Is there any software that has ALL the forms? I doubt it. As I'm sure many of us have done the 8919 (taxpayer claiming they are not an independent contractor when they have a 1099) I finally got to see the "other side", when an employer now has to reclassify workers as employees due to the 8919.
Form 8952, plus correcting 1099's and issuing W2's, plus having to do quarterlies, (both federal and state) and year end 940 (federal unemployment). Luckily we do have payroll software, (Quick books), but it would only print current year quarterlies. Had to go to IRS.gov and they do have printable forms for past years, but of course there is no way to save them, meaning I had to print 3 copies. One to mail, one for client, and one for us. Client needed to go back 2 years. After seeing the work involved to reclassify workers as employees, I wonder how often this happens because an employer doesn't understand the difference between employee & independent contractor. Getting "caught" is not only time consuming but expensive!
Long before I heard of Karl Marx, I had a conversation with a guy about everyone should make the same pay, as everyone on the "team" was needed. He was a sailor and said without the janitor or the cook, the Captain wouldn't have the time to run the ship, making the janitor and cook as important as the Captain. While I could see his point, logic told me everyone would "settle" for being a janitor/cook as it came with less responsibility. I asked him how he would get people to want to be the Captain? His theory was that after years of swabbing decks, people would naturally want a better profession and would go for it. I often wondered if college kids go to college to "follow their dream profession", or just to earn more money. Do they have a heart felt need to be a teacher, doctor, lawyer, or do they pick a profession that has the higher pay? I read some where, there is only about 10% of any profession that is tops in their field of work. If that is true 90% are mediocre, and that would be sad if they're only in it for the paycheck. I guess the answer would be "would I do this job for free if I didn't need money?".
Luckily most people need and want more, and because of it, most will reach their potential in the work force and climb the ladder soon as they get tired of swabbing decks because of the reward of more pay.
Then you were very lucky that you had employers that saw your value, making you feel good about your paycheck. There are many employers (look at illegal immigration) that rather have cheap labor.
Your $12 may be more realistic than my $15, since it's a seasonal part time job. I just see how much more people need today than my generation did. SO much more mandatory expenses (car, health, renters/home insurance) and having a cell phone, Internet and cable TV shouldn't be considered a luxury in our current way of life. I never saw $4 a loaf of bread coming, nor $4.99 for a pound of grapes, or $12 pound for a steak. (just replaced my 4 year old refrigerator, as replacement part and labor wanted over $700) I couldn't imagine $10 movie ticket prices, or $7 for a bucket of popcorn, where a family of 4 could easily spend 50-60 bucks to see a movie, not even a double feature for that price. It does cost money to work, from transportation to having the right clothes, and for some folks child care. For the folks that ONLY have this part time seasonal job, let's face it, you and I will subsidize their income with food stamps and free health care, and EIC because of the current cost of living! AND these are people ready, willing and wanting to work.
With many Block and Ex-Block workers posting here, out of curiosity, and just for the fun of it, what do you think a fair hourly wage should be for 1st year preparers, and how would you recommend raises? Based on seniority, or on how many tax courses one takes (and passes the test)? Would you also include a "bonus" if they passed a goal of number of returns expected (by number of hours worked) or do you see that as another piece meal payment that would tempt them to take on returns over their head? Personally I think $15 should be the starting wage after 66+ hours of unpaid training, and they should be considered "still in training" their 1st and 2nd year.
I must give Block credit, that they did come up with "special niches" for their experienced pros. They did make us aware of who was best at doing the more complex returns, and any one getting such a return should pass the client on and not struggle with it. It was an excellent idea except for the commission based pay. Giving up the return COST the preparer money, when they already had time into the interview, and there was NO clients in the waiting room, the temptation to just do it and ask for help later made sense, OR just selling POM knowing any error would be covered gave them a sense of security that if they did screw up, it wouldn't cost the client. Working for "piece meal" pay it was just too easy to justify taking on returns "over their heads", hoping the diagnostic would tell them what they might have missed. PAY checks do matter, it's the one thing Block keeps getting wrong and why they have such a large turnover.
