Four Ways to Trim Your 2007 Tax Bill - WSJ.com

I've done my own income taxes since I was old enough to start working. My father was a corporate accountant, but he also used to help my aunt, a tax preparer, during the busy tax season. I never thought of paying anyone else to do my taxes because I always saw Dad doing his own. I just assumed you fill out the forms, and if you have questions you look in the instructions. I'm sure that many other people who are paying to have their taxes done really could do their own if they just took the time to read the instructions.

Also, today there are many great software programs that make the task even easier. Prices vary, but all are less expensive than paying a professional to do your taxes. And by the way, many "professionals" don't know much more than you do. I had an eye-opening experience working for one of the major tax preparation chains as a part-time job a few years ago. I went to one of their classes, for several weeks, to learn to prepare returns, even though I had been doing my own and those of a few friends for years. What shocked me was that they hired people who had not participated in their weeks long class. When tax season rolled around and they didn't have enough tax preparers, they hired a lot of people who had literally just a couple of days worth of training, and had never prepared taxes before.

Another thing that bothered me about the business was the fees. The preparation fees were high. Most of the people who came into our offices were poor and could not afford to pay these fees in advance. They needed to pay when they got their refunds. In order to accomodate them the firms used "bank products." We had an arrangement with a bank to open an account in the customer's name, and have the IRS deposit the refund in that account. Then we could cut the customer a check for their refund minus our fees, and minus a heavy fee from the bank. If the customer wanted their money sooner, the bank would actually let us cut them a loan check before the deposit was received from the IRS, but the interest rates from this loan were excessive, sometimes resulting in an APR of over 100% after fees were added in.

As the time nears to prepare 2007 returns I've been thinking about some of the ways the tax preparation industry takes advantage of the poor in our community. I am committing myself to prepare some returns for free for low income tax payers. I especially want to help senior citizens who have the least opportunity to increase their earning potential. In the month of February I plan to set aside a few hours each Saturday morning for preparing returns. The preparation will be free to individuals with incomes below $20,000 or families (head of household or married filing jointly) with incomes under $40,000. If you want to efile your return there is a $15 fee, but that just covers my cost. Additionally, I'll take a postdated check for the $15, dated for the expected date of your refund. I hope that members of our church will bring friends and neighbors who need this service. I'll need church members to help with printing, filing paperwork, possibly entertaining children while I interview parents to prepare their returns. It would be nice to have coffee and snacks available to anyone who comes in to have their taxes done.

Although I will still do a few returns as a "paid preparer", these Saturday mornings will be set aside for the free returns only.

Four Ways to Trim Your 2007 Tax Bill - WSJ.com