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Tax service gets personal
With about a month before deadline, taxpayers have a variety of filing options. These include hiring outside help from an accountant or a retail tax service or doing it on their own with software or the “old-fashioned way” — with a pencil, paper and a calculator.
A local entrepreneur is offering a hybrid alternative. After purchasing the local franchise for Liberty Tax Services, which has seven Kitsap County locations, Chris Gintz is hoping people will choose the combination of tax skill, guarantees and personal service.
“With a lot of the larger tax companies you get the feeling they’re trying to push you out the door and get to the next client,” Gintz said. “We’ll spend as much time as we need to do it correctly and give everyone what they need in order to file a correct return and get the largest refund.”
The guarantee is pretty standard, and is consistent with all the other options that don’t include doing it yourself.
If the IRS contacts the taxpayer with additional tax charges, Liberty will pay the penalties but not the tax amount.
“We will do whatever is necessary to make it right with the IRS,” he said. “But we will not pay the extra tax.”
Liberty employs about 60 people countywide (12 in Port Orchard), along with a fluctuating army of “wavers” who stand near a franchise location in a costume in order to drive customers into the storefront.
Gintz said that a large percentage of his walk-in traffic are driven by the wavers, whom he himself joins on occasion.
While the wavers are seasonal, the regular staff is employed year-round.
Outside of tax season, Liberty does a good business with extensions and customer questions. There is also training involved, with the work force on both ends of the teaching/learning axis.
Gintz said the economic conditions have caused some changes in the tax process, specifically the tendency to cash in retirement funds.
Taxpayers can treat this as a short-term loan to themselves, since any money returned to an IRA before the year’s end carries no penalty.
However, if the money is not returned it is subject to a 10 percent penalty, plus taxes owed.
For instance, if a taxpayer cashed in a $100,000 retirement account they would immediately lose $10,000, with the remaining deduction determined by their tax bracket.
So if they were in the 15 percent bracket, they would lose one-quarter of their savings.
“A lot of people are being forced to cash in their retirement to pay their bills,” Gintz said. “This not a good thing.”
While Liberty takes the customer’s word about expenses and deductions, it will not submit a return that it knows to be false. For example, if a customer wanted to deduct the entire cost of an item when it was only used for business a portion of the time, Liberty would inform the customer they need to submit their return through another channel.
Liberty customers need to supply employment forms, (W-2; 1099, etc.), additional income statements, banking records and property tax statements to start. Some may need to provide deduction documentation, receipts and mileage data.
The cost ranges from $99 for the simplest 1040, with additional fees for each added form.
Gintz said the average is about $225 per customer.
Liberty can cost less than a CFA or national franchise, and there are some taxpayers that qualify for an even greater discount. This month, the company is offering free return preparation for law enforcement personnel, firefighters (both March 11-17), teachers and other educators (March 18-24) and people who have lost their jobs in the past six months (March 25-31).
There is no such consideration for other occupations such as grocery clerks, bank tellers or newspaper reporters, who are all weathering tough economic times.
“Of course, we can’t get to everybody,” Gintz said. “We’ve picked a couple of special groups that contribute in a special way. It affects our bottom line, but this is a contribution we can make to the community.”