H&R Block Snafu Delays Refunds
…mandatory field on tax form left blank
Marketwatch.com — H&R Block, the nation’s largest tax preparer, confirmed that its software failed to fill out a mandatory field on Form 8863, which is used to claim educational credits. The IRS would not say what percentage of the roughly 600,000 faulty returns came from H&R Block (US: HRB), but the company received thousands of complaints on its Facebook page and on Twitter.
I have to tell you, I would be pretty mad if this had happened to us. My wife and I used TurboTax to prepare and file our tax return; we have for the last 5 years or so, and have never had a problem. I used H&R Block when I was younger and all I remember was an expensive “loan” in order to get my return immediately. I thought the days of those short term refund loans were over but they are not. Now there is what is called a RAC / RAL or Refund Anticipation Check / Loan.
RALs are those short-term loans usually at outrageous interest rates, for the amount of an expected refund. Tax prep fees are usually deducted from your return amount also. A “good” RAL might have an APR of 40%; a bad one can end up costing 10 times that much.
When combined with other the cost of the RAL can approach loan-shark levels.
Thankfully, this might the last year people need to be warned about RALs. That’s because the RAL industry is getting squeezed by federal regulators, who are cutting off bank funding to the biggest RAL lenders, and by the Internal Revenue Service, who is making it easier to get refunds quickly and without crazy fees.
You know, what’s really problematic is the fact that you have to pay H&R Block something like $150 for 30-40 min of time with their “tax consultant”. If I’m paying for an “expert” to prepare my taxes, I would expect there to be no errors. I realize the “tax consultant” is a human, prone to making mistakes, but this goes farther than the individual tax preparers, the fault falls on H&R Block for failing to stay up-to-date with the IRS and failing to properly train their “tax consultants”.
H&R Block explained that a form had changed, Form 8863 relating to student tax credits, and that in previous years, five lines on the form could be left blank for a “no” answer. Starting this year, preparers must enter an “N” in those fields or risk a delay.
H&R Block said it learned about the tax form change after it had submitted hundreds of thousands of tax returns. The IRS said it was aware of the problem and it is continuing to review the situation and work with “affected software companies to assist in the processing of those tax returns.”
You know, I was always instructed when filling out any form, to never leave a “blank”. If it’s a “no” answer, mark it “no”. If something doesn’t apply, use “n/a”. You would think that H&R Block’s highly trained tax preparers would follow this thinking just from common sense, especially if you are dealing with the Government.
I feel sorry for Mr. & Mrs. John Q. Public who filed their tax return and is expecting their refund only to find out it’s going to take at least 21 days for the IRS to figure everything out and issue the refund.
Now, my good friend TurboTax is not exempt from errors either. Last week, the Minnesota Department of Revenue warned taxpayers against using TurboTax to file their state income taxes, finding 10,000 returns had problems. In a terse statement, the Minnesota Department of Revenue said it would stop processing tax returns filed through Intuit (the company that operates TurboTax) if the problem is not fixed.
Well, I don’t live in Minnesota so it doesn’t affect me but if I did, I wouldn’t be as upset with TurboTax since I know full well that I am filing my return on my own with the help of a computer program. There’s not a $300 an hour “Tax Consultant” using their knowledge and expertise to make sure my return is done correctly.
If you want to insure your taxes get prepared correctly, seek out an Accountant or Bookkeeper certified to prepare tax returns.
… Often times you get what you pay for.
The Link Between your Things and Happiness
The recession certainly has made people view money and materiel objects differently, but one couple decided to change the way they live….permanently.
Tammy Strobel and her husband, Logan Smith started to downsize and give away items in their home, but when Tammy came across a challenge of living with just 100 personal items, a whole new version of downsizing came along.
Tammy and her husband moved out of their two bedroom apartment, sold their car and now ride bikes, and moved into a 400 square foot studio apartment. In addition, between her toiletries and her wardrobe, Tammy truthfully owns just 100 items.
