Preparing more than a thousand tax returns, Shirley Swoffer and Denise McGorisk of H&R Block know how people are doing this year ? not so good.
‘It’s been a hard time for people ? many are losing their jobs and their homes,? said Swoffer, senior tax advisor at H&R Block, 7103 Dixie Highway in Independence Township. ‘That’s Michigan. Clarkston is doing a little better than a lot of areas, but people are still hurting.?
Many clients have been downsized over the past year, facing unemployment or a lesser-paying job, said Denise McGorisk, tax preparer.
‘Clients who were making decent money in the past are now making about a quarter less,? she said. ‘Lots of people are working part time.?
‘Many are opening their own businesses,? Swoffer said. ‘Others work out of state.?
IRS changed tax-withholding tables last year with the Making Work Pay credit, resulting in higher take-home pay, but sometimes also more to pay at tax time.
‘A lot of people owe this year,? Swoffer said. ‘People aren’t withholding enough, then they owe at the end of the year.?
‘If you owe this year, be sure to adjust your withholding,? McGorisk said.
Many clients took advantage of expanded American Opportunity Credit for college education, Earned Income Credit for children, tax deductions for new car purchases, and credits for energy-efficient home improvements.
‘Energy credits are expanded, although many can afford only one window instead of the whole house,? Swoffer said. ‘It applies to dish washers, washing machines, refrigerators, but not clothes dryers.?
Upper tax brackets are set to change this year, increasing tax rates for earners making more than $200,000, with a top bracket of 39.6 percent.
‘Capital gains credits are set to expire, which will affect investments,? she said. ‘Many people are pulling from retirement funds to make it through ? we’re seeing a lot of that. We’ll see more of that next year if things don’t change.?
People are hopeful things will turn around, though, McGorisk said.
‘People are optimistic about the future,? she said.
H&R Block is doing what it cans to help clients who need it, offering tax-preparation fee freezes and other accommodations.
‘We’ll work with our clients to make sure they file,? Swoffer said.
For more information, call H&R Block, 7103 Dixie Highway, at 248-625-7940.