Early returns: Preparers field clients’ strangest comments

From the secrets of their home life to the starkest examples of mismanaging affairs, clients tend to tell their preparers all – and expect a lot of understanding in return. Here’s what tax pros have heard and how they responded.

Sweet memories

“Many clients are expecting the same or greater refunds because of the ‘big tax cut.’” said Jeffrey Gentner, an Enrolled Agent in Williamsville, New York. “Unfortunately, that hasn’t been the case. In fact, the opposite is true since the withholding tables gave them an increase in their paychecks all year. Funny how people forget about that.”

KISS and tell

Any question related to 199A is strange, “as what taxpayers read is never correct or their hairdresser’s cousin’s lawn-care guy told them the wrong thing,” said EA Jeffrey Schneider in Stuart, Florida. “No one understands why some are limited and some are not. I try to KISS [keep it simple, stupid], but with this, that’s almost impossible. I have said, ‘Do you trust me?’ When they answer, ‘Yes,’ I say, ‘Rest assured the numbers are correct and let’s go with the return as is.’'

Did you hear the news?

Bloomberg News

“It’s amazing how many people don’t even realize we have a new tax law,” said Lawrence Pon, a CPA at Pon & Associates, in Redwood City, Calif. “Or they quote some amazing misinformation they saw on the internet. I haven’t kept track of the misinformation because I don’t want to confuse my brain.”

How to fail in business without really trying

“‘Why can’t I take a loss? The government says I can take a loss for my first two years in business? The whole reason I started my business was to lose money!’” recalled Debra L. James, an EA at Genesis Accounting & Mgmt. Services in Lorain, Ohio. “You can’t take a loss because your income exceeds your expenses. If you started your business to lose money, you’re not a very good businessperson.”

Last resort: The arithmetic

CPA Bruce Primeau of Summit Wealth Advocates in Prior Lake, Minnesota, had a client looking for more tax write-offs “as they were in the highest income tax brackets and wanted to know what they could do to save more tax,” Primeau said. Up popped the idea of starting a company to lose money. “Needless to say, I quickly showed them how the math doesn’t work. Yes, if you lose $1,000 in a business you would save $400 in combined tax – however, you’re still out the $600.”