Though this may seem a little drastic to some, turning to this style of simple living enhanced Tammy and Logan’s life drastically. Since there has been a cut in their living expenses and the money they spend, Tammy hasn’t found the need to work as often. This gives her more time to spend outside and volunteer, too.
That isn’t the most beneficial change this lifestyle has given them, however. Between selling their home and cutting their living expenses, Tammy and Logan have freed themselves from the $30,000 debt they once owed.
They, like many others through this recession, are finding out that less might actually mean more, especially more happiness. And a recent study agrees with this theory!
“New studies of consumption and happiness show, for instance, that people are happier when they spend money on experiences instead of material objects, when they relish what they plan to buy long before they buy it, and when they stop trying to outdo the Joneses,” stated an article from the New York Times.
Also, spending money on experiences means you’re more likely to spend time with friends or loved ones and are able to make memories, something you can’t exactly get from a trip to the store buying a new outfit.
In the end, you don’t need to make the extreme change that Tammy and Logan did, but cutting back may help financially and positively add to your health emotionally.
To read the full article click here.
And to find out more about the benefits of buying less, watch The Story of Stuff and visit their website .
Source:
The New York Times
Tips for Tipping: Is the Recession Changing the Rules?
Tipping is one of those awkward social requirements that can sometimes make people a little frazzled. Leave a bad tip for bad service or be merciful and remember the wait staff and how your tip fuels their livelihood?
Tipping used to be a relatively easy process. Do a little math, recall how quickly you got your refills and there was that magic number. Nowadays, people are factoring in the Great Recession and are finding ways to shave off costs from their bill. This isn’t just causing confusion, its causing some pretty lousy tips too.
Also, since many restaurants are offering specials and discounted prices, what do you tip? Do you leave a tip based on what the total of your bill is or what you would have paid had your entrée not been on the specials menu? Let’s go back to the beginning and see if we can sort it out from there.
Tips, which actually stands for “To Insure Proper Service,” originated during the Middle Ages in Europe and came to the U.S. even before our independence in 1776. Due to age of the practice, most everyone grows up viewing tipping as a social requirement and for good reason too! About 90 percent of a waiter’s paycheck comes from the tips a restaurant’s patrons leave!
A friend of mine from college has a job for which the majority of her pay comes from tips. If the customers’ tip well, she ends the night with a heavier wallet, if not then she is financially strapped for the week ahead. We were talking about her new job one day when she flat out admitted that she wasn’t the best tipper before she got her job. That has now changed significantly.
Tips also make a difference for my step-sister who works at a coffee shop. She sometimes makes up to an extra $20 a shift because the money customers leave in the tip jar. This only brings up another question. Am I required to put money in tip jars?
I usually don’t leave a tip in the jar (sorry baristas) and find that, thankfully, I don’t get too many judgmental stares. The way I see it, a coffee shop employee’s paycheck doesn’t depend on whether or not there is money in the tip jar, it just acts as a bonus.
Another industry where tipping makes a big difference is the beauty industry. Generally, I will tip at least $3 when I get my eyebrows done, and try to tack on $5 when I get a manicure. The way I see it, cosmetologists not only have to deal with some sore sights (one word: toenails!), if you don’t tip them at all you might want to watch out next time the hot wax comes out!
Overall, don’t make tipping too difficult for yourself or too depressing for the person serving you. Here are a few simple tips to take away:
– Most cell phones have tip calculators built in, use it!
– Use good judgment and fairness when it comes to nontraditional areas that don’t have set percentage expectations.
– If you get bad service, maybe leave a 14-15 percent tip instead of 20, but don’t be too brutal.
-And, as Nicholas Demeda once said, “If you can afford to dine out, you can afford to tip well.”
Sources:
The Palm Beach Post
Bay Area Bites
Recession Requires Prescription as Americans Cut Visits
The one area of American life that was thought to be recession proof isn’t any longer. More and more people are cancelling doctor’s appointments or skipping doses of prescription medication to avoid paying the increasing out of pocket costs.
