Why not have the customer sign a legal document authorizing HRB to call the IRS offset phoneline before submitting the RAL to HSBC? It would be three or four minutes of work, but better than losing a client who pays $200 for twelve minutes work in the first place.
"People in several European countries do not file tax returns. They just get a notice from the gov't at the end of the year if they owe, or a check if they don't."
The US income tax laws are much more complex than these European countries. Also in places like Greece and Italy the government does even know what anyone but government employees make. Therefore they are just about the only ones who pay income tax.
"What I don't understand are the folks who think there's one right way that fits everybody. It's wrong to assume everybody in the world is just like me."
Good post. I always get a kick out of the the people that say you HAVE to do it this way or that way.
For many people, getting a big refund is the easiest, and dare I say it, the best way to save up some cash. For example, if someone gets a $3,000 refund, they are really only "losing" maybe $40 (before taxes) in today's environment. Now, what are the odds that Joe Refund is going to put every penny of that $3,000 in the bank through withholding and actually earn that $40? Close to zero. When many/most people get the option of "using the money during the year" they'll blow all of it or at least some of it. In that case, they truly are better off letting Uncle Sam have the money for free and getting a refund. On the other hand, some people (like my father-in-law) calculate the minimum tax he has to pay in during the year without incurring a penalty. And he probably DOES save every penny he doesn't pay in, so he's better off doing it his way.
I remember arguing with a co-worker about my desire to pay my house off early. He thought it was stupid. He would say, "I can make 20% in the stock market easy". I asked him if he had any equity in his own house. "Why, yes I do, over $100K". I said if you really believe in what you're saying, you'd take out a home equity loan and put it in the stock market. The year was 2000 and the stock market bubble soon burst. Fortunately, he didn't take my "advice", but my house was soon paid off and he was blessed with 25 years of capital loss carryforwards, but he was convinced that his way was the only way.
My experience is that many times that I just "know" I'm right about something, I'm wrong.
I also remember my mother had a jar to which she and my father contributed any half-dollar coins they had received in change. When the property tax came due, there was usually enough in the jar to pay it. When was the last time you even saw a 50 cent piece.
ia ea, what a wonderful old memory, thinking back to the Christmas club.
It was a life saver for most of us.
I was taught to take the weekly paycheck to the bank, which usually had a long, long line on payday, & put 10% in savings, which was written in my personal passbook, & stamped by the teller, plus add my few bucks to the Christmas Club. There was also a Vacation club, but I never had enough left over for that.
Taking money out of savings was a NO NO for such "frivolous" spending. There were NO charge cards back then, and personal loans were hard to get.
People didn't get into debt back in those days. Almost all stores did lay-a-ways. Savings was for emergency & medical bills (few had insurance & doc & hospital visits were affordable.) My son is near 50, giving birth in a hospital I had to pay $80 up front for our 3 day stay. Plus an additional $5 cause they gave him a bath!
Getting that check in December was powerful, knowing you could fulfill every one's Christmas wish list. Those "grasshoppers" who didn't squirrel their bucks away each week, sure were jealous of us "ants".
"I can remember my own father putting $10 a week in a Christmas Club in order to get a $500 check in December. I could not understand that as a child; I still don't. "
The thing is, people are all different. If we were all machines then we would be well served with the standard CPA advice to manage our tax situation so as to break even at the end of the year (or even pay some, without incurring a penalty) and earn interest on our money. We would just put that extra $100 a week into a nice savings account like robotic automatons and everything would be honky dorey. But we are not machines. We have different levels of micro-discipline when it comes to every day cash management.
I don't pretend to know what is best for someone else. I explain their options and then I ask them what they want to accomplish. If they need the forced savings so they have the money to take a vacation or buy some furniture, what do I care? I set them up to accomplish that. If they want to invest their money as they go themselves, then I set them up that way.
What I don't understand are the folks who think there's one right way that fits everybody. It's wrong to assume everybody in the world is just like me.
Block wants big refunds. Many customers don't comprehend the difference between a $4,400 refund check and a $4,700 one. Either one will disappear just as fast. I'm a firm believer in advanced EIC, but in 20 years preparing taxes, I've only seen it once or twice. Many of Block's customers would still get a refund if they had $0 withholding and took advanced EIC, but they prefer getting that big check. I can remember my own father putting $10 a week in a Christmas Club in order to get a $500 check in December. I could not understand that as a child; I still don't.
Only about 3 percent of the eligible taxpayers take advantage of advance EITC. (Remember a few years ago when Block preparers presented the program to clients as part of the "advice" the computer spit out? That was part of an IRS initiative to get the idea rolling.) The fraud rate is way higher than regular EITC. Something like three-quarters of recipients either never filed a tax return to account for the advance or filed one and didn't report the money already received or reported the wrong amount. Usually the sums involved are so small the IRS doesn't bother to follow up. Yet some of these cases actually went to Criminal Investigation, like the business owner who signed up his employees without telling them so his payroll tax submissions would be reduced.
The idea of advancing some of the EITC was to put the money in the pockets of recipients to help them with their living expenses. Few want it, so there really is no reason to keep offering it. Employers are burdened because they have to notify all employees in the EITC wage range about the advance every single year.
"Also the Bill Pelosi called the House back early for will eliminate advanced EIC".
May not happen - Sen. Baucus has prepared a proposed amendment to a bill which, among other things, would "repeal" that provision. As I recall, there is quite a bit of money involved in the advanced EIC program so it is certainly more than 4 people who receive it.