The deadline for 2006 taxes is closing in. Have you done your taxes yet? If you’re about to run out the door to the closest strip mall taxman (you have your choice of initials) take a few minutes to find out what you could be in for.
I recently took a (short-lived) job with a tax office in a local shopping center. At first I thought to myself Hey, if they’re willing to train someone who couldn’t get past high school algebra to crunch numbers, how hard could it be? After all, as I was told, computers do all the work these days.
Famous last words.
In the week that I held this less than lofty position, I learned some valuable lessons. Perhaps the most important was that I felt more comfortable giving CPR than fooling with someone else’s finances.
Good vs. Evil
Tax preparers are like superheroes and villains. They have powers that can be used for good or evil. Some will let you know right off the bat that you’re better declaring your part-time income since it goes over the amount allowed. You will have to pay more for the extra forms needed, but you’ll be up front with the feds.
Others will find every loophole available to get you a higher refund, neglecting to tell you that you will be responsible for their misinformation. These are probably the tax people who get a percentage of refunds they work on. Beware of promises that sound too much like winning the lottery.
Pros and Cons
There are pros and cons of having your taxes done at one of the many tax preparation offices springing up all over the country. It used to be that they started after the first of the year. Now many offices offer quick loans before Christmastime.
Check out some of the plusses and minuses about going to one of these establishments and find out if you’ll be doing yourself good or digging a hole you won’t be able to get out of until next tax time. Keep in mind that state laws differ. Even within the same state, different counties have different laws.
Blessing:You won’t have the headache if you take your paper bag full of receipts and W-2s to a tax preparer. Throw it all out on the desk and let someone else pick through your mess and try to figure out if you can deduct the $6.32 you spent on chalk for your class. (If you are a K-12 teacher, you probably can. Preschool teachers may not have this allowance.)
Curse: Trust. Do you really trust the person sitting behind that desk with dirty fingernails and slept in look? Did this person walk in off the street? Perhaps.
Blessing: You can probably find an office close to home. Most of them are set up close to grocery stores, which most everyone has relatively close to home. Take your pick.
Curse: Availability, as is the case with “big” or “more,” is not necessarily a good thing. Depending on your situation, it could be worth driving to someone you know and trust. After all, you are giving out extremely personal information. Identity theft is only one thing that can come of a bad tax encounter. Do you really want to be intimately involved with someone you don’t really know?
Blessing: Cheaper than an accountant. Maybe, maybe not. If your taxes are relatively simple and you expect a refund, it could be worth your while. How many jobs did you have last year? How many W-2s? How many deductions? Are you itemizing? Ask questions. If you pay up front, your cost will be cheapest at a minimum of about $100. This figure could be higher depending on your circumstances, but it’s definitely the cheapest way to go at a quickie tax office.
Curse: See above. Most times you get what you pay for. Some accountants are competing with the low prices, so call around before you go. And just because you get something quick does not mean it’s the best option for you. Whether you use a quickie place or a CPA, you need to know what each can offer you as far as money taken from your refund and risk to your peace of mind.
Blessing: You don’t need an appointment. This late in the season, the crowds may be gone and you could get in fairly quickly at many offices. The crunch that comes in February has passed. Most people expecting a refund have gotten in and out and have their money by now.
Curse: You get who they give you. If you walk in off the street, your “experienced” tax preparer could have the same experience as the receptionist. Their pay is very likely the same as the person answering the phone.
Depending on the company, training of tax preparers could be practically nil. I worked for an office supply company and intensive training lasted four weeks. When I worked for a tax preparation office, training was less than 30 hours.
If a mistake is made on your return, you probably won’t know until the IRS tells you that you won’t get a refund. For a fee, you can purchase a guarantee that any mistakes will be taken care of by the tax preparation company. But most people who want to get in and out with their “sack a hunnerds” don’t want to spend the extra $25 or so. If a mistake is made, the customer is the one who pays.
There are higher fees for quick loans. E-filing itself is free. But the bank fees add up until you can be paying a high percentage to get quick money. Depending on how much you expect to get back, you could loose hundreds of dollars in fees.
Before You Make Your Decision
It’s up to you. Do you want it quick or do you want it done right? (I know. Sometimes quick can be good. But not always.) Most of the people going in to have their taxes done at one of the quickie offices are the working poor. Most need their money now. For many, it’s worth loosing a chunk in fees to have their refund sooner than later.
You’re bright, though. If you know your way around a computer, you can probably navigate one of the online sites that will let you do your own taxes for a minimal fee or even free. Look around. Have faith in yourself. You work hard. You deserve to get back the money you’ve paid in.