H&R Block fee??

hilltop_gwFebruary 9, 2007

Our daughter is trying to establish residency in another state & one of the requirements is that she use a paid tax preparer from that state to do her tax return. She scheduled an appointment with H&R Block. She didn't have income from that state in '06, but does from a couple other states: two W-2's, interest income, small capital gains from a mutual fund, one grain sale/farm income. She's a grad student (22) so also has tuition statements. The preparer she worked with didn't believe her when she said she had to file by March 1 (due to the farm income), wasn't familiar with that type of return & told her to leave all of her paperwork and it would be a minimum $380 fee. This was her first experience with a paid tax preparer (for the most part, we file our own taxes because it's a rather simple return); she was on a time crunch and felt she didn't have a choice so she left everything with him. Is that fee typical or reasonable? Would you dispute it?

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jlhug

I'm a paid tax preparer and I have never heard of such a requirement. Which state is she trying to become a resident of? Based on my experience, she needs to change her driver's license, voting registration and establish residence in that state.

I have no idea if that fee is typical. She does need to find a preparer that is experienced in farm returns. There are very experienced preparers at Block but you have ask for them.

    Bookmark   February 9, 2007 at 6:11PM
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hilltop_gw

She's trying for Ohio residency. And Correction-she said I misheard over the cell phone & it was going to be $280. Last August she changed her driver's license, voting registration, licensed her vehicle, living without our support and now she's gotten a job so I think she's doing all the things necessary to get residency. She just said the tax preparer didn't seem up to par on Nebraska, Indiana or farm returns. My "kids" have lived in numerous states and I've always filed their returns. I just assumed H&R Block would have access & knowledge to do returns from all states quickly. I think the idea of having a paid preparer do it is so that 1) they know the return is filed & 2) they feel confident it was done correctly. Unless of course my daughter just made it up that it had to be done by a paid preparer because she didn't trust my work or didn't want to jeopardize residency, but I don't think she'd do that. I'll just tell her which forms to make sure the guy has prepared and hope for the best.

    Bookmark   February 9, 2007 at 10:50PM
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jlhug

I'm not surprised that the preparer didn't know how to do all the different states and the farm. Most preparers aren't familiar with the "ins and outs" of the various states. It's enough to keep up with Federal and the local state tax law changes without thinking about keeping up with 49 other states. I've seen preparers with 30 years of experience step back from an unfamiliar state or tax situation and tell the client he needed to research something like a farm to insure the return is done correctly. There are probably very very few preparers who are experienced in all tax matters, forms, situations, etc. To expect a preparer to be very familiar with farms, Nebraska and Indiana when the preparer is in Ohio is unrealistic.

Block, in some areas, has a person who specializes in the state tax returns. That person is a real expert. Hopefully, your daughter's return is being sent to an all states pro.

Now for the farm, I've been doing taxes for 13 years (yes, some were working for Block). I might do one or two farms a year. In other areas of the country, preparers do farms every day so they are more familiar with them. I take my time doing farm returns because there are some twists (credits, different filing deadlines, etc.) that we just don't see every day. A good preparer will take time to research those items. It's a "I know what I don't know" situation. You might be familiar with farm returns or live in an area with many farms. It is quite possible that your daughter went to a preparer in an area that doesn't see farm returns very often.

I'll do some research on the paid preparer required in Ohio issue. I've never heard of that one before your post.

$280 for 2 state returns, a farm, a 1040, a Sch D, and either a education credit or tuition and fees deduction doesn't seem too far out of line. You can pay more at a CPA firm or less at a local firm.

    Bookmark   February 10, 2007 at 7:18AM
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Chemocurl zn5b/6a Indiana

Our daughter is trying to establish residency in another state & one of the requirements is that she use a paid tax preparer from that state to do her tax return.
Who told her that? I never heard of such a thing.

The preparer she worked with didn't believe her when she said she had to file by March 1 (due to the farm income)
That must be a state thing...which state?
I have farm income and farm 'outgo' here in Indiana, and there is no need to file b4 April 15th.

it was going to be $280
I think that is outrageous. I used to use H&R Loophole. Initially it cost $50 and when I left them it was $150.
I now have a wonderful tax service...she does it for a living (year round) and charges just $55.

A friend of mine used to take the yearly classes to work part time for H&R. I certainly would not have wanted to trust him with mine.

If it is not too late, I would suggest she get her papers back from them, and find someone more 'experienced' who does taxes year round for a living...possibly someone she knows there in that state can recomend someone.

I found my preparer by a trusted friend's recommendation.

Sue

    Bookmark   February 10, 2007 at 7:46AM
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hilltop_gw

Thanks for your input. I can see where perhaps the charges are realistic as it takes time to prepare the different state's returns & the various forms. Guess I didn't realize my value all these years. Since H&R is so large, I thought perhaps they had a computer program where various incomes & state info could be input and a return generated. Guess it's just not that simple.

Regarding the paid tax preparer doing her return--I looked online & couldn't find anything stating that. I'm not sure if that's something she was told or if that's how she interpreted it when reading about income being subject to Ohio tax.

Regarding the March 1 filing deadline for farm returns, Per IRS Schedule F instructions if at least 2/3 of your income is from farming or fishing income, you need to file and pay the tax due by March 1. This is only if a person does not make estimated payments throughout the year. Believe me, this is a hassle because often we don't receive some of our investment income forms (1099 interest & Schedule K's & others which only send annual statements) till far after we've filed & then we have to file an amended return. They're supposed to have those forms sent out by then, but they don't. We live in a very rural area where farming is the norm.

    Bookmark   February 10, 2007 at 12:11PM
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kudzu9

hilltop-
Something is not right here. I don't believe any state would or could make such a requirement. In adddition, not every person needs to pay taxes, so I can't imagine a state setting up two sets of residency requirements, one for tax filers and one for those who don't need to file. This is either a misunderstanding, or your daughter has come up with an interesting explanation for why she did this...

    Bookmark   February 10, 2007 at 1:44PM
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hilltop_gw

I'll have to ask her again where she got the idea it had to be a paid preparer. Now I'm wondering if it wasn't just an excuse as a means to sever ties with me doing her taxes. She's trying to exert her independence which is normal. That's fine here. I'll gladly turn the tax task over to someone else, but it might have turned into a costly lesson for her.

    Bookmark   February 10, 2007 at 3:59PM
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