Tax Season Wrap up

I recently completed my 8^th season performing volunteer tax returns. I’ve worked in 2 states (Pa and NJ), 3 counties, and 7 centers. All but one year was performed under the auspices of the AARP TaxAide program. In several years I also worked for a local program supporting the Division of Aging and Disability in Cape May County, NJ.

This year’s location was at a local library in Monmouth County, NJ. The center was open 3 days a week. We typically had 5 or 6 tax preparers available.  We routinely had clients waiting at the door as library opened at 9 AM, and worked steadily until 5 PM. The available spots were booked early in the tax season, and we routinely had walk-up clients hoping we could fit them in.  We almost always found a way to help them.

There are a number of HumbleDollar contributors who support their communities in this way.  Howard Rohleder and Dan Smith provided great summaries of their experiences this tax season (here and here). Their communities are lucky to have such dedicated and talented volunteers.

Our site had similar experiences to those described by Howard and Dan. There was confusion over the new tax provisions. Many clients were convinced that their Social Security benefits are no longer taxable. Some were happily surprised by the new $6,000 bonus senior deduction.

The IRS provides the tax preparation software TaxSlayer. It has a very different user interface than TurboTax, but our training is adequate to get started.  It does a good job with the federal return, but can be clunky with state returns.  New Jersey has a complicated state income tax code. The state also has a number of property tax relief programs, with different eligibility requirements (age, income, home ownership).  The interaction between the federal and state portions of the software is often challenging or incomplete. We frequently have to do extra calculations to get the state return right.  TaxSlayer does not support property tax relief applications, so we do those by hand when requested.

Some statistics to give you an idea of the scope of the program.

• Nationwide, the AARP TaxAide program completes about 1.7 million tax returns
• The Monmouth County organization completed over 3100 returns.
• Our site completed about 500 returns.
• Our oldest taxpayer was 98.
• We had 9 clients in their 90s.
• About 56% of our taxpayers were age 65 or older
• The highest Adjusted Gross Income (AGI) at our site was $263,248.
• At our site, we had five returns with AGI over $200,000 and four over $100,000.
• At our site we had 76 taxpayers with AGIs under $10,000.

Completing a client’s tax return is a surprisingly intimate act.  Clients frequently offer details about their families, their health, their jobs, and, occasionally, their politics. The trust and confidence our clients show in us is humbling. We frequently wish we could do more to help them organize their financial lives.  Most are extremely grateful for the help we can provide.