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Taxpayers Say the Darndest Things

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AUTHOR: DAN SMITH on 10/02/2025

Significant changes to tax law took effect in 2018. I heard some interesting comments from clients. Some didn’t believe taxes went down because their refunds didn’t increase. To be fair, taxes did go down for most people, but so did tax withholding from paychecks, keeping many refunds level with prior years. I guess people didn’t notice the extra take home pay. 

The other thing I sometimes heard was that they thought their tax return would fit on a single piece of paper. That one made me chuckle because all of the lines eliminated from Form 1040 found their way onto a handful of new schedules, making for more pages than ever.

What might preparers hear and see this year?

 

  1. Clients will show up with clipped articles about the changes, just to be certain we don’t miss anything.
  2. Younger clients will complain about not being able to take the new $6k/$12k deduction for seniors. Some may try to furnish false birth dates. That doesn’t work because the IRS knows when you were born.
  3. Taxpayers with no tip or overtime income to deduct from their taxable income will curse those who do. 
  4. Someone will buy a new car, not understanding the difference between a tax credit and a tax deduction. “I’m supposed to get $10K back for the interest on my new truck?”
  5. Some will cheer lower taxes and moan about the deficit in the same breath. 
  6. A few might even notice how long and confusing their tax return has become. 
  7. Finally, some will be upset that the price of preparation increased. Well, new laws mean additional work for preparers, which translates into higher fees for taxpayers. 

 

Of course there are the recurring questions we hear every year.

1. “I’m filing as head of household,” a client told me.

You can’t be head of household,” I explained. “You don’t have any dependents”.

“Yeah, but I’m still the head of my household.”

2. Why does my friend get a bigger refund than me? We have no idea why, and if we did, we are not allowed to tell you. 

3. That income doesn’t have to be on my return, they already taxed me on that! We often hear this one when a worker takes an early withdrawal from a 401K and has tax withheld, or when a casino withholds taxes on a jackpot. 

Feel free to add to the list.

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Hall Plante
21 days ago

Actual Scenario:
Taxpayer added second job, which led to higher AGI, which reduced its refund compared to prior year when it had only one job.

Taxpayer stood up in a huff and declared they were quitting their second job.

Taxpayers say the darnest things.

[Scenario happened during AARP Tax-Aide shift]

Last edited 21 days ago by Hall Plante
VSB
21 days ago

“I guess people didn’t notice the extra take home pay.” I’m not surprised. With the higher cost of everything these days, the “extra” is gone before anyone can notice!

Greg Tomamichel
25 days ago

Apologies for going on a mild tangent.

We recently completed sale of our business, and made an appointment with our accountant to get advice on how & when to distribute the proceeds of the sale.

After a (modererate) windfall from the sale, I was expecting a significant tax bill. But the advice and guidance of an experience tax professional meant we will receive refunds for several years into the future. To my very simple understanding, this is due to previous tax paid by the business, which included franking dividends (for context, we are in Australia).

I have huge admiration for those that make all the effort to understand tax laws and then provide such high value advice to their clients.

Greg Tomamichel
24 days ago
Reply to  DAN SMITH

Thanks Dan.

“Selling our business – the aftermath” coming soon!

Harold Tynes
25 days ago

I’m an AARP tax preparer. I fully expect to spend a lot of time explaining why people are paying tax on Social Security. This was a promise made by Trump that was not delivered. There was a fair amount of discussion during the 2024 return season and I advised my clients to not count their chickens.

R Quinn
24 days ago
Reply to  Harold Tynes

Is paying tax on a portion of SS widely misunderstood or simply disliked because it is a tax?

The logic behind the tax is simple and similar to taxing a pension plan, even a contributory one.

But I get it, many people think they paid for their SS benefit via FICA.

When I get in that discussion I ask the person if that is true, why don’t your SS benefits stop at the point you have collected an amount equal to the taxes you paid.

I hit that point eight years ago.

Ormode
21 days ago
Reply to  DAN SMITH

Yes, a brilliant idea.
“We need money to pay Social Security benefits – where can we get it?”
“I know, let’s tax Social Security benefits so we can continue for pay those benefits.”

