Hey guys, I’ve got a situation that’s making me a bit nervous. I work a regular job (W-2) and I’m a college student too, so I get the 1098-T form. I’m getting some tax credits because it’s my first few years of school.
So, I made a dumb move and went tax exempt for 12 weeks (I calculated this myself).
Now I’m seeing a $1000ish tax return estimate on TurboTax.
The past 2 years, I got about $3800 each year, so it makes sense since I was exempt for a while. (Not a great idea, but I was working a lot of overtime and paying off credit cards I foolishly got into).
A friend told me about this guy who’s done taxes for her stepdad for years. He doesn’t have a business name though, just works by himself. He said he could get me $6000-$7000 back. Am I crazy, or is this guy trying to scam me?
He says he’s licensed and legal, and my friend’s stepdad trusts him. I really don’t know what to think. Can anyone help me out? Any advice or thoughts would be great.
If he’s promising you that kind of refund, it probably involves scamming the government. This guy is probably a ghost preparer, which means he won’t put his name on the return, so you’ll be fully responsible if anything goes wrong. Try using FreeTaxUSA, it’s a good tool and mostly free. I think it was only $17 for federal and state.
You can’t get that much back unless you have kids or a ton of deductions. The education credit maxes out at $2500, and only part of that is refundable. I think this guy is just trying to take advantage of you, stay away from him.
You said you’re looking at a $1000 return on TurboTax. If your only forms are the W-2 and 1098-T, then you already have your answer. TurboTax should’ve asked you school-related questions during the process. If you went exempt, that’s why your refund is lower. Just file it yourself and avoid these shady preparers.
If something feels off, it probably is. You could try going to HR Block to get a second opinion, even though it’ll cost you some money. That way you’ll know for sure if you’re on the right track.
Any tax preparer who tells you they can get you a specific refund amount without even seeing your documents is a scammer. No legit preparer would say that without reviewing your full tax situation first.
This sounds pretty illegal. Did he even ask for any of your tax documents or tell you what you were doing wrong? If not, he has no idea what kind of refund you’d get unless he plans on making stuff up on your return to get you that $6k. You can check if he has a CPA license or PTIN, but even if he’s licensed, it doesn’t mean he’s not doing something shady.
Yes, he’s likely committing fraud to get you a bigger refund. And since you sign the return saying everything is correct, you could be in legal trouble with him.
One red flag is when preparers say they can get you a big refund and then charge a high fee based on that refund. If the IRS catches up with you later, you’ll have to pay it all back, plus the preparer’s fee, and a penalty. It looks like you might be eligible for the American Opportunity Credit, which gives you up to $2500 (with $1000 of that being refundable). Just be careful not to go exempt again, because you can only claim the education credits for four years. But you can also adjust your W-4 to avoid withholding too much from your paycheck.