Discussion:The question I hate the most....

I had a guy in my office who wasted 1 1/2 hours of my time with nickels and dimes of deductions he suddenly found. I wanted to smack him. He's a nice man, but my patience was at an end. It was the old, "Can I deduct this or that" routine. I thought at one point he was going to ask if he could deduct his dog, even though doesn't have one.

The only real big deduction were his charitable contributions.

Here's the real reason he and his wife owed over $1,500, which to them is a fortune as they are over 65, didn't save and have a huge mortgage:

He and his wife didn't have enough withheld.

When you make $5,000 at a job and have $400 withheld, you can't expect a refund if you do it for every job. It happened consistently between him and his wife.

It really goes to the heart of one of my biggest complaints: human resources departments who constantly play tax adviser or people who don't think. The IRS W-4 form can be confusing, but that's no excuse for not reading it carefully.

I feel sorry for them, but I wish people would just call me before they fill out the W-4.

Tom

I do that but they are afraid to touch their Social Security.

It just boggles the mind that people can't see that when they have multiple jobs $500 of withholding on $5,000 just doesn't cut it.

It's been a long day.

Tom

I try to convey the concept of 'marginal tax bracket', but it can be difficult.

I know how you empathize with your clients - but try to let it go. You haven't 'done them wrong'; it's not your fault. Try to get them to go with a specific dollar amount withheld, if you can. Perhaps offer to check their YTD withholdings for this year. It's a bit late to do much, but at least they'll be forewarned.

Good luck with tomorrow.

Am I wrong here? So, if their biggest fear is paying tax at tax time, how can they explain having 65 years on this earth, and not figure this out?

The problem with the W-4 is the same problem you run into with a lot of IRS forms. They try to perfect the calculation to such an extent that you get involved in the numbers instead of seeing the big picture.

In most cases, of course.

We need per cent!

We need per cent!

We need per cent!

We need per cent!

Kevin, you've got a lot of clout with the IRS folks. Why not mention to them that you have noticed a lot of couples coming in have two incomes! The wives aren't coming in barefoot and pregnant. And you no longer have point at where to put the X.

I also agree with EasternPA. We really need the percent option. Worked so well for many situations.

I know, I know, billing by the job can really increase our revenue, but sometimes the clients knowing they're paying us for our time can really cut down on their time-consuming whining.

But I have a hard time getting some people to understand it. Especially when they are starting a new job. It's hard for them to know if the right amount is being withdrawn. Employer's withholding does not kick in for low wage earners till they accumulate a certain level.

If I tell a client they are in the 25% bracket, and they can check that 25% is being withheld each month, they are empowered.

This does result in a bit more being withheld, but most would prefer that to underpayment. Some folks are in shock when HR/Payroll screw up and they could not predict what should have been withheld.

Point is, use these times to create educational <and billable> meetings with your clients.

I think we are going to see some very unhappy clients this year with the new stimulus, let's not withhold enough package that was passed. Married couples who didn't take this into account are going to owe instead of getting back and the unhappiness gets addressed to us.

So what do I tell Steve and Kathleen, with their 25 W-2 forms in amounts ranging from $115 to $33,800 (plus 34 1099 Misc forms). Best advice I can give is to claim S-0 plus an extra amount on their two largest wage forms.