While I agree Block's 50% off promotion lowered pay, I'm sure management looked at it as $75 beats zero to get a new customer in the door, that would not have come in without the promotion. "In the old days", Block would give the client a certificate for 50% off, yet base the commission on the full price, where they took the hit, and not the workers, and that's how it should have been done!
One of the first things you HAVE to do to increase pay is learning when to be available. ALL tax services have what is called "dead time", until you build your own clientele and fill your working hours with clients that ask for you. Knowing what office to work at also helps. Some are higher volume than others. If you haven't filled your calendar with repeat clients in March, when there are fewer walk-ins, you're sitting there lowering the hourly pay you already earned during peak, as you're "drawing" hourly pay against it. It does take years to build a following, and years to train a client to ask for you, as many are loyal to Block, but believe all preparers are the same and it doesn't matter who they sit with. The best way to build a client base is letting them talk about themselves and being a good listener. Learning to type and talk at the same time also helps, as they're not sitting there staring at the walls, getting bored. Next is to recognize which clients ONLY want the bottom line and want it in 10 minutes, and what clients expect more time and attention, and expect you to explain every line and question they have. Taking the time to ask them about "next year's expected income" and changing their W4 if needed, they'll almost always come back to you. I had a 98% retention rate when I left Block, and many of these clients found me and are still with me today 11 years after leaving Block. My hourly pay was $41 when I left. The money is there once you know when to work, and how to built your client base.
Block did screw itself on making a "bucket" payroll IMHO. I remember the first 3 hour class when they ended 1% of volume for each year up to 10%, plus 20% of everything over 3K, where we all left totally confused as they sold this as a pay raise! It was comical as they were talking to people that are good at math, and realized NOT collecting on 100% of volume (went down to 93%, then down to 89%) was a pay decrease. They said the new higher prices would work in our favor. Well how does that work, when they give FREE 1040EZ's, or offer 50% off last year's price? Block has been very lucky, most pro's love the job, love and have loyalty to their clients, and Block has used that loyalty to built that fancy building in K.C., paying dividends on their stocks, and keeping shareholders happy. Having to give a class to explain pay should shame them all.
Tax prep should be more professional than getting paid piece-meal.
CF don't know why you got a thumbs down for that statement. I may not work for HRB any more, yet realize there is NO other tax prep company that is even near their output. They have the name recognition and plenty of 10-20-30 year preparers & EA's coming back every year. Their classes are what I miss the most. I know for a fact their marketing this year of doing new client returns for 50% of last year's price did take a few of my clients away, since they called me and asked me if I would match it. I said NO, it was apparent I didn't have client loyalty and I didn't want to price haggle every year thereafter. It should be interesting to see if they return next year when they see how much higher Block charges. Since my numbers were UP, it was worth the risk.
Valid points, wishful. Back when I started off season, my main job was housewife with kids in school. Its why I taught every class they would let me. After 1,000 hours I was included in profit sharing (went away before I was vested) and allowed me to sign up for the 401K, and had vacation pay too. I didn't want to take another job as I knew I would be back season after season, and working off season was one of the best ways to gain new loyal clients. It also gave me promotions, to Processing Supervisor, then a year at Bookkeeping till I realized I missed the client contact and became an Office Supervisor. (which paid 1-2% of the store's volume) and was a nice pay raise, since I had the main office which was high volume.
I felt I NEEDED off season, to be aware of the kinds of errors we were making, and taking on more complex returns, that made me a better instructor. I would have worked for free for what I was getting out of it. Same with instructor pay (which was low), but so rewarding to watch students advance, get hired, and come back for more. Block had exactly what I was looking for with the every changing tax codes, and the constant learning of new stuff. Under Henry and Richard it was the perfect job, where I felt valued.