In one telling but discouraging survey done by the American Optometric Association, 36 percent of Americans are cutting back on seeing their doctors because of the recession. More specifically, 63 percent are skipping visits to their dentist, 59 percent aren’t visiting their primary care physicians, and 52 percent are skipping the eye doctor’s office.
Doctors’ are worried that if patients don’t make their different annual appointments that it will end up costing more in the end, physically and financially. One physician, Dr. Glenn Nemec, a family doctor at the Monticello Clinic said “that about a dozen of his patients have been hospitalized in the last three months as a result [of stopping their prescription medications].” Recently one patient of Dr. Nemec’s was even hospitalized for a bleeding ulcer after he stopped taking his preventative medicine.
The numbers are quite powerful as they show who is being affected. When the statistics are being grouped by ethnicity, 49 percent “[of Hispanics] indicated they are visiting doctors less often, compared with African Americans (36 percent) and Caucasians (33 percent).” When broken down by gender, women are going to the doctor’s less at 38% versus the 32% percent of men skipping.
Another, factor of skipped doctor’s visits may have to do with the federal program Cobra. This program was extended to cover 65% of the cost of the coverage and allowed the unemployed to keep their insurance for up to 15 months. However, many have met their limit and have had to drop the program. In addition, people that have been unemployed since the end of May don’t qualify for the subsidies.
Skipping the doctor’s office may seem like an easy way to save some money right now, but in the long run it can lead to serious health problems that might require a trip to the hospital.
There are other options rather than visiting your primary care physician, however. For instance, many urgent care centers are becoming more popular because you don’t necessarily need an appointment and in some instances the costs for procedures, such as a check up, can be cheaper than if you visited your normal doctor.
In addition, the American Optometric Association is offering basic eye health screenings and services for those who qualify, and they encourage people to call them at 1-800-766-4466 for more information.
Sources:
AOA survey
Minneapolis Star Tribune
Wall Street Journal
“The Great Recession”: Not As Bad As You Think
Although the current recession presents obvious financial problems for many Americans and is affecting other markets worldwide, the comparisons between this economic crisis and the Great Depression tend to be more misleading and perhaps dramatic, than accurate.
A few examples of this would be the unemployment rate. During the Great Depression the unemployment rate was 25%. Today, during the “Great Recession,” as it is being called, the unemployment rate is about 9.5%.
Another example would be the percentage of bank failures. Between January 1930 to March 1933, a massive 50% of banks failed, compared to 0.6% that occurred between December 2007 and May 2009.
Though both of these economic downfalls are unfortunate in their own ways, there are several notable differences between the two collapses.
First, one reason for the Great Depression is that banks failed. Deposits were not insured then and this caused the banks to collapse and people to lose their savings. Also, any banks that did survive failure didn’t give out loans, which prevented them from losing more money, but made life difficult for people desperate for financial assistance.
Though bank failure isn’t impossible today, there are agencies such as the Federal Deposit Insurance Corporation, or FDIC, which insure a customer’s money in banks for at least $250,000.
Next, because people simply couldn’t afford to buy anything but the necessary items, purchases went down significantly and so did the need to manufacture goods. This slowed production which caused the great amount of layoffs that made the unemployment rate soar to 25%.
Today, people may not be purchasing an excessive amount of unnecessary items, but people haven’t stopped buying altogether.
In addition, according to the Bureau of Labor Statistics employment in a variety of areas has actually increased recently. Employment in mining, manufacturing, transportation and warehousing have all increased. Additionally increases in retail, professional and business services and healthcare have also been recorded. In general, in the month of June alone, over 206,000 jobs were added to these various areas.
Overall, though this economic crisis is difficult and may require a more rigorous way of handling your finances, it certainly isn’t the downfall that was the Great Depression.
What do you think of the comparisons of this recession to the Great Depression? Share your thoughts and comments below!
Sources:
Bureau of Labor Statistics
Current Employment Stats
FDIC Website
CNN Money
merinews
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