R Quinn
24 days ago
Reply to  DAN SMITH

Pretty much as I suspected. Thanks.

People don’t realize that SS is much more than a workers monthly retirement benefit.

Spouses, ex-spouses and children can collect benefits without paying a penny in FICA.

One thing I find interesting is that two workers with identical earnings and work records can get vastly different family benefits, one married and one single. Even if the marriage was only a year long the payment can be bumped up 50%

Nick Politakis
25 days ago

It would be easier to be a brain surgeon than to be a tax preparer. Fortunately AI will make both jobs obsolete.

Mark Crothers
25 days ago
Reply to  DAN SMITH

Well, if you can find the brain connection that stops me from running on with my mouth, Suzie will definitely give you permission 😉

Mike Gaynes
25 days ago

Being childless, I never got to file as head of household until my MIL and SIL came to live with us. Now, pushing 70, I finally have dependents.

You know what? It feels great.

Olin
25 days ago

I decided this year I’ll give the IRS more, rather than them saying I short-changed them. Grandkids can be the same way, but for different reasons.

Jeff Long
25 days ago

I heard those, too in my 40 years as a CPA; many had their refunds spent before coming in!

David Lancaster
20 days ago
Reply to  Jeff Long

That’s the good ol’ American consumer!

baldscreen
25 days ago

It will be interesting to see what happens, Dan. I have read that some people may get larger refunds in 2026 b/c the new withholding won’t be changed until then to reflect what is in the OBBB. (Like for tips and OT). I saw the Dinkytown calculator had been updated recently, and we will pay less than I had thought. I am going to wait until we do our taxes to see how much I need to adjust. Chris

David Lancaster
20 days ago
Reply to  baldscreen

I’m taking advantage of the new law by converting an extra 12K per year into a Roth while paying the same amount of tax as last year.

Still not sure I will be able to totally convert her entire traditional IRA over the next two years and still stay in the 12% tax bracket before I collect my maximum Social Security benefit in two years, and maybe not even before my wife turns 73 and would be required to take RMDs. Avoiding having to take RMDs from two accounts and having all her retirement account tax free going forward for our children to inherit is the goal.

Last edited 20 days ago by David Lancaster
William Perry
25 days ago
Reply to  DAN SMITH

It sounds like you have decided to utilize the OBBBA senior deductions to go small on taxable income in 2025. I have yet to decide if we will go small in 2025 or do some Roth conversions to eat up our already paid in FWT or just get a larger refund than I had originally planned for.

Our current year taxable income is in the “tax torpedo” range so every dollar change of taxable income causes a $0.85 change in taxable our social security income.

My typical goal is to be dead even on taxes each year but I may break with my tradition in 2025.

David Lancaster
20 days ago
Reply to  DAN SMITH

Dan you have exactly described one of the reasons I’m focusing on trying to convert all of my wife’s traditional IRA to a Roth (while staying in the 12% tax bracket) before we collect our maximum Social Security benefits.

I’m finding that I’m having trouble emptying her account by Roth conversions due to the surge in the markets. I have read many financial articles that other seniors are having.

Truly a first world problem that we are blessed having.

Last edited 20 days ago by David Lancaster
R Quinn
25 days ago

Good stuff Dan. Informative and entertaining.

I bet you hear “why should I pay taxes, I paid my dues” or taxes are a scam, “they” are ripping me off. “They” never defined.

I don’t think most Americans make the connection between paying taxes and what they receive in return. And they sure don’t understand Americans are not highly taxed when compared with many other countries.

The reality is we need higher taxes and less new spending unfunded. The lack of a basic understanding of taxes and governments is sad in my opinion.

Jeff Bond
26 days ago

I don’t do taxes for others, but these are the kinds of topics I’ve read about through the years:

I shouldn’t owe money this year because I don’t have any leftover

Why can’t I claim my veterinary bills as a medical deduction?

I want to itemize AND take the standard deduction

Why do I need to supply proof for that deduction?

How do you know the IRS won’t accept that as a deduction (or credit)? Shouldn’t we just submit it and see if it works?

>>> and finally, a quote from my ex-wife, after seeing our tax return and seeing (separately) the balances on my 401(k) and her IRA: “Can we spend that?”

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