The REAL winners

[Snaggletooth]

Loss of Clientele Potential

Personally, I'm not sure I want to prepare a return for someone using the $7,500 credit... As far as I'm concerned, the mortgage company can prepare their returns for them.

Yes, there are good reasons for avoiding the situations that will come with this credit. Just like the EIC crowd is not particularly appealing either.

But I believe any loss to our industry of a significant number of returns to other entities is not good for us. For myself in particular, I am working on my third generation of family taxpayers in some cases. When some of these clients are very young and have simple tax returns, I lose some of them because they need money so bad that they will go to a RAL preparer -- even though I can get their money back in ten days. I can now foresee loss of even more of these young people if they are forced to go to a mortgage company to file their taxes.

They are not young forever, not broke forever, and not stupid forever. Many of them, in fact most of them will mature and their tax complexity will grow with them. Just last week, I filed an SS-4 for a 28-year old who started an LLC, and for whom I had been filing simple returns since he was a teenager.

Although many of these qualifying for the $7500 will not constitute our favorite clientele, I believe any loss to our industry of a significant segment does not bode well for us.

[JohnH]

You are right, and I wasn't thinking long-term when I posted that knee-jerk comment. I agree that it isn't a good idea to turn our backs on any segment of our market, especially the younger clients who are just getting started. Most of my current clients were young at one time, I watched many of them make some not-so-smart decisions at some point or another, and it would have been a mistake to write them off. I'm also grateful that they didn't write me off when I did a few dumb things along the way.

On reflection, I'd much rather work with a client claiming a $7,500 tax credit on a first home purchase than to process a return claiming a large EIC.

[les grans]

Just a ball-park kinda question: How many taxpayers, let's use percentage, will be getting the $7,500 credit? One in a thousand?

[JohnH]

I read that the credit is expected to amount to $13.6 billion on 2009. Don't know if any of that is administrative cost, but if we assume that it's all going for the credit, everyone uses the full $7,500 credit, and if I got my decimals in the right place, that would mean that 1,800,000 taxpayers will be taking the credit.