very difficult etc (I haven't need to to one for a few years...and as I recall...they wanted all kinds of documentation).

Oh....just another vent!

But, what do others do when asked for "free advice" that becomes way more time consuming than doing the return? (And it's a slap in the face to the paying client who gave him my number too.)

A former client of mine called me about two year, to see why his co-workers were getting huge refunds and they made the same, and how come he was getting so little back. I calmly told him, please bring a copy of their tax return to compare them and I will tell you the reason, not happy he asked his workers why they were getting large refunds, and they invited him to visit the Tax Lady (I am not kidding on the name of the business), after he visits the tax preparing couple, he calls me to ask if he should do it. What they were doing was inflating unreimbursed employee expenses and pretty much cooking the books on Sch A, I told my former client, don't do it, one I won't be able to help if you get caught, secondly you could go to jail etc.... Anyway, last year out of the blue, he called me to thank me for discouraging him going through the amendment of his tax return, everyone at his work was caught, were summoned to appear in court and what have you not and they were in deep doodoo. And guess what, the Tax Lady didn't exist because they never signed the amended tax returns.

I had a client I'll call M. I did her return for a few years and she was getting EIC. She got a raise. No more EIC...so, as you guessed, she wasn't happy and took her papers back.

Two years later she called me....needed my help. She went to "the man" to do her return and now she was getting audited. But, she couldn't locate "the man".

The woman is a nurses aide...and here's what "the man" did:

Schedule A....$10,000 for use of her car (she doesn't even drive)

Capital Loss.....$3000 loss...on the 1040, page 1....but no Schedule D (she had no investments)....done to lower the income so she could claim EIC

Her original return was e-filed...and when I was amending I asked the rep "what about the original preparer"...because his name and I assume real # was on the return. The rep said probably nothing would be done (this was just talking to him....nothing official).

Sad but true, that's how most see us. Remember back when the IRS 'corrected' the withholding tables, which had a significant excess built in? HRB immediately started advertising to come in and they would help you adjust your withholding FOR FREE! Why? Because they knew if people got less withheld they would not over-withhold = smaller refunds. And that would make their clients unhappy to tax time.

Remember that $400 (I think it was for 2 years) credit a few years ago....and then the refunds went down the next year? And we had to explain why the refund was less even though nothing changed.

The IRS can make this so frustrating.........

I always explain this by:

The tax is the tax. (emphasized)....and I show them "the line".

If you have too much withheld...you get it back.

Not enough...you have to pay in.

But....the tax doesn't change....no matter how much you have withheld.

It's all a personal choice.........you pay sooner or you pay later

I also get...."My friend gets blah blah blah.............." and I give the "everyone's circumstances are different". Then I give a brief overview...but end it with "due to privacy issues I cannot tell you exactly what is on your friend's return."

When people owe money I tell them they should be happy because it means they made money!

It has more to do with us being psychologists.....and determining what's right for each client.

I've had many "happily married" couples wanting to know how much is each ones claim to the refund or payment due.

When you factor in the state, this is quite a task.

The only "advice" I give is to tell them which one is having too much/too little withheld. As far as "splitting the refund", this is not my problem.

As far as Taxed's comment about too much withholding in lieu of a bank account:

I do tell them that they are giving the govt an interest free loan...but nowadays they aren't getting interest anyway at the bank. If it happens again...I don't comment.

Just getting that big check makes some people happy...that they will have a lot of $$$ for something instead of drips and drabs that they will spend.

Everyone has their own philosophy....

However, this is actually good for us....because they think we are so smart to get them huge refunds.

Tabby, the problem with doing as you suggest is not that the client goes away happy, it's that the client goes away believing that the item WAS deductible, when you should have educated him/her on why it was not. Not only for future, but also so they don't go around telling their friends "my tax preparer said it was deductible". Which, by putting it on that Sch A, you in fact did do.

I'm not talking about something that IS deductible, like our fees, work boots, or union dues. Sure, we all do that, if we are smart, just so the client sees we did take them into consideration. I'm only talking about the temptation to put on something that IS NOT deductble.

I probably wasn't clear with my post....(It's not tax season and I'm out of practice).

I was talking about things when the client insists to put them down, even though I know it will not affect the return. (To be honest...it's been a long time since I've "forced an A". I run "a dummy A" and tell them it won't affect anything, and they are generally OK with that. Sometimes, if they ask, I'll send them a pdf of "the dummy" so they can see for themselves.)

Such as: The handyman who makes $30,000 and wants to deduct his bike. I tell him if he can relate this to his job, I can put it down. But, if he wants to put down "the suit he bought" for an interview, I don't include. (Oh yes...how many people want to deduct business attire because they wouldn't wear it for any other purpose????)

I shouldn't have used "the ring" as an example....poor choice on my part. But, that was a true story. However, that guy wanted to put down so much nonsense I gave him his papers back. In thinking this over....I do have a high rate of "giving papers back". I'd rather NOT have the client than have an unhappy client.

My bottom line is that nothing is in writing that makes me look like an idiot.

This is not my experience, but a CPA referred one party of a divorcing couple to me because she said Circular 230 prohibited her from doing both. Again...I am not claiming to know this officially....just my friends reason for "outsourcing".

On the other hand, I did both parties of a very friendly divorce....but MFS was not involved.

Loss of student loan interest deduction for a single person is another sore subject once their income exceeds 65K.

Yes...and in NYC (where I live) 65K is not considered a high income. Then, we also have to explain "phasing out" when they accuse us of not entering the correct amount.

It's not so much "the myths" that are problems....but the rules that apply to some....but not to everyone.

"Oh, thanks for showing me that.

Next year I'll buy a ring AND a boat.

That'll be more than $12K and I can deduct 'em both. Right?"

