mrichman333 Posted February 16, 2013 Report Share Posted February 16, 2013 Just wondering if you have any clients that you would like to smack in the head because of the dumb or irresponsible things they do? I have a few. I just finished doing the 2011 and 2012 return for guy that is married with two kids 14 and 15. He does not own a home, has no medical because his wife is a nurse and gets full medical insurance. So in 2010 he gets bought out of his employment contract and gets his 401K in the amount of $556,465 He keeps $256,465 and roll overs $300,000 He’s only 50, so you know what happens. 10% penalty = $25,647 Well he thought that was all the tax he had to pay on the early withdrawal. So I explained everything to him……… On top of the early withdrawal he and his wife have W2 wages of $141,443 His taxable income was $385,180 His TAX DUE WAS $53,497. He didn’t have it so he got on an installment plan. DO YOU THINK HE LEARNED, NO! In 2011 he calls and has me file an extension then he never came in till this week. HE DID IT AGAIN; he made a $240,690 early withdrawal in 2011 And again did not request additional tax be withheld beyond the 10% penalty. So he now owes an ADDITIONAL $65,092 in taxes. I WANTED TO SMACK HIM IN THE HEAD AND TELL HIM OFF!!!!!!! In three years he blows through AGI of $734,372 and he still does NOT own a home but rents. He doesn’t have any medical expenses/insurance cost that are eating up his money, his kids are in public Scholl. He’s basically broke and I am sure in 3 and 4 years his kids would like to go to college. Would have given him a lecture? I so wanted to but bit my tongue. Do you have any irresponsible clients like this? Quote Link to comment Share on other sites More sharing options...
JohnH Posted February 16, 2013 Report Share Posted February 16, 2013 At the rate he's going, he will be eligible for EIC in another year or two. No sense giving him a lecture, especially since he didn't ask. Of course, the only thing worse than irresponsible clients are irresponsible clients who ask for advice. You know you're wasting your breath. Quote Link to comment Share on other sites More sharing options...
mrichman333 Posted February 17, 2013 Author Report Share Posted February 17, 2013 "At the rate he's going, he will be eligible for EIC in another year or two." good point Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 17, 2013 Report Share Posted February 17, 2013 I have a similar story. But, I've learned not to judge. With my client...it's her life. She knows the consequences. She'd rather live well today than worry about tomorrow. She plans on living off her social security....which won't go very far in NYC! Quote Link to comment Share on other sites More sharing options...
CathysTaxes Posted February 17, 2013 Report Share Posted February 17, 2013 You can't fix stupid. Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 17, 2013 Report Share Posted February 17, 2013 Some things never cease to amaze me. I just wish I had a 401K totaling that amount to wonder about. I agree with Cathy, you can't fix stupid. And yes, I can verify this with living proof. I teach young HS students every day. Any more questions? Quote Link to comment Share on other sites More sharing options...
mrichman333 Posted February 17, 2013 Author Report Share Posted February 17, 2013 Some things never cease to amaze me. I just wish I had a 401K totaling that amount to wonder about. I agree with Cathy, you can't fix stupid. And yes, I can verify this with living proof. I teach young HS students every day. Any more questions? No more questions, I used to substitute. The thing that bothers me is he has two kids, that he could have used the money to send to college, and I suspect his wife doesn’t know he drained is account. But like ya'll said you can't fix stupid. Quote Link to comment Share on other sites More sharing options...
mrichman333 Posted February 17, 2013 Author Report Share Posted February 17, 2013 I have a similar story. But, I've learned not to judge. With my client...it's her life. She knows the consequences. She'd rather live well today than worry about tomorrow. She plans on living off her social security....which won't go very far in NYC! In NYC SS wiil get her a crdboard box. and it is his life, but also his wifes and two kids. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 17, 2013 Report Share Posted February 17, 2013 In NYC SS wiil get her a crdboard box. and it is his life, but also his wifes and two kids. Oh I get it...but you gotta be objective. My client's case...her father was a well known author (you'd know the name...you'd know the title of his book...you'd know "the phrase" everyone uses from the title of the book). She could have lived like a princess for life....but she blew it all....and now if you saw her on the street you'd think she were homeless. In your case, you prepare their taxes...you are not their marriage counselor. But, didn't the wife have to sign the return/8879 for 2010. So, technically speaking she is aware. Perhaps he buys her lavish gifts and fancy vacations....again, their choice. Stay objective........... Quote Link to comment Share on other sites More sharing options...
mrichman333 Posted February 17, 2013 Author Report Share Posted February 17, 2013 (edited) I know I need to stay objective but It felt good to vent. Here is another guy, he’s 65, wife is 63 back in December 2009 he files for bankruptcy just him not the wife, she has NO income doesn’t work. So in December after he filed bankruptcy but before going to court, he leases a Lexus in her name of course for $500 per month and he was driving a 2008 Benz. He finally got his court date and screwed his creditors out $240,000. He wants to “renegotiate” his mortgage and he realized the best way to get the bank to do this is to stop making mortgage payments. He hasn’t made a payment in over two years.. Now this is the part that really makes me bite my tongue. He is always complaining about how difficult the bank is being; how he sends in documents they request and the bank says they never received them. He is almost indignant about the banks behavior. I so want to tell him “people like you are the problem with this country” or “what the heck do you expect the bank to do you’ve been living on their dime for two years” Oh I forgot to add the bankruptcy guy asked if I could do something with my fee to help him out. Edited February 17, 2013 by mrichman333 Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 17, 2013 Report Share Posted February 17, 2013 Dear Mary- I have this guy who's in his upper 60's. His wife is in her 30's. She works. He doesn't. He takes care of the child. Last year he had a 1099-C for about $30,000. I told him he had to pay tax on this. It's income. He got angry. Why? Why? He said the bank offered "the line of credit". I told him..."Yeah...but they didn't make you use it and spend it." Needless to say, he went elsewhere. I hope he stays elsewhere. Life is just too short to listen to this nonsense and irresponsibility. For people like this, I only care that I get paid. And believe me, I am a bleeding heart. I reduce my already low fees if someone is having a problem. Quote Link to comment Share on other sites More sharing options...
Crank Posted February 18, 2013 Report Share Posted February 18, 2013 How about a couple with govt jobs earning about 160k. Three kids who receive SS. They bring over 150K of 1099-C's and claim bankruptcy. Driving nice cars, very nice house, kids dressed like they live in the hamptons. Our tax dollars at work. Isnt the USA great. Quote Link to comment Share on other sites More sharing options...
mrichman333 Posted February 18, 2013 Author Report Share Posted February 18, 2013 How about a couple with govt jobs earning about 160k. Three kids who receive SS. They bring over 150K of 1099-C's and claim bankruptcy. Driving nice cars, very nice house, kids dressed like they live in the hamptons. Our tax dollars at work. Isnt the USA great. Yep, Only in America. It can make a hard working person want to through in the towel Quote Link to comment Share on other sites More sharing options...
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