11 years ago, I had to wake up that it was NOT Henry & Richard's way any more, it was just another big company that only valued money, and would short change its workers and offices and wanted a "sell rate" to be a valued employee. I gave up off season work when they started to hire District Managers that had NO tax experience, never ran an office, and told us to sell POM or be fired.
If you ever get a chance to work the off season for Block, take it. I believe it only pays min. wage, and there is no "bonus" for returns done, but it's an eye opener dealing with all the IRS letters. Many letters with an amount due, will turn into a refund after a good interview, and more deductions are found for Sch A, E or Sch C.
Many will lead to having to amend all 3 years, cause newbies miss a divorced spouse claiming the children for EIC purposes, when children lived with her & the other parent is claiming the children as dependents (court ordered). Newbies also miss form 8917, to pay only 1/2 the SE tax when they want to dispute being self employed, cause the employer set the time and work schedule. Sale of rental property and coding 1250 or 1245 property has a big impact on the 4797, as does the causality loss in a business verses personal loss.
While I agree IRS doesn't have the ability to find many errors, and many times IRS is wrong (they sent me a bill in 2009, with no explanation and it took 9 months and talking to 3 auditors for them to explain why I got the bill. First auditor told me to just pay it. They took my IRA contribution away saying I had NO income, which was "fishy" as wages are marked T or S with SS#'s, and the return was e-filed).
I've also seem 3 IRS letters saying "if you're content with your return, do nothing", (its a form letter, longer than that, but that's the main point) that usually means they have something on the return that could mean a higher refund. Usually it's missed EIC.
Errors on returns could just as well have a refund, then a balance due, and who knows that better than HRB. Its why they do a 2nd check of last year's returns. They use to pay us $5 extra for amending last year's return when we caught an error on a return done by other tax services or self prepared. It gave them "bragging rights"!
David, that's sad, but I know you are right. When I was office supervisor I did all the QPR's, feeling it was my job to "protect" the reputation of my office. (With over 20 years experience, and having worked in the quality control department, and as an instructor, I felt I had the most qualifications to find potential errors). When Block changed from OS to office coordinator ($10 an hour) and hired first year preparers who were incapable of doing QPR's, we were told to just "run the return start to finish and add a coworkers' employee number as the QPR person that checked the return!" One of the biggest errors I found was on 1099R's when box 2 was blank, and the box tax amount not determined was checked, newbies would make NONE taxable. Moving expenses were given to retirees, and OIH expenses were put under direct cost, instead of indirect cost. Depreciation of 27 1/2 years instead of 39 was also a common error for OIH. (Computer now corrects that). BUT, many errors were made in writing off a new a/c or hot water heater as a repair! And some 1099 misc. were put on line 21, instead of Sch C, that avoided SE tax, and put expenses on sch A, when it was not a hobby.
New clients were short changed when they didn't bring last year's return and had carry overs on Sch D or passive activities, or an NOL. Newbies are not fully trained to even ask the questions. I personally want last year's return for all new clients, and if they don't have it I'll explain why, and try to refresh their memory.
Newbies have no idea what to do with 8582 carryover, and ignore it. Doing QPR's I had to call many a client for more info. YES, it was time consuming, but so needed to be done. There is nothing worst than having a client get an IRS letter owing more money due to a preparer error. From what I understand newbies have a high POM sell rate, making them more valuable to the company than an experienced preparer?
You are correct, hand written returns usually had a 3-6 day turn over. The best of the best worked in Quality Control checking these returns making sure every T was crossed, before it went to the copy machine and was assembled. I know all my coworkers were uncomfortable the first year we interviewed, wrote, printed, assembled and handed client the finished product at the same sitting. It took getting use to not having a checker backing us up. Clients who chose the RAL product, for it's first couple years, did get checked, as they had to be typed in at an e-file computer. YES, there were rejects for errors, making us all angry, wondering why the return was OK in our computer, but error ridden by the e-file computer. WHY didn't we have the same software?
