Hey! I have a question which is a spin-off from my last question pertaining to mileage deductions for construction workers. This is really troubling me because I am trying to build my tax business. I work out of my home (in the country-I do offer free pick up and delivery within 20 miles which gets me into our big city nearby) and last year for my first year I did 15 returns. This year I was hoping to double that number.
Since I am doing my best to gain new customers, it makes it difficult when you have people who had preparers who in the past allowed something I won't. I had one customer last year who wanted to deduct her leased land payments on Schedule A because she had always done it in the past, but with the research I did and the fact that 2 out of 3 IRS agents said "no". I went with no. I am almost positive she won't use me again this year.
With these 2 co-workers of my husband wanting to use mileage deductions that are very questionable and most likely not allowed, how do I gain a new customer when I won't allow things they want? They say, "H & R Block allows it." I try to defend with the fact the H & R Block asks minimal questions. I am very thorough.
For example, back in 2000 I had a man do my taxes who is pretty big in our area. My husband and I sat down with him and were asked questions like "do you travel for your job?" That year, my hubby had traveled to the U.P. of Michigan (we're in Northern MN) many times. He was paid travel pay by the company, but we weren't asked that, and we didn't think about it (I realize it now obviously). The guy asked, how many times he traveled there, and approx. how many miles was it. He did some simple math, and put down miles for deduction. Also, he asked "did you donate to goodwill?" I said that I always donate lot's of clothes each year. He asked, approx. how many bags? I told him probably 20 white kitchen garbage size. He said, 'well at $20 per bag, times 20 bags, that's a deduction of $400. He asked my husband if he had any work clothes or tools he paid for himself. My husband said yes. The tax preparer said "about how much do you think you spent?" We said approx. $300-$400. He then put that down too. We had receipts for none of this! He didn't ask for them and we didn't think we had to have them. We were 22/23 years old at the time and nothing seemed out of the blue to us. He was helping us to get more money back, and who wouldn't trust a tax preparer?
Because of all this, I am so leary of taking chances. I don't know how common audits are and am not aware of what exactly would fall onto me in the event it happens. But I'll be honest, it scares me to death! I want to grow my business, but it seems I am ticking of potential customers by not doing what they want me to do and have always done.
What are your thoughts?
Since I am doing my best to gain new customers, it makes it difficult when you have people who had preparers who in the past allowed something I won't. I had one customer last year who wanted to deduct her leased land payments on Schedule A because she had always done it in the past, but with the research I did and the fact that 2 out of 3 IRS agents said "no". I went with no. I am almost positive she won't use me again this year.
With these 2 co-workers of my husband wanting to use mileage deductions that are very questionable and most likely not allowed, how do I gain a new customer when I won't allow things they want? They say, "H & R Block allows it." I try to defend with the fact the H & R Block asks minimal questions. I am very thorough.
For example, back in 2000 I had a man do my taxes who is pretty big in our area. My husband and I sat down with him and were asked questions like "do you travel for your job?" That year, my hubby had traveled to the U.P. of Michigan (we're in Northern MN) many times. He was paid travel pay by the company, but we weren't asked that, and we didn't think about it (I realize it now obviously). The guy asked, how many times he traveled there, and approx. how many miles was it. He did some simple math, and put down miles for deduction. Also, he asked "did you donate to goodwill?" I said that I always donate lot's of clothes each year. He asked, approx. how many bags? I told him probably 20 white kitchen garbage size. He said, 'well at $20 per bag, times 20 bags, that's a deduction of $400. He asked my husband if he had any work clothes or tools he paid for himself. My husband said yes. The tax preparer said "about how much do you think you spent?" We said approx. $300-$400. He then put that down too. We had receipts for none of this! He didn't ask for them and we didn't think we had to have them. We were 22/23 years old at the time and nothing seemed out of the blue to us. He was helping us to get more money back, and who wouldn't trust a tax preparer?
Because of all this, I am so leary of taking chances. I don't know how common audits are and am not aware of what exactly would fall onto me in the event it happens. But I'll be honest, it scares me to death! I want to grow my business, but it seems I am ticking of potential customers by not doing what they want me to do and have always done.
What are your thoughts?
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