Only if you're an entertainer on a cruise line, and need to supply your own ship.

Seriously....I explain that things need to be related to their jobs. I would never put down a non-deductible expense such as a ring....it would have to be something that in some universe could possibly be a deduction. For example...if someone bought an IPAD....there is a universe where it can be a deduction.

Or...how does one handle this?....and I'm sure everyone gets it:

Someone donates an old car...and they have the proof...and they were told it's a deduction. The value of the car is $2000....and they want that deduction! But, the client is a cashier who is HH and makes $25,000. Generally the client doesn't know what a deduction is .....but thinks it's a credit to directly lower the tax.

My biggest challenge...who I did have to fire....was physician making about $250,000...but, she was an HH putting her 2 siblings thru MIT....and she wanted that education credit. After 2 years of explaining that her income was too high...I "outsourced" her.

Seems that my naysayers missed these key words....

No...I didn't miss the key words.

I was just explaining that the client may know something that the preparer doesn't....so a challenge doesn't bother me.

If it's to take a stupid deduction, such as: "I bought a ring...can I deduct it?"....if the client insists, I may fire him. However, sometimes "the ring in question" wouldn't affect anything anyway...so I might put it in and show it to him..but the standard deduction is still greater. Everyone's happy...........

I believe that if people are divorcing, the accountant can only do one MFS...because of a conflict of interest.

Since they won't file jointly...tell them you can only do one of their returns.

As others have said, don't get in the middle....or you'll end up being a marriage counselor.

If I had to choose, I'd pick the one that I communicate with the most.

You can refer the second one to another preparer.

When they come from 5 year+ clients, I have the right to laugh that they thought other people knew tax law better than me.

Like I posted before... The second time that a client challenges me on an issue of ethics or following the regs, I fire them. I have not spent all the years and expense to become a professional to take lightly people insulting and impugning my integrity. (I am sure jainen will jump in here...)

I don't mind if a client challenges me because I don't know everything.

Just this past season I had a client with NJ/PA...and I was unaware that the treaty between those states gave credit for local taxes in addition to the state tax (or something like that). Client told me "her friend said......"....and since I never did a return with this scenario, I checked it out, and the friend was correct.

I'd rather be corrected and lose the client than have the client submit an incorrect return....just to save me some embarrassment.

You know....I'm not finding any problem with the majority of your clients questions.

This is rhetorical, but, why do you think your clients come to you? If they knew "the rules" they'd do their own returns.

It's part of my job, and your job, to explain what you're allowed to do and what you're not allowed to do....not judge or critique for mis-information and/or being uninformed.

I'm sure all of you have asked professionals questions that seemed stupid to them....but important to you.

One my favorites..."are you sure I can't deduct that because my barber (or brother-in-law, friend, etc) said I could". Well then have your barber prepare your return and I will cut your hair! You won't be happy with either one.

To be fair to the clients, they come to us for advice about things they don't know, and the only "stupid question" is the question not asked.

However, when they tell me "their friend/barber said........." that's where I draw the line.

For example...one woman...doing her taxes for years. In 2011 she forgot to give me the 1099-R for an IRA distribution. Anyway, she also had 2 Schedule Cs that year for unrelated businesses. The IRS caught the missing 1099-R...and asked her for the tax due.

My client told me.."I have a friend who does tax returns. She said that the 2 Schedule Cs were the reason for the audit. She said that putting more than one is a red flag."

The biggest reason I've heard from my IRS contacts is that so many experienced people are taking retirement. And the new hires are just not ready to be given free rein, yet, but are being thrown into the fire anyway.

Yes...I had an issue a couple of months ago...and the rep admitted she was new and didn't know what she was doing.

And when we're "on hold" for 20 plus minutes...unable to talk about anything....the IRS employee probably sits there, completely unproductive.

Wouldn't you think the IRS employee could go on to the next caller....and then call us back after he/she receives our fax. Or, at least have some system where there is a callback by a rep after the fax is received.

Maybe they need to "work smart" instead of sequester to maximize the resources.

I'm thinking that collecting this person's data by use of the "in care of" address might not be a good idea. KC, maybe your musician client was more responsible than this comedian of MsTabbyKats. She's already shown herself to be delinquent in providing records. What if she failed to give MsTabbyKat's address to a few of the gigs along the way? Then there'd also still be the issue of getting some documents (1099s or W-2s) from the client, and it still doesn't help with accumulating data for the expenses related to the gigs or the numerous stock transactions that this person had.

I only allowed one client to use my address, and it was for a trust with 2 very elderly trustees that summered here, wintered in Florida. The trust activity came entirely from one brokerage account, the broker was local, and the broker had the client's permission to provide the information directly to me.

I'm also wondering if the MI preparer had this client's written permission to send those client documents directly to another preparer instead of returning them to the client. I hope he had copies in case those were lost in the mailing.

I don't like anyone using my address. Neither does my letter carrier; it gets him confused! I used to let my "non-resident aliens" use it when they went back home...and now I get all their notices for jury duty.

The comedian was more than happy that the guy in MI sent me "her stuff" since she never bothered making copies before she sent it to him. He made copies. She was actually afraid he wouldn't send them to me because he was so fed up with her.

Stock transactions....about 980 of them qualified for "see attached". The other buys were on her 2009 & 2010 brokers statements, which I had in my files.

As for the income and expenses I don't know about at this time....as my dear mother used to say...."we'll cross that bridge when we come to it". But, as with most entertainers when starting out...the expenses generally are way more than the income.

For 2014 I'm going to have her keep a spread sheet.

I often keep it even simpler. I frequently just conference the client in on the call so they can give verbal OK for the agent to speak with me. There are, of course, situations when I don't do that, but they are the exception.

Excellent idea....in these "days of sequestration".

Oh...life used to be so simple......