I just spent the last two months with a bunch of nerds. This was my second year as a volunteer tax preparer for AARP, in Bowling Green, Ohio. If I wasn’t a nerd when I signed up, I certainly am one now. Just kidding, I’ve been a nerd all along.
I’ve jotted down some comments from clients as well as some things that made a mark on my memory from the season.
- In preparation for the phasing out of refund checks in the mail next year, the IRS has made receiving one this year a pain in the butt. Many of my fellow boomers insist on receiving a refund check in the mail. We explained that the IRS would send a letter asking them to register online in order to provide banking information. If they still insisted on a check, the IRS would sit on their money for another 30 days before beginning to process it. Now we are receiving calls from the folks we warned, asking us what this letter is all about.
- Several clients insisted their Social Security was no longer taxable. That was, of course, not true.
- There was a new bonus deduction of $6,000 if you were 65 or older and fell within the income limitation. One young couple wondered why only old people got the deduction.
- The new tax deduction of up to $10,000 for interest on the purchase of a new US built car offered a little relief. One client boasted that he would never buy a foreign built car. I had to tell him that his GMC Terrain was built in Mexico.
- Many public sector retirees received increases to their Social Security income due to the repeal of the Windfall Elimination Provision. It was interesting that some were unaware of the increase, or had no idea why they got a raise.
- Of course the number of new forms and worksheets continued to bulk up your tax return, as well as the price most preparers charge. What ever became of the promise of a postcard sized tax return?
- Some news that many of us can use. Beginning in the 2026 tax year, non-itemizers can claim a deduction for cash donations to qualified charities, capped at $1,000 for single filers and $2,000 for married couples filing jointly. This deduction is taken in addition to the standard deduction, which rises to $16,100 (single) or $32,200 (joint) in 2026.
- There was a lady who told me that after she paid her rent, she only had $100 left for the rest of the month. I know there are many people in similar situations. At least AARP was there to offer a free tax return.
- This is another sad one. I sat across from a couple as I reviewed their documents. I quickly determined that the woman was the partner who handled all things taxes. I typically endeavor to engage with the passive partner in order to help them understand taxes, and to generally make them feel a part of the process. Still, the man sat without expression as I spoke, almost as if he were in a catatonic state. At the end of the interview, the wife slid his chair a few inches away from the table, and the man moaned in pain. She asked if I could assist her in raising him from the chair. He was like lifting dead weight. Another of our clients, seeing him struggle, came over and helped position his walker. I’ve been thinking about these folks since that day, wondering about the quality of their life. It seemed that his pain was such that there was little to no relief. For his wife, the stress, both mental and physical, could surely destroy her health. Is anyone helping them? And I wonder about their past life. Was their life together good? Did they enjoy the go-go years? Were there any go-go years? Is there a message for us, that we should make the most of our remaining go-go years?
Perhaps my fellow HumbleDollar tax nerds can add a few thoughts of their own.
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We had an interesting situation yesterday at our VITA (Volunteer Income Tax Assistance) site.
A young man in his 20s asked us to file an amended 2024 tax return. He wants to get his legitimate refund of $1,000+. He had a paper copy of his 2024 tax form, which he had received from the IRS.
A year ago, someone on Facebook approached him and offered to help him file his taxes. No upfront fee. The preparer would simply take a percent of the refund.
Our client gave the preparer his SS number and W-2 information (about $25,000 of income). The preparer submitted taxes for our client. In round numbers, the preparer (scammer) added $150,000 in dividend income and $50,000 in tax payments. Tax liability was $20,000. Overpayment of $30,000. The scammer also listed his own bank account numbers for direct deposit of the refund.
The IRS never issued a refund. It sent our client a letter stating it would not issue the refund because it could not verify the $50,000 in tax payments.
Moral – Don’t give your name, SS number, and tax information to strangers on Facebook.
I am going to send our 20-something year-old grandchildren an email describing this. I can understand how someone could fall for this. A person just wants to get their taxes done. This seems like a quick and easy way to do it.
Wow. You probably already suggested this, but be sure to have the client get an IP-Pin from the IRS, as there is no way to know where his SS# and personal information has ended up.
Great suggestion. Thank you. I had not thought of this, but I should have. (This is the first year I requested an IP-PIN for both my wife and me.)
