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February a taxing time for preparers

February 05, 2003|by TAMELA BAKER

tammyb@herald-mail.com

The April 15 tax filing deadline may be months away, but several local tax preparers expect February to be their busiest month of the year as more and more people turn to them for help preparing their returns.

"My big rush will be in the next two to three weeks," predicted Paul Cox of Professional Tax Services in Hagerstown. "Last year I had a rush in April, but normally I do not."

"In February you get so many you just wonder how you can do one more return," said Hazel E. Fields of Hazele's Tax Services in Clear Spring.

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The complexities of tax forms drive more and more people to seek help with their returns, they say, and the desire for quick refunds brings a lot of people in early.

"A lot of our work is done between Feb. 1 and Feb. 25," said Robert Martz of Accutax in Hagerstown.

Martz said he's getting more clients than in the past, partly because the tax laws keep changing.

And then there are those confounding tax forms.

"In my own experience, it would appear that most of the complexities are found on pages 1 and 2 on form 1040," Martz said. "It all comes down to having to understand people's needs."

"I see a few more people every year," Cox said. "Some want rapid refunds."

Cox said that while the Internal Revenue Service is trying to simplify filing tax returns, the process remains complicated in some cases.

If the IRS is trying to simplify its forms, some say it's failing.

"They're not easier - no way," said Nancy Saunders, one of three partners at Saunders Tax Services. "It's very complicated."

Schedule D, which deals with capital gains, is particularly challenging, she said.

"I just thank God for my computer," she said.

"When the IRS simplifies something in their eyes, it's not really simplified for other people," Fields said.

"Every year I try to sit down and do one by hand," she said. "I don't know where I'd be without my computer."

But IRS spokesman Jim Dupree said electronic filing should make the process a little easier. This year, up to 60 percent of taxpayers should qualify for the new Free File program, which walks taxpayers through the electronic filing process.

Dupree said Free File should allow returns to be processed in half the time while cutting down on errors.

"The system is a lot more accurate" than filing by paper, he said.

Last year, taxpayers who filed electronically had an error rate of less than 1 percent, he said.

Nevertheless, he conceded that some taxpayers would continue to file paper returns - and that "they certainly can miss things," even filing electronically.

Help is available, he said, through the IRS Web site, by telephone or at IRS Taxpayer Assistance Centers.

While there is tax work to do throughout the year - especially for corporations - most tax preparers say they do 75 percent to 90 percent of their business from January through April.

"I would say we get 75 percent of our business from January to March 15," Saunders said. "Corporate returns have to be in by March 15 and farmers have to have theirs in by March 1."

Saunders said her clients don't seem to procrastinate, even if they owe the government money. In fact, she said her company wishes clients who owe money would wait a little longer to file.

Fields said some of her clients are waiting a little longer to file.

"In the last two years I have been busier in April than I have in any of the years before," she said.

She some of her clients are waiting even if they are due refunds. She believes they want to save the refunds until later, when they use the money to pay for property taxes or vacations.

"If they get the money early, they're afraid they'll spend it," she said.

Most tax preparers say they increase staff for tax season.

"We hire three or four more" tax preparers, Saunders said, plus additional staff to handle the added clerical work. She usually has three full-time employees, but at tax time, the staff increases to 10 or 11.

Martz said he brings in three more people; Cox brings in one.

And although Fields said her business has increased 10 percent to 15 percent over the past three years, she doesn't usually hire extra people.

But she does get some filing help from her husband.

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