April 29th, 2021

The Joy of Doing (Other People’s) Taxes: A Conversation with Long Branch’s Carlos Perozo

NEWSLETTER:  How long has ZP Tax been here in Long Branch?   

CARLOS:  I started ZP Tax at my present office here on Flower Avenue in 2007. 

NEWSLETTER:   Why do you enjoy doing taxes, when so many people particularly dislike it? 

CARLOS:  I first started to work in the tax preparation field back in 1995. My first position was as a tax preparation instructor, which is when I discovered that there is a big need in the low-income community for good tax preparation services that can help them improve their tax situation.  This is one the reasons that I enjoy it so much — being able to help those who have been abused in the past by unscrupulous tax preparers. 

NEWSLETTER:  When you started ZP Tax, did it occur to you that you would someday become president of the Long Branch Business League?  

CARLOS:    It never occurred to me that I would become part of a community organization that helps residents and business. After I joined the Business League, I also got the opportunity to help out in Wheaton as part of the civic organization there.  Then MHP asked me if I could be the president of Long Branch Business League for a year — that was 10 years ago! It is something I wouldn’t be able to do without the support from MHP and of course the other members of the Business League. 

NEWSLETTER:  Tell us a bit about your clients.  How many of your usual clients are people who live right in the Long Branch neighborhood?  

CARLOS:  So far this year I have served thirty clients from the 20901 zip code, though there are also other zip codes within Long Branch, so the real number is definitely larger than that.  I serve clients from many different states in the U.S. I even have a client who lives in London, England.

My clients have all sorts of different backgrounds and come from many different countries. Some are from the U.S., others are from El Salvador, Honduras, Nicaragua, Brazil, Venezuela, Argentina, Chile, Peru, Ecuador, South Africa, Spain, Italy, France …

NEWSLETTER:  When people do their own taxes what do they tend to overlook that leads to their getting in trouble with the tax authorities?

CARLOS:    One common mistake is that when they get a debt forgiven, they don’t think it will be considered income. The institution that forgave the debt should issue a 1099-C and that needs to be reported with the tax return. Another common mistake has to do with correctly handling the situation of a 19 year-old student who had a part time job and who wants to file his/her own tax return, and does so without thinking about the tax consequences for his/her parents’ tax return.

NEWSLETTER:   Can you give an example of a mistake that you catch that ends up saving people money on their taxes?

CARLOS:  There are many things that can go wrong in a tax return.  Some people don’t select the correct educational credit, or correctly report their state taxes, or provide the correct information on their deductible expenses.  All such information could end up giving the client either a lower tax liability or a bigger refund.  

NEWSLETTER:  What should people do differently to make it easier to file their taxes? 

CARLOS:  Almost every decision in life has tax consequences. For example, if your son breaks his leg, that may result in deductible medical expenses.  If your daughter goes away to college, guess what? That has tax consequences! Same with a decision to buy Bitcoin.

When my clients tell me right from the start everything they did during the year, that helps me prepare for them the most accurate possible tax return. I ask my clients many questions and sometimes they will say, ‘why are you asking?’  Believe me, it is only because it may have tax consequences.
Let’s say someone is planning to buy a house. If they want to be certain that they can take all the tax advantages, I would suggest that they purchase the house between January and March. Incidentally, that is also the best time to buy for other reasons.  Keeping records is also important.  Let’s say you bought a car and you are able to itemize it.  I need a copy of the invoice from the dealer!   

NEWSLETTER:  I understand that you are helping the non-profit MHP support its residents with tax preparations.  Apparently a number of them have not filed to receive Earned Income Tax Credits that they are eligible for.    

CARLOS:  MHP has decided to help some of their residents get up to date with their tax situation.  Some of these residents had been filing their taxes without taking advantage of the Earned Income Tax Credit (EITC).  That is something I am definitely able to help them with, and I am glad that MHP reached out to me to help their residents in this way.  A number of MHP residents have already filed their taxes with me under this program.   They seem very satisfied with the results, and I have been very happy to be part of it.