As April 15th Approaches, Jackson Hewitt Offers Tax Tips

By Rosaland Tyler

Associate Editor

New Journal and Guide

NORFOLK

As some customers of Mo’ Money Taxes wait on refunds, and the Norfolk Police Department investigates the Memphis-based tax preparation service, Jackson Hewitt is offering tips to taxpayers.

The second largest tax preparation service nationwide, Jackson Hewitt operates more than 5,802 franchises and 724 offices. About a fourth of the New Jersey-based company’s offices are located in Wal-Mart and Kmart stores. It prepares over 2.2 million returns each year.

So what’s new this year? The deadline falls on a holiday, so the new deadline is April 17 but it only applies to those who owe money on the 2011 personal tax return. Also, the first-time home-buyers credit is due.

“The biggest change this year that affects most filers is the loss of the Making Work Pay credit, which was $400 per person ($800 on a joint return) that’s been in effect for several years now,” said Carolyn Buzek, of the Jackson Hewitt franchise in the Norfolk area. 

“Many people have mentioned to me that they really miss that extra part of their refund,” Buzek continued.  “In fact, it’s causing some people to owe for the first time.  The requirement to repay the first time homebuyer credit only affects a relatively small number of taxpayers.  The self-employment health insurance deduction is still allowed, but only as a deduction on the front of Form 1040 and no longer on the SE form.  Again, this affects fewer people.”

The standard mileage deduction has increased. “The amount allowed for the standard mileage deduction has once again been increased,” Buzek said.  “There is a new form that doesn’t change tax liability – just the way capital gains and losses are reported.  It’s Form 8849.”

As many tax preparation services routinely process tax returns and distribute refunds in Hampton Roads, Mo’ Money made headlines by processing and not returning some tax refunds. For example, Rhoda Williams, a Norfolk resident, said she went to the Mo’ Money office on Little Creek Road on Jan. 10 to file her return. She said she did not get a copy of the paperwork. They would not tell her the specific amount of her refund.

Williams said Mo’ Money employees first told her to expect her refund between Jan. 24 and 28. The date was pushed back and she finally received a check on Feb. 15. It was $900 less than she expected and the $900 was deducted as a fee for Mo’ Money.

Unable to cash the check, Williams contacted the Little Creek Road store. A representative said Mo’ Money mistakenly printed two checks for Williams, and “they accidentally put the verification number for the first check on the second check,” Williams said.

Williams was told to return the check to Mo’ Money in Memphis via overnight mail, which Williams said cost her nearly $19. He promised that she would get a good check immediately. She said she still hasn’t received it.

“I feel like they took my money and just walked away with it,” Williams said.

Do your homework before you pick a tax preparer, Buzek advised. “Ask how you can contact the company after tax season is over.  Ask how long have they been in business.  Ask your tax preparer about his or her credentials – years of experience, length of tax classes taken, etc.  And last but not least, ask about a guarantee of accuracy.”

Two friends of Williams who filed returns with Mo’ Money received refunds. However, at least 10 other customers she knows are still waiting. “They sent enough checks out for the news to calm down a little,” Williams said.

Be informed, said Buzek, who has been involved with Jackson Hewitt since 1982. “I recommend Jackson Hewitt because we stand behind our work,” Buzek said.  “We are available year round. 

“The IRS is in the process of standardizing the tax preparation industry,” Buzek continued.  “The initial step was to require that all paid tax preparers get a PTIN  – a preparer tax identification number, which is in effect this year.  Additionally, it will soon be a requirement for all paid preparers to pass a background check and pass a written exam.  Jackson Hewitt has been encouraging the Internal Revenue Service to take this type of action for years now.  In fact, we have required that all of our tax preparers to take and pass a written exam for at least five years now.”

The local investigation, which could take months, shows that more than 1,700 returns were filed by Mo’ Money in Norfolk.

Meanwhile, the state Office of Consumer Affairs has sorted through five complaints since Feb. 6. The Better Business Bureau has awarded Mo’ Money in Norfolk a grade of F on its website, citing “government actions” against the business. In 2010, the Arkansas attorney general sued Mo’ Money for deceptive trade practices.

In a “consent agreement” in November 2011, Mo’ Money agreed to pay the attorney general’s office $25,000, to be used for consumer protection, though it denied violating the law. It must pay an additional $50,000 in five years if it violates the terms of the agreement.

So the three biggest tax tips of the season are clear. Do your homework. Go to reputable, well-established tax preparation services. Don’t necessarily try to do it yourself.

“While there may be a few tax returns that an untrained taxpayer could complete and potentially come up with the correct refund, there are many returns that appear to be simple but could have complicated issues,” Buzek said. “ Subjects such as: (1)what is my filing status and ( 2) what is a “dependent” and how many can I claim may seem easy to answer but really are not,” she explained.  “Frequently the cost of using a professional tax preparer is more than offset by the dollars saved on additional deductions with which a non-professional may be unfamiliar.”