JohnH

Somebody probably promoted it to her as a great way to save money by taking "tax losses". Lots of these direct sales and MLM schemes play on that idea and people are gullible enough to fall for it.

What about inventory at year-end? Just because she bought it doesn't mean she sold it.

Any bets on which way Tax Freedom Day will move in the coming years? I'm thinking it could eventually be around July 1.

I love procrastinators, as long as they're cooperative. They help support an income stream after Apr 15 - revenue I wouldn't have if not for them. Not a bad deal, especially right now with so many people being out of work. I've thanked every one of them whom I've heard from in the past week or so.

How true! It's amazing how many people have been getting grapes stuck up their nose lately. Thanks for reminding us of this important issue, Mary.

Response to repeated calls asking: "How's it coming with my tax return?" "Sorry, but every time you call I pull it out to look at it and then it goes back to the bottom of the stack. Guess we'll have to go ahead & file that extension now."

If the individual wants to go the "misclassified employee" route, just be sure to ask how important the job may be to them in the future. If they never want to work there again, don't mind getting fired if they're still there, and if they don't have any family or friends working there whom they might get into trouble, then this route might be worth saving 7-1/2 %.

Prospective client: "Do you charge to answer questions?" Me: "The answer to the first question is free, but there's a charge for the next question and everything after that." Prospective client: "How much do you charge after the first question?" Me: "$120 per hour with a one hour minimum. What's your second question?"

I ALWAYS file an extension, even when no tax appears to be due. If something unexpected pops up later, you have no excuse for not having filed the extension. A piece of paper is pretty good insurance against an ugly surprise. I filed an extension today for someone expecting a refund of over $4K. But if he calls me up a couple of weeks from now and says "I forgot to tell you about that $25K early withdrawal form my IRA", I won't be doing any explaining.

The problem is, you can never document things well enough to stay out of trouble with someone who's looking out for an opportunity to make a quick buck off someone else. You'll spend all your time doing CYA, when that should be billable time on good, decent clients.

Any time someone jumps to the possibility of suing someone else for their own stupidity, I head for the exits. Especially when that stuff comes out early in the conversation. They're just looking for an opportunity to cash in. When their mind works that way, I assume it's just a matter of time before they will be looking for ways try to get me involved as well. People like this are nothing but trouble, and the worst thing you can do is accept money from them for services rendered.

Thanks for all your effort KC. Hope this is a wonderful birthday for you and that you have many more of the same.

Just a gentle reminder - birthdays are an opportune time for presents. Might be a good opportunity to click on that "Donate" button if it's been a while since the last time.

They are intentionally confusing. Too much easily-readable information is bad for business.

Do you think it's possible that every now & then a client actually knows the bad news and they are just playing mind games with us for the fun of it?

I don't tell them an extension of time to file is not an extension of time to pay. I tell them it's TECHNICALLY not an extension of time to pay, but as a practical matter it IS an extension of time to pay at a 1-1/4% monthly rate that approximates an APR of about 14%. A rate that's more than the cost of a HELOC, but less than most standard credit card rates. And no matter what happens, it won't ding your credit. For some people, that's an acceptable compromise, especially if they just don't have the money right now. But my most common reply right now is "I know you don't want an extension, but the only way your return is getting filed before Apr 15 is if you take it to HRB, JH, or Liberty. Do you want your stuff back?"

Or they can just skip the 2009 distribution if they wish and not have to worry about 2 taxable distributions this year.

Did the financial advisor make any suggestion about how much tax she should be paying? After it, her tax liabilty is a finite number and if he thinks it's too high, then he should be able to provide another finite number for an amount that won't be "too much". Ask her to get him to write that number down and you'll look over it.

Plus, they could still sell the truck and have the money to pay the taxes, plus maybe enough left over to buy a cheaper truck - one that they could afford to own.

I understand your reasons for wanting to break the news in person, but I'm just the opposite. I call them on the phone or send an email, accompanied with the message that I realize this may be a shock to them but I want them to have the info as soon as possible so they can begin to prepare for it right away. I then offer to give them all the details when we meet. If the circumstances warrant it, I usually try to make the point that they had the use of the money during the year, and that whatever they spent it on would not be in their possession now if they had paid the taxes when due. I also point out to them that they might be able to sell the boat, motorcycle, car, house, etc that they bought with their tax money, and that would make them better able to pay the taxes. When appropriate, that usually focuses their attention where it should be, because people will go to any lengths to avoid giving up their toys.

Are you sure the expense paid by the employer to the moving company is grossed up on the W-2? That would be highly unusual, especially since these relocation companies promote their services partly on the basis that they know how to handle these things from a tax standpoint. I've never seen a statement from this particular company, but I have seen a few that were a little hard to read. And I believe the only reason the moving expense would be grossed up would be in a case where the moving expense didn't qualify as being tax deductible in the first place.

Excellent suggestion, and good timing as well. I just sent another donation as well.

American royalty also has servants to dres them and do their hair. If you don't believe that, just ask any of the Kennedys.

I was researching a question for a client who serves in the military today and I ran across a blog where someone is speculating on what should be deductible. Thought I'd share them on this forum - maybe you'll get a chuckle. (with thanks to Jeff Bacon and his "Broadside Blog") Love handles. Today’s military is computer intensive, and those things grow like breakfast biscuits from sitting in front of the screen every day. I don’t know about you, but if this were a deduction, I’d always get money back. Emails. In the paperless Navy, it’s not uncommon to receive a hundred emails a day, and unlike civilian email, you can’t hit a SPAM button on military stuff. We should be able to claim a loss of productivity, with a bonus deduction for time spent shuffling paper that never went away. Acronyms. Time saved by using acronyms and initials instead of actual words should be deductible. All that extra productivity should be acknowledged ASAP. Home office. You can claim a certain percentage of your mortgage as a business deduction if you work out of the home. What if your home is a ship? We live and work on the ship, and we pay for the ship with our taxes. A carrier costs something like $6 billion. You do the math.

Are there short-term gains in the mix?