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No. of Recommendations: 16
I really don't like people who take advantage of the elderly. Here's why.

Just got off the phone with one of my clients. She's a batch processor - preferring to do 2 or 3 years at a time. So I'm doing her 2019 and 2020 returns. She did some work on her house. A lot of work. No -- a LOT! of work. Windows. Roof. Driveway. Water heater. Something else that I'm forgetting.

At any rate, the contractor tells her there's tax credits she can use for some of the work. There's tax credits for the windows. And a door. And the roof. So I sit down and do her returns. Yep, there's a tax credit all right. $500.

My phone conversation with my client goes something like this: Did you get the credit for the windows? Yes. That's only $200. How about the door? Yes, that's $300. How about the roof? Well, there's no credit left for the roof. The most credit you can get is $500. And frankly, the door was enough to get the maximum credit. But the contractor said I could get a credit for the roof. You can. But there is a limit to the credit you can get. That limit is $500. But they said it was a 10% credit. Well, yes, sort of. The credit is 10% but can't be more than $500. But I was expecting a few thousand dollars of credit.

At this point, I really want to tell her the contractor lied to her. But I can't. I don't know what she was told. And I don't know how what she was told differs from what she understood. I just stick to what I can tell her. And that is that her credit for all of the work she did on the house is $500.

I don't think I saw all of the contractor's bills. But based on the ones I did see, I'm pretty sure she spent 6 figures with this guy. And she's got a $500 tax credit to show for it.

So, did the contractor take advantage of her? Maybe, maybe not. Again, I don't really know enough to tell. But if I were a betting man, my bet would be on yes, he did. She clearly didn't understand all of what was going on. And it appears the contractor didn't do too much to make sure she did. He just wanted her signature on the contract. And with that, his job was done.

--Peter

PS - Did I mention the $14k tankless water heater? I'm not entirely up on water heater costs, but the last time I did mine it was something a bit over $1000 installed. But it wasn't tankless.
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No. of Recommendations: 2
PS - Did I mention the $14k tankless water heater? I'm not entirely up on water heater costs, but the last time I did mine it was something a bit over $1000 installed. But it wasn't tankless.

Expensive. Unjustified maybe but unknowable without information on what work was required to install it.

A friend priced a tankless water heater and with installation it would have been over $10,000 because of the modifications required. She stayed with a standard water heater.
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No. of Recommendations: 7
* sigh *

I've had Power of Attorney for my dad for many years. I visited him every week, first at his house, then in assisted living, until last year when we switched to zoom.

I helped with finances. Started by writing his checks, which he'd then sign; over time that segued to my just paying most things online. Got a call blocker with whitelist for his phone when he started giving his credit card info out to strangers. Took his outgoing mail "to mail" for him, and siphoned off and shredded the nonsense he was signing up for, which he then didn't remember anyway. Fired his unreliable landscaper and hired someone else to mow the lawn. Clearly, he was slipping cognitively in a lot of ways. But at our weekly lunches, he still put the check on his credit card and correctly calculated the 20% tip and the total.

Thing is, PoA let me do a lot for him, but it didn't enable me to stop him from doing whatever he wanted, which he did unilaterally. I showed up at his house once to find contractors installing a retractable awning over his deck. Surprise! He directed me to pay them, said it'd be $1k. They said, "$3k," he said OK. I have no idea what the going rate is for work like that, but 4 figures sure is a lot less than the 6 figures your client is out. And, Dad did spend many hours after that enjoying the good weather on the deck, with the awning keeping the sun off him, so it was a useful improvement.

If your client has adult children, I'd suggest you get her permission to have a chat with them. Even if the contractor wasn't taking advantage, it's good for family to be in the loop.
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No. of Recommendations: 1
Just got off the phone with one of my clients. She's a batch processor - preferring to do 2 or 3 years at a time. So I'm doing her 2019 and 2020 returns. She did some work on her house. A lot of work. No -- a LOT! of work. Windows. Roof. Driveway. Water heater. Something else that I'm forgetting.

At any rate, the contractor tells her there's tax credits she can use for some of the work. There's tax credits for the windows. And a door. And the roof. So I sit down and do her returns. Yep, there's a tax credit all right. $500.



I wonder if there's any chance he told her that there would be up to XYZ of tax credits, and to be sure to check with her tax preparer. Doing two years of taxes at once seems...I don't know...not on top of things. At least she'll get whatever energy bill savings the new items result in.

It's too bad that we need to have our defenses up for things like that. I was once told how much a certain thing would save on my taxes, and just the previous year had stopped itemizing (home loan interest was finally down to where the standard deduction was better). I probably was ruder than necessary, knowing there would be no tax benefit, when I asked the person proposing that thing how he knew anything about my tax situation.

Last year I did a big Roth conversion, and expected the tax consequences, but it may be that my "artificially high" income for the year could make me ineligible for the third round of Coronavirus stimulus. But I knew enough to look into the tax consequences (at that time) of my actions to see if there were any limits or oddball triggers (like income over a certain amount preventing an HSA contribution).
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No. of Recommendations: 3
. . . my actions to see if there were any limits or oddball triggers . . .


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I suspect that in Two years you'll find that you created an "IRMAA" bump in your Medicare premium.


https://www.google.com/search?client=firefox-b-1-d&ei=wL...
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No. of Recommendations: 0
Last year I did a big Roth conversion, and expected the tax consequences, but it may be that my "artificially high" income for the year could make me ineligible for the third round of Coronavirus stimulus.

Also did a partial ROTH conversion in 2020. I'm deferring filing 2020 until the stimulus bill passes. If there is an issue, I won't file until after the stimulus is paid.

Also, the same recommendation for widowed sister-in-law. She retired last year and it caused a spike in her income for 2020. Income in 2019 and 2021 are lower.
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