As software improved, and diagnostics got better and better, we got our confidence back.
With proforma the 1-2 W2's with EIC returns could be done in under 15 minutes, as long as one could interview while typing, and didn't have to look at the key pad. We got "slammed" for that! Block got complains about the price with less than 15 minutes of work. New rule was 1 hour per client, but it was a "wink wink" when it took less. Most clients during peak were the high refunds and clients ONLY wanted the bottom line. I worked in a heavy traffic office with 13 stations, and we still had lines out the door.
After 1st peak came the shoe boxes of receipts and the "what if" questions. These clients were not in a hurry, and if it was a lot of typing, they got a 2nd appointment, as we had only allotted them one hour. Most clients like that. We do a high volume of drop offs and one gal does returns over the phone, using the fax machine and emails, where the client has a quick visit to come in sign, pay and leave. They love it!
The tax business is a "weird" business, that does take getting use to. After the 1st year or two, preparers become aware of "dead time", that can and does lower their over all hourly rate of pay. As hourly pay is just a draw against final pay, it's possible to be up one day, and down the next because of dead time. To make top dollar a pro needs to build their own clientele that will request them and fill every working hour. Most pros know this and are very aware of when they'll be available to be scheduled.
I am totally against not having reference material out in the open. The message Block gives is "you just need a computer" and is great marketing for Turbo Tax.
Cleaning the bathroom, emptying wastebaskets, are such minor duties that I honestly believe we should do, making the office as clean and inviting as possible, since it is our work area and reflects on us.
Dealing with the OM, never forget your power. Block can not just hire off the street, they are hard pressed to replace you (unless they over hired or you're a real dud). Once you show your worth, they need you. I had one OM tell me she was now in control and I would do as she demanded. I told her if she demanded more than I was willing to give, I would just call out sick on a busy day and leave her short handed. We got along just fine after that. Same with my DM, who said if I didn't like the new rule I could quit........... Told her that was fine with me, did she want me to leave now? Sputter, sputter, sputter...................compromise!
1st and 2nd year preparers have to look at this job as an apprenticeship. Take the good with the bad, make themselves useful, build their client base, take every tax course offered and get the experience and confidence to know their value, not only to Block, but to the many other tax companies that love to hire Block trained pros.
As far as prices are concerned, (yes some are too high) the more you value what you do, the more you realize you're worth it.
Block has the mentality that computers and 1st and 2nd year preparers are their money makers. Its one reason they have taken all reference material out of the office. Blocks wants clients to believe that every preparer has 100% tax knowledge. Pros know that's impossible. Pros will spend time with their nose in Quick Finder, or at the IRS website, or "pick the brains" of a coworker not because they don't know the answer, mostly to reinforce their own knowledge because the situation is rarely used, at least they are aware the situation does exist.. 1st & 2nd year preparers aren't even aware of all the forms available! If they report a rental sale on Sch D instead of 4797 would IRS even catch it? If they add mileage and food on Sch A, without using 2106 does it matter? (only to Block who lost the price of that form, but aren't aware of it). So they pay the newbie 10 bucks an hour, (or less from what I heard) and who knows how many forms the newbie skips? Block only sees 2 cheaper labor newbies can do the same number of returns as one pro, who's capable of making 25+ an hour. Greed wins, which makes me wonder if Block has setled for only wanting to do simple returns, and is throwing the high end clients away every time they lose another experienced pro, thinking they don't need them!