One reason I like HD is because of the great ideas I get from others.
I do really appreciate your suggestion, Dan. Our client is coming back in this week. I will definitely suggest an IP-PIN.
As a matter of fact, I think everyone should use an IP-Pin.
Dan, Kenneth, Marilyn, Alistair (and others, I think Rick Conner does this too?), thank you for serving the less fortunate with your knowledge and talents. What a great service and demonstration of charity.
I volunteer with AARP Tax-Aide. Did tax two returns for people who had ITINs (9-digit tax identification numbers issued by the IRS to those who don’t qualify for a Social Security Number (SSN)) and W-2s which contained a SSN that was not their ITIN. I was impressed that they were willing to still file their tax returns despite the current immigration environment.
I’ve seen that too. According to one of our volunteers who used to work for the IRS, it’s pretty common.
This is a legit concern among immigrants that have permission to be here.
To your #7, the deduction is below-the-line and has no affect on AGI or MAGI.
Good catch, B. I made the same mistake describing the senior deduction, last year. I relied on quick details from AI, instead of digging deeper. I should know better.
I would have added my comments earlier, but I spent the day doing tax prep through VITA at Goidwill. Doing someone’s taxes is like looking at their X-rays— nothing is concealed. Here are some things I’ve learned.
Marilyn, this wonderful reply could have been a stand-alone article. As a long time preparer, I have watched families grow through the preparation of their taxes.
Regarding divorced women, I’d say it’s especially true for those who raised families.
Cleaning homes is no picnic, but being a Certified Nursing Assistant (CNA) has to be both physically and mentally exhausting. The pay seems low, and I’m not surprised at the turnover.
And bravo to your age 91 client. I had a similar client, Betty, who would furnish me with 50 year old purchase confirmations for the stocks she sold during the year; she was amazing. One time, Betty shared with me that she had a ‘special’ friend she was going to see after our appointment. Another of my younger clients who had been waiting in the next room overheard Betty’s comment. Upon coming into my office, Melissa said to me, “I hope I have a ‘special’ friend some day”. Both Betty and Melissa initiated hugs as they left my office. I miss my clients.
Your number 6 is a good summation. Perhaps not all, but most do seem happy, and I could say the same about my more ‘well off’ clients. Money is not everything.
Thanks for this excellent post.
In our retirement community, there are clearly discrepancies between the ‘haves and have-nots’. But, for the most part, they are all happy and living their best lives.
Exactly! Money is an important contributor to a good retirement, but not the only one. I should also mention that Andy, our Norfolk terrier, has perfectly trained my husband!! The dog will never win any best in show prizes, but he’s a constant source of entertainment.
I love Norfolk terriers! They are such characters!
Having ‘enough’ money is a good thing, but it certainly doesn’t guarantee happiness.
Hmn, I thought cats were the only animals to train their humans😸
Dan, this is my first year as an AARP tax preparer in Fort Wayne, IN. I would characterize the experience as eye-opening. It has been educational for me to get out of the finance/retirement nerd bubble and see how others view the world, both financially and otherwise.
Kennith, seeing how others view the world is a very interesting aspect of what we do. I hope you enjoyed the season and that you come back for more next year.
Dan, thank you for an installment of “Tales from the Trenches”. I could provide a similar list from healthcare. It seems some folks are just not blessed with enough mental capacity to understand information that is obvious to others. Then again, the fabric that holds our society and our lives together is so complex, it’s hard for anyone to cover all the bases alone. I think it’s wonderful that the AARP team is helping out with tax prep. Good job.
We just started Medicare last year, and I set up our online accounts and our “Easy Pay” automatic deductions. I have no idea why this is, but the payment thing gets screwed up for one or both of us almost every month. Our payments are supposed to come out on the 20th, I always check, and if something goes wrong, which it often does, I then log into the account and see if the payment’s been made (not). The page assures me that I am (or he is) enrolled in Easy Pay and we don’t have to make a payment. Yet the payment hasn’t been made. I ignore the advice and make a payment anyway to keep us up to date.
I find this worrying. I’m 65 and still stay on top of things pretty well, I’d say. But what if I were 75 or 80 or whatever age experiencing cognitive decline? What if I were not good at checking my bank account and my Medicare account online? It shouldn’t be this hard. It should be seamless.
