Itemizing to Standard Deductions

[zeros]

After years of itemizing for a client, he finally gets his interest down and goes with the standard deduction. Sometime spending some time with deductions and finally realizes he can no longer go long form. Do you charge him less ? Just wondering.... Happens alot.

[Lion]

If it's obvious to me, no charge for Schedule A. If I have to do the computations or do the data entry, I charge for Schedule A whether or not it ends up being used. If my program puts the charge on the invoice, I might or might not add a Loyal Client Discount of some amount.

[RitaB]

I charge

If they bring me the info, I put it on Sch A and print it whether they take the Standard Deduction or not. I charge, but I'm well known for being reasonable, and no one complains. I used to try to explain, but they never understand. This is easier to me. And you wouldn't believe the times people have come to me, from another preparer, saying, "He wouldn't let me take my mortgage interest." No, you just couldn't itemize, and you would know that if you looked at your return, which you don't, so here's you a Schedule A, and we're all happy.

Actually, I would rather DO the Schedule A and NOT charge, than NOT do the Schedule A and run the risk of somebody thinking I didn't "let them" take a deduction.

[JohnH]

Rita, this reminds me of a conversation with a client a few days ago. He and his son came to my office to drop off the son's tax info. The son told me it's OK to talk to dad about the return if I need to. He had received a couple of W-2 forms working as a pizza delivery guy and he had saved a lot of gas receipts. No mileage log, just a stack of gas receipts. No other deductions.

I ran into the dad last weekend and mentioned that I'd mailed the return to the son at their home address. Dad asked (skeptically) if the stack of receipts made any difference. I explained to him that there was no mileage log, but I had done a rough calculation based on the gas purchases and had determined that his mileage, especially after the 2% haircut, wouldn't have exceeded the standard deduction.

Dad looked at me for a minute, then said "Don't get into that with him. If he asks about the gas, just tell him it's all been figured in there."

[beck]

Also, keep in mind that itemizing deductions may not help with the federal return but the flow through onto the state return may benefit the client with lowering their state taxable income.

Beck

[Gretel]

Yep, and in Montana almost everyone itemizes because Federal withholding is deductible on the State tax return up to a certain limit. I only drop charges if I do not need to go through Schedule A expenses.

[TAX4US]

I put the stuff on the A when not used for the state and write across the bottom "Stnd is better" Charge 75% of the A price. Do the work get paid for it. Then you can safely say I looked and compared. Your mileage may be better.

[geekgirldany]

Dad looked at me for a minute, then said "Don't get into that with him. If he asks about the gas, just tell him it's all been figured in there."

Sounds like what my brother told me to tell firefighters about meals and haircuts.

[JohnH]

It's the oposite in NC. The state law changed this year, and we have a whole new ball game. Our standard deduction is higher than the Federal, plus NC no longer allows some Federal deductions or they place limits on them. I haven't been able to envision a situation in which a taxpayer would claim standard deduction on the Fed but itemize on the state on a NC return any longer.

[Black Bart]

Default Itemizing to Standard Deductions

After years of itemizing for a client, he finally gets his interest down and goes with the standard deduction. Sometime spending some time with deductions and finally realizes he can no longer go long form. Do you charge him less ? Just wondering.... Happens alot.

I usually come down some, but not a whole lot; generally just play it by ear depending on the person, whether he/she's any/some trouble to fool with. We don't have many here 'cause state standard duck is down at $2K per person.

Many problems are how to get old-timers to stop trying to itemize - you can't just up and pronounce to a salt-of-the-earth type that he can't take off medical, church, and taxes 'cause they've heard all their lives that you can. They'll say "Well, Billy Joe said Block takes off all their doctor bills, etc., etc., etc." You're wasting your time explaining about the 7/10% med haircut and/or a large fed standard deduction, so, for those, I just say "Leave the stuff, we'll go through it, and take off all we can" and they're satisfied. For the sharper tacks, you explain about the 12,400 standard and that there's also a state low-income table to kill off the itemized stuff -- they understand and thereafter pay a "short form" fee.

[kathyc2]

Rather than telling clients they "can't" itemize, I explain to them how they are getting a great deal. I tell them that the people who itemize only get a deduction for the amount they spend whereas the non-itemizers get a bump-up over and above what they actually spent on the "big 4". They are almost always happy hearing that.

[Black Bart]

Rather than telling clients they "can't" itemize, I explain to them how they are getting a great deal. I tell them that the people who itemize only get a deduction for the amount they spend whereas the non-itemizers get a bump-up over and above what they actually spent on the "big 4". They are almost always happy hearing that.

Yeah, I've tried that too, but about half of them want standard PLUS the doctor bills.