Big tax refund

[imjulier]

Hey there-

I have a client who is getting a big tax refund ($2K+) when they usually owe money (a little bit). Generally, Ican explain it by looking at amounts withheld from W-2s in previous and current year or something else. Also, I checked capital gains and how those are different between years (and with different tax rates) but still can't explain it. Has anyone else had this problem? This client doesn't take "I let me software claculate it" as an answer.

Thanks,

Julie

[Bob Hoffman]

The way I begin analyzing situation like this is to run a comparison of the current return to last year's. (Comparison 2008) on your forms list. If it isn't there, download it.

[BulldogTom]

The comparison sheet is a great place to look. If it is not on the 1040, look at the 3rd page of the report, the sch. A comparison. Maybe you mis-entered a deduction (hey, it happens to all of us). I caught one this year on my review where I entered 2,700 in state withholding instead of 270. Luckily, I caught it before the client saw it.

Tom

Lodi, CA

[TAXBILLY]

If you have another preparer in your office have them do the return independently and I'll bet you'll find the problem, if there is one.

taxbilly

[kcjenkins]

Yes, when there is a significant difference, I want to know why, BEFORE I tell the client the bottom line. Because it may well be that my lousy typing is the reason, or perhaps something significant changed. But either way, we look smarter and more professional when we already know the answer. Trying to figure it out after we've already told them does not look good, IMHO.

[taxtrio]

Double check your federal w/h. Highlight the federal tax w/h line on page 2, and click on the jump too bunny, it will take you to a worksheet that displays where the w/h is coming from.

We had a puzzle like that a year or two ago. And the preparer had mistakenly put the Medicare Premiums on the wrong line of the Soc Sec Input screen and they went to Federal Tax W/H instead!!

I could be something silly like that!!

Just an idea...

Taxtrio

[imjulier]

Thanks for your responses. I had already tried the suggestions and just wasn't getting it. Instead of fat-fingering something in the return, I fat-fingered it on my calculator. Ends up big tax refund is due to 2008 being the first year out of several with capital losses rather than gains and smaller dividends and interest. Taxpayers excess w-2 withholdings were covering the tax on these in previous years. I guess a big refund may be a bright spot in this economy.

Julie

[kcjenkins]

It's still smart to do all that before the client comes in, so you can look brilliant, like you just automatically know at a glance! :rolleyes: