Another reason newspapers are going out of business

What moron hired this moron?

Ack! How could I owe so much? Get me a CPA!

I wonder how much mortgage interest she had to be paying to cause a such a huge flip going from thousands owed to thousands back. Isn't there a limit to how much mortgage interest is deductable?

lonestarguy said: I wonder how much mortgage interest she had to be paying to cause a such a huge flip going from thousands owed to thousands back. Isn't there a limit to how much mortgage interest is deductable?

I think there were more problems on that return than just the mortgage interest. He seems so lost he cannot even figure out what the accountant was doing. For instance:

The Roth IRA? Only the paltry interest we earned on it is taxable, not the entire contribution.

The mortgage interest was not the only change. It sounds like she was also trying to pay her tax rate and a 10% penalty on the entire balance of a Roth distribution, plus missed depreciation on two rental properties and a business incentive for the purchase of a laptop.

This is a retarded article. I wonder which moron employed this dude at the first place.

Eh that wasn't the worst thing I've read recently-I read much much worse crap on MSN/Yahoo/google/whatever news daily. I don't think this was supposed to be a Watergate expose, just some little column. The guy even makes a good point- sometime trying to save $200 using TurboTax isn't the best idea, especially if your taxes become complex. I once was using TurboTax or TaxAct or something-I hadn't entered my kids SS#'s (didn't do it initially since I didn't have them at hand) and when I went back to finish it up I had forgotten that I ddin't put them in. TurboTax showed that I owed a lot, no flags no nothing- I proofread my return carefully and found my mistake. Dumb mistake? Yup. TurboTax catch it (a blank for the SS#)? Nope. If I had paid a CPA a few hundred to do it would they have? Yes. Moral of the story.

fasttimes said: What moron hired this moron?

Ack! How could I owe so much? Get me a CPA!

I think we should all e-mail this guy with that catch phrase:

"Hey, moron, what moron hired you"?

Should we time that on April 15th?

If I found out after doing my taxes that I owed $2,500... I would probably fall to my knees in a teary mess and heartfully return to Christ's flock and thank him for his precious gift to me.

cak144 said: For the 2008 return, I would like to know how reclassifying 1/2 of mortgage interest from rental (business) expense to itemized deduction is going to reduce taxes. It just moves the expense from one bucket to another -- no effect on taxable income. It does, however, increase adjusted gross income, which would increase state income tax in most states. The writer also said that one change of omitting the mortgage interest in 2009 flipped the tax from a $5,000 bill to a $5,000 refund -- a difference of $10,000. Doing a quick and dirty calcuation. Assume a mortgage of $500,000 (probably generous) and a mortgage interest rate of 5%. This amounts to interest of $25,000 for a full year and the writer implied that it was only for a partial year. Assuming a tax rate of 30% on mortgage interest deduction of $25,000 gives a tax reduction of $7,500. A change of $10,000 seems nearly impossible for this one change in my opinion. I wonder about the competence of the the tax preparer.

You would also think that a person would take a look at the prior year's return and compare some of the amounts -- such as mortgage interest. To completely overlook a mortgage interest deduction as large as the taxpayer apparently did, they would have to be an idiot.I didn't read the article but it is clear to me why allocating more interest to schedule A could reduce taxable income and tax due. Rental losses can get suspended for various reasons. For example, if you have high income and you aren't a real estate professional, you can deduct $0 rental losses. The losses get suspended and carry forward to future years. Move some of the interest to schedule A and all of a sudden something that was previously being suspended becomes deductible.

It sounds like the $10K change is due to a bunch of changes made (taking missed depreciation, allocating interest to schedule A, a IRA distribution that was entered incorrectly, and who knows what else).

What you can't see from the online version is that this was the above the fold article on the front page of the Sunday business section, and it had a huge illustration of this horrified screaming woman. And this passes for journalism?

Oh, BTW, the author is a woman, not a man. Still a moron though.

larrymoencurly said: Why? It's not the only good newspaper, and it's not even the best. Here are the 10 biggest papers. USA Today is #13

I wonder how big they would be if they left "newspapers left at the door of your hotel room" out of the count?

wordgirl said: I find it really ironic that so many of you are blasting newspapers yet lack the basic reading comprehension to discern that the writer was a woman. (It was a fairly key point in her narrative that she and her husband were filing separate returns.)
Her gender is not a key point. In fact the author's gender is irrelevant. The key point here is a person who can't do their taxes. We're not going "Look, a girl who can't do math! Of course, it's because women suck at math! LOL LOL LOL".

kamalktk said: wordgirl said: I find it really ironic that so many of you are blasting newspapers yet lack the basic reading comprehension to discern that the writer was a woman. (It was a fairly key point in her narrative that she and her husband were filing separate returns.)
Her gender is not a key point. In fact the author's gender is irrelevant. The key point here is a person who can't do their taxes. We're not going "Look, a girl who can't do math! Of course, it's because women suck at math! LOL LOL LOL".

Her gender is not nearly as irrelevant as the OP's title for this thread, which is what really irritated me.

I did find it ironic that so many FWF regulars missed the chance to talk about how stupid women are. But it's because, you know, they failed to catch that little detail. They also failed to acknowledge that the writer had a fairly complex tax situation on her hands: I'm married, own a home, refinanced last year, claim two rental properties, receive income from three jurisdictions plus some freelance wages and closed out a stagnant Roth IRA.

Being smart at math has very little relation to being able to do your taxes - basically, the math is just arithmetic. The real challenge is to decipher the tax code. Any year that my taxes are unusually complicated, I'm going straight to a professional too.

wordgirl said: Her gender is not nearly as irrelevant as the OP's title for this thread, which is what really irritated me.

I did find it ironic that so many FWF regulars missed the chance to talk about how stupid women are. But it's because, you know, they failed to catch that little detail. They also failed to acknowledge that the writer had a fairly complex tax situation on her hands: I'm married, own a home, refinanced last year, claim two rental properties, receive income from three jurisdictions plus some freelance wages and closed out a stagnant Roth IRA.

So if they referred to the author as "she" you would be up in arms that they were only attacking the writer because she is a woman, and if they use the gender neutral "he" or ignore gender altogether, they are idiots for failing to "catch that little detail."

You're working way to hard to find things to be outraged about. I'd suggest going to a different forum, or maybe Facebook, and start complaining about some of the group out there.

As far as the OP, I tend to agree; the writer spent no time learning about taxes. A couple days with some Internet research and books and she'd have been fine. But like so many people she failed to do even basic research. With a job as a professional reporter, you'd think she would be very good at research.

What I find amusing are the people who think that if a CPA does your taxes that you're somehow immune to penalties, etc.

Protip: If they make a mistake, the IRS will come looking for you.

Very nice. I can certainly help her with doing taxes...

I never really understood the value of CPA's in doing taxes. 70% of the effort in filling out tax returns is gathering all of the relevant information. CPA's can't help with this step, you still need to do it yourself if you use a CPA or not. 20% of the effort is figuring out any special cases (rental properties, foreign earned income, deduction limits and policies, etc.) and this is exactly the area that CPA's can provide the most value. But it's only 20% of the effort and Google works just as well as a CPA for figuring out the answers. The final 10% is entering the information on the tax form/software which is relatively simple. CPA's, a 5th grader, or even this reporter could do this part.

So if you have to or can easily do 80% of the work yourself, why not just do the extra 20%?

I once tried to use a CPA for taxes when I first moved overseas. I had income from two states and foreign earned income and my taxes weren't trivial. I got quotes from CPAs in the range of $1000-$2000, and this was 15 years. So, I went through the process myself, and sure it took a day to figure out, but it was trivial for the next 10 years I lived overseas.

Qzic said: I never really understood the value of CPA's in doing taxes. 70% of the effort in filling out tax returns is gathering all of the relevant information. CPA's can't help with this step, you still need to do it yourself if you use a CPA or not.Some people might overlook relevant information and need a CPA to remind them what to look for or where to find it, so CPA's can help with this step for those who aren't as familiar with the US tax system, are elderly, forgetful, etc. If someone is on top of things and knows exactly what they need to report, then the value of this personal service is significantly diminished and as you noted it makes much more sense to just do it yourself.

Qzic said: I never really understood the value of CPA's in doing taxes. 70% of the effort in filling out tax returns is gathering all of the relevant information. CPA's can't help with this step, you still need to do it yourself if you use a CPA or not. 20% of the effort is figuring out any special cases (rental properties, foreign earned income, deduction limits and policies, etc.) and this is exactly the area that CPA's can provide the most value. But it's only 20% of the effort and Google works just as well as a CPA for figuring out the answers. The final 10% is entering the information on the tax form/software which is relatively simple. CPA's, a 5th grader, or even this reporter could do this part.

So if you have to or can easily do 80% of the work yourself, why not just do the extra 20%?

I once tried to use a CPA for taxes when I first moved overseas. I had income from two states and foreign earned income and my taxes weren't trivial. I got quotes from CPAs in the range of $1000-$2000, and this was 15 years. So, I went through the process myself, and sure it took a day to figure out, but it was trivial for the next 10 years I lived overseas.
I think if you're willing to spend the time and effort to acquire knowledge of the tax laws and to keep up with the changes to those laws and how they impact your tax planning, then, by all means, do your own taxes. Although I re-evaluate this each year, using a competent professional tax preparer has been worthwhile for our family, not just in terms of savings that I might have overlooked, but in terms of peace of mind. It's hard to put a value on the latter.

Still, there's always next year...

Her fb:
http://www.facebook.com/#!/photo.php?pid=31055948&id=1402732107&fbid=1394534789054

Crazytree said: I think the author has been very naughty, and deserves a good spanking.

I will quiz her about various topics covered by the Internal Revenue Code, and each time she gets an answer wrong... she will be spanked, and mercilessly.

None of the oriental girls can run from crazytree