Professionals Help You Get Ready For The Irs


On Jan. 13 the Internal Revenue Service will begin accepting electronic returns for the 2005 tax year, but tax professionals in the Rim Country are already working on customer returns.

"This year there are a lot of changes concerning the children and they are really confusing for someone who doesn't know taxes," said Leonard Tacker, owner of the local H&R Block franchise.


Patrick Iannone is the office manger at Payson's Jackson Hewitt Tax Service.

He explained one of the changes: In the case where there are an unmarried man and woman living together and the woman has a child and does not work, so the man is supporting the child, it used to be that the man could declare himself head of household and claim the child as a dependent, although there was no blood relationship, Tacker said. Now, the single man, supporting the child of the housemate, must file as single.

Child credits can no longer be split except in the case of divorce. He said that when there is a divorce, the tax rules become more complex.

Additional reasons to use a tax professional rather than Turbo Tax or going through one of the free electronic filing (e-filing) sites on the Web site:

"We know the tax laws. We look at things a little bit closer," Jackson Hewitt Tax Service Office Manager Patrick Iannone said. "My neighbor had done her daughter's taxes and her daughter owed money. They asked me to take a look at it, and they had missed out on the credits that were available."

While tax software like Turbo Tax walks a person through the questions, a person might not be certain whether they should answer "yes" or "no," agreed Tacker and Iannone.

"It is not just log in and click, click, click ... especially this year with the changes to dependents," Tacker said.

"This year, if you are single and have no kids or don't own a home," Tacker said, "it would be fine to file taxes without assistance.

"A list of items to have on hand when preparing your own return or to bring to an interview with your accountant or tax preparer is available on The Web site has a "tax preparation checklist."


Cathy and Leonard Tacker are the new owners of the H&R Block franchise in the Rim Country.

Dependent names and birthdates should be written exactly the same on tax forms as they appear on Social Security cards. The IRS cross references with the Social Security Administration and will disallow the exemption if the match is not perfect.

Sole proprietorships and other small businesses need to be accurate and consistent throughout the year, keeping and logging receipts, bank statements and other business paperwork.

If a client brings in a box of receipts for the preparer to wade through, the job will cost a person more than the standard fees because there will be more time involved.

In a perfect world, Tacker wants to see spreadsheets.

"I don't have to see the proof behind the spreadsheets because I'm not the auditor, I'm the tax preparer," Tacker said. "The information needs to be accurate and they need to have the back-up information (in case we do get audited). The IRS usually only wants to see two or three forms, but they want (the person being audited) to be able to pull them out."

IRA contributions are often overlooked credit, said Iannone.

"Sole proprietors don't realize they can cut their tax base down by putting up to $3,500 per person into an individual retirement account unless you are over 50 years old," Iannone said.

Tacker said sales and automobile tags and excise taxes are other forgotten credits.

"Even though people don't get the itemized medical expense deductions for their federal taxes because they don't have enough, it is fully deductible for the state, so they miss out on that deduction for the state."

Tacker said he wants to make sure the older residents in the area are aware of the property tax credit program.

"If your income is low enough, if you are just on Social Security and you pay property taxes, you'll get refunded up to $509."

Anyone with earned income can file electronically said Tacker.

"What is good about e-filing today is that you can file your taxes Jan. 16. If you owe, say, $1,000, you can submit your taxes, but you don't have to pay until April 15," Iannone said.

"The IRS wants to have 85 percent of all income taxes e-filed by 2007.

E-filing, combined with direct deposit, will have a person's refund to them in a week to 14 days, depending on the date the IRS accepts the return and the date the IRS is scheduled to direct deposit refund checks.

For those who want their money now and can't afford to pay the tax preparation fee, "refund anticipation loans" (RAL) are not a bad way to go, said Tacker.

If customers qualify and choose to do so, they can get a RAL in a couple of days at either H and R Block or Jackson Hewitt. It is the amount of the refund minus preparation and bank fees.

There are several other loan refund options.

The cost of a mistake on a tax return is interest and penalties. Both Tacker's and Iannone's companies guarantee their work and pay the penalties and interest if the mistake is on the part of the preparer, not the filer.

Like the loan against refund programs, there are other insurance/guarantee programs offered to customers of both companies.

The fee for filing a prior year's return does not cost any more than for the current year. Even if a person who has not filed gets a letter from the IRS saying they owe money, they might not, Iannone said, citing a set of returns he prepared from the late 1998 and 1999.

"There is a three-year threshold for IRS refunds and a five-year threshold for Arizona state refunds. If a person owes the government, the statute of limitations is seven years," said Tacker.

For more information, H&R Block can be reached at (928) 474-4577; the telephone number for Jackson Hewitt Tax Service is (928) 468-0902.

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