Print

Email story

Comment

Email editor

Who does your taxes

Nowadays, do-it-yourself is for home improvement, not taxes. From volunteers working for free to an army of paid preparers, there are plenty of people out there waiting to fill out your 1040s.

By HELEN HUNTLEY
Published February 28, 2006

	[Times photo: Bob Croslin]
	AARP Tax-Aide volunteer John Wightman looks over tax forms at the Largo Library. Wightman is part of a cadre of AARP volunteers working in a tax-help command center at the library.

The brightly lit room at the new Largo Library is a study in concentration. Volunteers peer at their laptop computers, carefully typing numbers from slips of paper. Next to each of them at the table sits a taxpayer or two, suffering through the annual ritual of settling up with Uncle Sam.

"I used to do it myself, but it's not like it used to be,'' said retired teacher Louise Johnson, 78, of Largo, who came to AARP Tax-Aide for help. "Every year there's something new, and it doesn't pay to get it fouled up.''

She and her husband, Frank Johnson, 81, were relieved to learn that like three-fourths of all filers, they can expect to get a refund.

When it comes to income taxes, do-it-yourselfers are a dwindling breed. More than 60 percent of us now file returns with a preparer's signature.

A mere 13 percent do it the old-fashioned way, putting pen or pencil to paper. Don Freeman, 71, is one of them. He thinks people with simple returns easily can do it themselves.

"It's not how much you know about taxes; it's whether you know where to go to get the answers,'' he said. Freeman, a retired accountant who lives in Largo, does a few returns by hand each year for himself and family members. "I know pretty much what I need for my taxes, but if I had a complicated situation, I would consult a CPA.''

Most do-it-yourselfers have graduated to computers, either using an installed software package such as TurboTax or TaxCut or completing their returns online.

Online preparation and filing are free through the IRS Web site (www.irs.gov) although eligibility this year is limited to people with adjusted gross incomes of $50,000 or less. If you make more than that, you can file for less than $25 at sites such as www.turbotax.com www.taxcut.com and www.completetax.com One site, www.taxact.com has free filing for everyone. Of course, you'll get plenty of pitches for upgraded versions of their software.

Many sites offer some form of professional help, including review of your return, for a fee.

If you want someone else to take charge of your return, the options include tax preparation services, such as H&R Block and Jackson Hewitt, and independent accountants, enrolled agents and CPAs.

Many people find accountants they like and stick with them for years.

"I have a CPA back home in Syracuse,'' said Evelyn Barenholtz, 77, of Clearwater. "He's been doing it for me for the past 20 years. He knows the ins and outs of how you can save money, and I don't know this stuff.''

For retirees, one of the most complicated issues is the correct handling of retirement distributions, said Mark Steber, vice president of tax resources for Jackson Hewitt in Sarasota.

"Different types of IRAs and retirement plans have different implications from a tax computation perspective,'' he said.

Freeman said reporting investment sales is the biggest challenge for many, particularly investors who own mutual funds and have reinvested dividends over the years.

For those looking for free help, AARP's Tax-Aide program offers 8,000 sites nationwide. You can find one near you on the Web (www.aarp.org) or by calling the IRS toll-free at 1-800-829-1040 .

Last year, Tax-Aide volunteers prepared more than 970,955 tax returns, including 98,836 in Florida. The Largo Library site is among the busiest for the program, which is supported by the IRS.

"We do them for people of any age,'' mid-county coordinator Diane Hernan said. "The only way we turn people away is if it's beyond our scope of training. Even if somebody was a day trader, if we weren't busy we might try to do the return. But if they have tons of stuff and there's people waiting, we'd say you really need to go to a paid preparer.''

Volunteers keep the program humming.

"Taxes always have been an interest of mine,'' said Bob Mensch, 63, a retired actuary who has been a Tax-Aide volunteer for 16 years. This year he's working at St. Cecelia Catholic Church in Clearwater.

Some sites, including the Largo Library, are completely electronic this year, which requires volunteers to make adjustments not all of them are happy about.

"The types of returns we do can be done in my estimation considerably faster on paper than they can on computer,'' Mensch said.

However, he said he just might do his own return on the computer this year for the first time. "You get a nice printed copy, it checks itself and does all the arithmetic and the lookups of the tables. It eliminates some errors.''

Nationwide last year was the first time the majority of all tax returns were filed electronically, and the number is expected to increase this year even though one form of electronic filing - filing by telephone - has been eliminated.

Mitzi Beach, 52, of Clearwater turned to Tax-Aide for electronic filing help when she learned she could no longer file by telephone. "My return is short and sweet, but I trust them to do it more than I do myself,'' said the library assistant.

Electronic filing reduces the potential for errors and speeds up refunds, which can be deposited directly in your bank account.

[Last modified February 28, 2006, 09:53:25]