The first peak in tax season has started, according to experienced tax pros in the H&R Block office where I’m doing taxes now. The first peak is about 2 weeks or so and is primarily those who got their W-2s and are rushing it to see how big their refund is this year. They often have children and are eligible for child tax credits and, if low income, for earned income tax credits, which are refundable and can be substantial. A refundable credit means the taxpayer can get a bigger refund than what they owe in taxes. This can be a huge big deal for struggling families.
These credits are generally watched carefully and are sometimes audited by the IRS. Refund checks for them generally arrive in early March. Block has a refund advance plan where taxpayers can get some of their refund immediately on a debit card, and also pay the tax prep bill out of the refund when it comes. So, they can get money instantly if approved (by a bank, not by Block) and not pay anything when their taxes are filed.
I’m impressed by the H&R Block training for new tax preparers like me. 72 hours of class. Many hours of study. Plus constant additional online training. The exams are open book and not easy. New preparers watch experienced tax pros do several returns before doing one on their own. Block Works software does the returns. I’m a software developer, and am impressed at how comprehensive and smart Block Works is. It walks the tax preparer through the process, has copious alerts and diagnostics, and if something isn’t right, won’t let you file the return. The preparer of course has to know what they are doing. Tax code is complex and sometimes daunting.
The second tax peak is basically the final ten days before the April 15 filing date. I’m told these tend to be grumpy people (!) who owe taxes and are not happy about it. Yes, they can file an extension. However any projected taxes owed need to be send with the extension or else there will be penalties and interest on the amount due.
There are many Due Diligence questions the tax preparer must answer. Everything must be documented and signed off on.
One nice feature Block has is upfront transparent pricing. The taxpayer answers a few questions and we can tell them in advance what their taxes will cost to prepare. So, no surprises.
It’s been challenging and sometimes hard and I’m enjoying it.