Are you not collecting SS now so premium can be deducted from your monthly payment?
Dana, I have no idea if this is relevant to your problem with Medicare payments. When a client signed up for an IRS debit, the debit would not show up until several days after the requested date. Hopefully this is the case with Medicare as well.
Edmund, the people we help are so appreciative of what we do. I bet the people you help recover from surgeries and injuries appreciate your efforts as well.
Chrissy was always taking goodies for the Physical Therapists after her knee surgeries.
Dan, I am not surprised by your observations. This lack of information is displayed and rampant in social media posts and much worse.
Didn’t anyone tell you that Congress stole the social security funds😱
NJ has several property tax relief programs, but when I talk to friends and relatives many have no idea how they work and of course, the info is all readily available.
Shortly after moving into our newly constructed home, I checked our county auditors website to see if we were being given the tax credit for owner occupied homes; we were not. I took another minute and checked on other homes on the street and found that no one else was either. I posted a message on the HOA Facebook page, along with instructions on how to get the credit.
There is also an income based Homestead Tax Credit, worth up to $600 per year. I left instructions and links for eligible people to apply.
Several neighbors thanked me, some were able to snag both credits. These things are not hard to do, but they’re just not in some people’s wheelhouse.
It’s all readily available but you still have to know to look.
I have a good friend who was recently surprised by IRMAA. I don’t mean surprised by crossing a threshold by a dollar, I mean they had never heard of it until they had to pay it. I’m talking about an extremely intelligent guy who would have considered himself well informed, as I would.
Of course I’m a proponent of looking for oneself, it’s just that our systems are so complicated, and we don’t know what we don’t know.
Complicated, yes. Difficult to learn, no. The real challenge is just being aware of things around us or more accurately wanting to be aware. Many people have little interest in things that affect them everyday.
I’m cursed the other way. An often heard phrase in our house is “what are you doing on that iPad now.?” What I’m doing is reading papers, looking at data, reading Project Syndicate, reading the last SS Trustee report, HD and other blogs. HD is where I learned about QCDs.
Connie and I will be having a discussion and to learn more one of us will say, “ hey Google…”. Same in the car, a topic pops in my head or a question and it’s a simply “hey Siri…”
Now I find various AI programs are great for aggregating many sources (and giving you the reference links).
I am often shocked about the misinformation floating around, especially about SS, Medicare, Congress, health insurance and more. Where do people get some of this nonsense?
Why don’t they make the slightest effort to learn the truth? I wish I knew.
By the way, did you know there are over 600 Revolutionary War battle, skirmish and burial sites in NJ? Not an extremely important piece of information, but a bit of knowledge nevertheless. 👀
Years ago, I was only vaguely aware of IRMAA. I processed a tax return for a married couple, and was able to save them about $1000 by using the Married Filing Separate (MFS) status. Two years later they were hit with the IRMAA premium which was much greater than the $1000 saved on their income tax. I was able to amend the tax returns and secure refunds on the IRMAA charges.
So beware, the reduced income thresholds for IRMAA, when using the MFS filing status, are brutal.
I was aware of IRMAA but my wife and I did not have to worry about it MFJ. She passed away in 2025 and I will hit the first threshhold premium for 2026. No way to avoid it. MFS is exactly half of MFJ. I guess I should not complain but I wonder how may people are surprised about this.
Just to be clear about differences in the surcharge, single vs. married filing separately. The Medicare part B premium for a single person earning above $109,000 but under $137,000 is $287.10 per month. The premium for married filing separately with income above $137,000 is $649.20 per month.
It’s a little scary how naive some people are about taxes or even finances in general.
I will never forget going to a ‘pre-retirement’ planning meeting at the college where I used to work. It was designed for people who were within three years of retiring. The first year I went, there was an employee there who had been working at the college for nearly thirty years. When the TIAA representative gave their presentation, this employee asked what “TIAA” was–they were completely unaware that the college had been contributing money to their retirement account for almost three decades.
That said, I guess it’s better than thinking your employer has been contributing money to an account only to find out thirty years later they weren’t…
I used to run a similar program at our company and the lack of info or amount of misinformation was scary. The most misunderstood was related to survivor pensions and health benefits for a surviving spouse. It was very sad.
