Tax Refund. “That’s it?”

Today I prepared the tax return of a guy who was filing for the first time. He had two dependents (his son and girlfriend), had no taxable income (after standard deduction and exemptions) and was eligible for the EIC (Earned Income Credit) and the CTC (Child Tax Credit).

As he observed me inputting his information, he complimented me on my watch and asked what kind it was (an Armitron from Wal-Mart). He then explained that he has a different watch for every day of the week. “It’s kind of a hobby of mine.” I laughed, and he explained further that his most expensive watch was over $200. “How can anyone spend that much on a watch?” he asked.

As I listened, I noticed his refund amount increasing on the computer screen. He’d be able to buy 25 two-hundred dollar watches with his tax refund, which was almost equal to half of his gross income.

But when I told him, “you’ll receive a refund of over $5k,” he just sat there staring at the screen.

“That’s it?”

His response was a bit of a downer for me. I much prefer people to be thrilled about their refunds. That’s why I try to leave no stone unturned in discovering eligibility for deductions and tax credits.

But apparently, this guy’s $5k-plus refund was a disappointment to him. Had someone told him he’d get thousands more than that?

Oh well. At least there was another lady who was absolutely thrilled about her $1500 refund, never having received back more than a couple hundred dollars.

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Explore posts in the same categories: Accounting, Auditing and Taxes

7 Comments on “Tax Refund. “That’s it?””

  1. K-money Says:

    As a CPA I’m sure you’ll see all kinds of crazy things people do with their money. Is seeing people act wacky with money part of what makes accountants so conservative (at least by reputation)? If a guy arranges his finances so that he gets half his gross as a refund, he doesn’t seem sensible to start with.

  2. Revanche Says:

    That much or that little on a watch? (Was he deriding the cost of his, or yours?)

    And holy cats, $5? That’s a breathtaking amount in my book. I realize I don’t make much anyway, and only have one or two dependents depending on the year, but that’s quite a lot.

  3. Revanche Says:

    Hah, I meant $5k. Of course.

  4. frugalCPA Says:

    @K-Money: I’d say you’re correct – most of my accountant compadres are pretty conservative and good with money, and though many of them haven’t had accounting experience yet (still in grad school) and have always been interested in money, I think seeing other people lose or squander money here or there definitely affects risk tolerance and living habits.

    @Revanche: I couldn’t tell from his intonation whether he was deriding himself or not, but I don’t think he was making fun of mine. He seemed to really like it. I wouldn’t be surprised if he hit Wal-Mart on the way home to find it for himself.

    And yeah. Like you, I’d be pretty speechlessly happy about a $5k refund right about now.

  5. accountingelf Says:

    Thats a huge refund. I mean, if you get anything more than that, then there’s gotta be something funky with your withholding. I mean, it’s a nice suprise, but w/ time value of money and all, you’re better off just being able to use that $5k during the year. (TVM is my favorite topic ever.)

    I have done VITA programs in the past, and I’m doing one next weekend, and the worst is when people owe money, or get no refund, and they think it’s your fault for being a bad accountant.

  6. Miss M Says:

    I don’t understand why people want such big refunds, it’s not a positive. I prefer to have my cash upfront, I adjust my withholding almost perfectly. At most I’m off a few hundred and I make way more than that guy.

  7. Shannon Says:

    I worked at Jackson Hewitt for a season and saw this all the time. People who didn’t pay one red dime of tax and complained “I got more then that last year”, or “my friend made the same amount I did and she got way more back then that”. It was an eye opener for me.


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