H&R Poster

[jimenright]

I walked by the local H&R office the other day and noticed a poster in the window proclaiming that errors were found on 87% of competitor returns. I believe that I have found errors on most H&R returns that clients have shown to me. Actually, tax preparation is an error prone process. Most errors do not effect the bottom line in a meaningful way and those that do go both ways.

Agree?

[WhiteOleander]

Agree. ******

[Snaggletooth]

I Hope Not

Geez, I hope 87% is not the case with the returns I prepare. Or even 50%.

I'm hoping only a handful of returns out of the appx 150 that I prepare have errors,
even minor ones.

My accuracy, of course, being limited to the information provided to me.

[Bees Knees]

Lets test our skills:

Tax year = 2008

Taxpayer is single, born on 4/18/1956

Taxpayer lives and works in Texas.

Employer XYZ: W-2 box 1 = $103,000, box 2 = $23,000, box 3 = $103,000, box 4 = 6,386, box 5 = $103,000, box 6 = $1,493.50

Bank ABC: 1099-INT box 1 = $238

Stock LMN: 1099-DIV box 1a = $301, box 1b = $45

Stock LMN: 1099-B box 1a = 8/13/2008, box 2 = $1,215, supplemental info: Sold 10 shares of LMN on 8/13/2008. Purchased 15 shares of LMN on 5/19/2002 for $3,018. Purchased 5 shares of LMN on 8/22/2008 for $1,220.

Property taxes paid on principal residence = $800.

No medical expenses paid.

No mortgage interest paid.

No charitable contributions made.

No miscellaneous job expenses.

No tax prep fees.

What is his refund / balance due on the federal Form 1040?

[Brian EA]

Refund/Balance Due

Client need to get a corrected w2 showing box 3 total-- 102000. Also to request a refund from the employer for excess social security of $62.
Sale of stock -- costing used is FIFO
Refund is $ 2912.

More info is need for the cost basis. Were the dividends reinvested.. These were not taken into consideration.

brian

[TaxLadyinPA]

refund = 2688

and talk to your employer ...

I won't tell how I got my answer .... will wait to see if others agree with mine ... then I'll explain if I need to. *xing my fingers*


***************
Did you ever hear of the IRS test giving 100 preparers a return to prepare and getting 100 different answers ??

[Earl]

My guess

My answer is $2,776 refund using FIFO for stock sales. With additional $62 refund from employer for excess SS taxes withheld.

[Snaggletooth]

My Answer

...and of course I believe since we are touting the accuracy of our skills, Bees is making a point by putting us to the test.

There are a couple snarls in his example, but in all fairness it is not overcomplicated. In fact, most of my returns are much more complicated than his test example.

When you respond to questions such as this, do not assume any facts other than those given. If the example doesn't present re-invested dividends, don't assume any.

In his test, there are even superfluous facts. For example, I don't know what Texas has to do with anything, other than possibly most of us know there won't be any state income taxes.

My refund is $2,912. Exactly as Brian, EA. I also drug this out on paper and did not use any software to calculate. I do this for nearly all my returns, then use the software to double-check, and I chase down discrepancies and understand them prior to finalizing. The Tax Book is by my side when I compute.

[Bees Knees]

Assume all info posted is complete. If it does not say dividends were reinvested, then no dividends were reinvested.

Do not give away how you calculated the return. Just give a simple answer. Refund = ??? or Balance Due = ???

I will reveal the correct answer on Monday along with an explanation of how it was calculated.

[WhiteOleander]

I got a refund of 2940.00.

[JohnH]

I got a refund of $2,912.

[Uncle]

Interesting exercise

I am currently working on a S-Corp and owner this morning, but I did stop to read the thread and then I could not help myself. I wondered what random number I would generate if I simply entered the numbers with no checking or review. Drake calls it $2912 in less than two minutes of prep time. I will be interested in the errors that come to light on Monday.

[JSLATER]

Refund of $2800. Forgot to follow Bee's rules and gave how I got my answer.

[S T]

Refund

I show a refund of $2,800 with $62 refund from Employer for over collect on FICA. Look closely at the Stock Transaction.

Sandy

[OtisMozzetti]

I agree.

I show a refund of $2,800 with $62 refund from Employer for over collect on FICA. Look closely at the Stock Transaction.

Sandy

Correct.....