Kristine, maybe schools need to teach a class about ‘due diligence’. Daily life requires that we take care of immediate priorities such as familial or occupational concerns, but how about at least some minimal due diligence when it comes to things like financial literacy or the ingredients inside our bags of Fritos? (Disclaimer, I love Fritos but rarely indulge).
When I was in high school (the early 1980’s), I had to pass a series of “competencies”. They were real-life skills that were designed to show that we could do basic life skills.
We had to count back change from a purchase, write a check and show we could balance a bank statement. Not all the skills were finance based, but at least a few of them were.
In our retirement community, I have met a few folks who seem to be painfully uneducated about personal finance.
OMG, Kristine, I taught my daughters how to count back change. It’s a lost art, sort of like cursive.
The counting back change competency was my most feared one! I have a similar fear of four way intersections with stop signs…
We have a friend who worked as a bartender in London for at least 35 years. His employer told him he was putting part of his pay in a savings/retirement account (no idea what kind). The pub ended up going out of business, the owner took off for parts unknown, and if there ever was any money put aside for our friend, it was gone now.
He is completely financially illiterate, but luckily lives in a country that provides housing and free medical care. He gets a small state pension. We have no idea how much money he lost over the years, but it would certainly have afforded him a much more comfortable retirement.
David, to my above thought about doing one’s due diligence; if only he had asked his employer for account statements.
“For his wife, the stress, both mental and physical, could surely destroy her health.”
My Dad dealt with my Mom’s Alzheimer’s symptoms for more than a decade. He wouldn’t ask for help, and reluctantly decided too late to move to assisted living to make any social connections before they moved to a nursing home about a year later.
A few years before he passed I said to my wife the stress was making him speed past my mother in decline. Sure enough he passed away six months before her. This has made me promise to myself that we will go into a CCRC earlier rather than later and save our children from the same scenario.
On the lighter side:
Question: “What ever became of the promise of a postcard sized tax return?”
Answer: The promise was made by a politician.
We went through a very similar progression with my husband’s mother and stepfather. He ignored/denied her symptoms for years until she went missing for four hours one day in early 2020. It was terrifying. He put off getting any outside help for way too long. She wasn’t safe and it wasn’t good for his health, either. He finally agreed to move her to memory care, and she died barely three months later. He’s actually doing better now that the stress of caring for her and making decisions is behind him. He’s had a hip replacement, shoulder surgery, and just adopted a puppy! He’s even taken a few trips with friends and family. He’ll be 84 in June.
But my husband and I have the same train of thought about CCRCs because of observing this. We took our first tour of one in February!
My client was a retired Air Force Colonel and fighter pilot who flew sorties during Vietnam and the first gulf war, a true American hero and one of the most robust age 80 people I have ever known. When his wife suffered a devastating stroke, he spared no expense in getting her the best care available. He also spared no physical expense to his own health, costing him his life.
It’s wise to think about that CCRC before catastrophe strikes. Several HumbleDollar contributors helped put CCRCs on my radar.
Dan, I really enjoyed your post, probably because I now handle everything to do with our finances (my spouse’s cognitive issues meant making changes.) I use a very good preparer, but I’ve learned how to assemble all the details she’ll need.
Meanwhile, I just want to weigh in on the sub-topic of CCRCs. My father & mother set an example – they lived happily in a nonprofit CCRC in the 1990s until they died, as my mother sank deeper into Alzheimers’ Disease.
I became a fan of the concept, and we started visiting choices available where we live and went on the waitlist in 2019. Best decision we ever made, we’ve been very happy here for more than 3 years.
I encourage people to move in while they are still healthy and able to handle the stress of the move (mid-70s for us). I’ve made lots of friends and done a lot of rewarding volunteering. I strongly recommend finding a non-profit like ours with a large endowment and a culture of friendliness and volunteerism. They’ll probably have a high occupancy rate in the 90%+ range and a waitlist of several years.
Like Kristine, the discussions around the specifics of CCRCs – the types, the fees, the variations in lifestyles – was such an enlightening topic on HD! I am thankful that Kathy (as well as others) shared her extensive knowledge and real life experience with us. I learned so much and even reached out to some last year to learn more.
I also appreciated all of Kathy’s information about these facilities.
Me too–I wasn’t even aware of CCRC’s until reading about them on HD.