Dusting off the "good clothes", putting sneakers and sandals in the back of the closet, bringing the professional shoes to the front. Ordered Quick Finder, took 3 tests, got certified, paid for pin renewal, and its time to head to office for all those practice problems. Its almost like a winter sport with much to do before reaching the start line. What new rules, what new forms? How much do I have to forget, and how much do I have to learn? Cases of water & soda needs to be ordered, we know the UPS delivery man's name as cases of office supplies arrive and the back room fills. Pre-packs need to be put together, last years returns put in boxes, making room in the file cabinets. Catching up with co-workers, choosing our schedule, putting out pens and business cards and making sure the candy dish is full. The phone is already ringing, all 4 lines light up, mostly asking "how much do you charge?", or "can I file with my pay stub?" or "how long till I can get a refund?" YEP, it's a sport alright and may we all be blessed to make it to the finish line. 99 Days to go!
Cheaters cheat! Laws don't seem to bother them. Heck they'll help them make a written log and keep it on file if they feel the need. There is no way to prove a child is a niece or nephew, last names mean nothing. Its the way the tax codes are written that causes the fraud in the first place. How do we know, or how could we prove the husband moved out of the home in June and not Aug? When it comes to HH or married filing separately I think these folks are totally "street smart" in knowing the June deadline. Self employment is growing. There really are baby-sitter, and household workers, & lawn keepers that now file because of EIC, where before they considered it "under the table". It gives us way too much credit to think we can single out the liars by a long list of questions when they already know how to answer!
I have taken in a street kid, who's parent abandoned him, and I found him sneaking into his friend's houses at night, just to be able to stay in town and finish high school. Guess what? His Mother claims him and the other 2 kids she abandoned at her sister's house for the EIC check. She hasn't given him a dime or a birthday card in 2 years, and asked him for money after he got a part time job, and left him with an $800 cell phone bill, after getting it in his name and not paying. (He's paying it because he wants to join the military and needs good credit) He's asked me not to turn her in, he still loves her, and is hoping for a reunion some day. I have to respect him enough not to get his Mom in trouble, but I do hate the fact she lives 80 miles away from where the kids attend school, and IRS doesn't notice there is no way they could be living with her.
I agree with losing RAL clients when the next day check went away, and I know we also lose EIC clients that didn't know the "answers" to all the due diligence questions. Once it's explained because of this or that answer they didn't qualify for EIC, they would take their W2 back and go else where, now knowing the "correct" answers. With thousands of dollars at stake for the truly poor desperate worker the risk of getting caught is too slim not to take the risk. Worst case would be making monthly payments to IRS, while 3-6K can buy them a used car to get them to work, or get caught up on back rent. I don't mean to imply that EIC clients are liars, as most do qualify, but we do know from IRS that billions in EIC refunds are fraudulent and most will not be caught. Due diligence will NOT stop fraud, just make professional preparers more cautions. Instead of a good interview, IRS wants us to be interrogators! The one due diligence question that has left me red faced more than once is "where is the other parent?"
With the average tax season being 104 days (Jan 2-April 15) and the extended hours during peak, I don't believe an office could run with just one person per each hour open. Plus remember Liberty requires a waver which adds another employee. I can't imagine an office doing 300 returns, being able to pay a whole year's rent & utilities after royalties, wages, supplies and marketing. I don't think 500 returns could do it, unless they were all highly priced EIC clients. (which we are slowly losing since the RAL went away and clients realized they had to wait 2 weeks, and can now do it with turbo tax, and can avoid all the questions we have to ask for due diligence). To do higher priced returns, it means being in a wealthy neighborhood where rent can be outrageous for a new business. The hourly wage is not all an employer pays, with matching SS and unemployment tax it'll add another buck or two to the employer cost. 10 years ago, I know Block required 800 returns to keep an office open, and that's when they had all that "extra" income from RALS. A good experienced preparer can do 500-700 returns per season in a busy office, and will work full time and have over time during peak, I can't imagine them taking a preparer job that offers min. wage! AND, I do believe good experienced preparers are what gives a store it's reputation that helps it's growth, and retains clients. Maybe a little Mom & Pop kitchen table tax service can live on 300 returns with no rent, wages or royalties to pay, but a store front with a brand name? Don't think so!