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Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121146  
Subject: Re: VITA Musing #3 - The Last Word Date: 4/19/2003 2:53 PM
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Do you pass on hints or suggestions as to what could be done this year to avoid the short fall next year?

Oh, absolutely. After completing the return, I go over it with the taxpayer, schedule by schedule and line by line. For every line with a number on it, I explain how that number got there. And at the very end there's a final reckoning: total tax vs. total payments. If the taxpayer is getting a largish refund, I suggest that they might want to consider decreasing their withholding, and tell them how to do that. If they're having to pay a large amount, I tell them how to arrange for increased withholding, and in some cases, make quarterly payments. (Actually, the guy who got hit the hardest, payment-wise, had a fair portion of his income on a 1099-MISC, and so was hammered twice - nothing withheld and SE taxes. In that case, I showed him how to estimate the income and SE tax arising from Sched C type activity, and suggested that he be very careful to set that much aside on a regular basis.)

So yes, I make what I think are sensible recommendations. Will they do as I suggest? I don't know. The ones getting the refunds like the idea of getting a chunk of money from the IRS, even if it is their money to begin with, returned with no interest accrued. And I can see that the ones who owe might be reluctant (or unable) to have less to do with on a regular basis. When you're on the edge, financially, next April is a LONG ways off.

Lorenzo
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