Monday, January 23, 2012

Oh, the funny questions...

We get a lot of questions at the tax office at this time of year.

Some are specific: I took money out of my 401(k), am I still going to get a refund? What's this 1099A I just received? Do I have to report that? Will I still get a refund? We had a baby this year - how much more refund will we get? By the way, there are no easy answers to refund questions. We can explain the general trend, but to get specific, we have to run the numbers.

Some are sad:  My son's in jail, can I claim his little girl?

Some are frustrating:  I don't have my W2 but I have my last paystub and I really need my refund now. Can't you prepare my taxes?  Answer: NO!  By law, we can't prepare a return based on only a paystub, we have to have the W2.   I believe H&R Block used to allow their clients to bring in a pay stub and advance a refund based on that. But that was not a tax return, nor was it a refund, it was an advance, a loan. Now if your employer has skipped town and didn't issue any W2s, you can file after February 15 using the paystub figures and Form 4852.

One of the funniest questions we've had is the guy who received a $7000 bonus. He didn't tell his wife about it.  He's afraid if she knew about it she'll just go spend it.  So he wanted to hide it. He had several ideas and schemes for how to hide it from his wife.  He had no problem reporting it and paying his fair share of taxes, but just didn't want her to see it.  Other than filing separately, which would not be to his benefit taxwise, there was nothing he could do, except hope she didn't notice it when she signed the returns.

Don't be afraid to ask questions of your tax preparer.  I'm sure we've heard them all before!

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