Don't forget about Required Minimum Distributions! Since you mentioned only withdrawing from Roth accounts now, I'm assuming you might have traditional IRAs or 401ks too? Once you hit 73, you HAVE to start taking RMDs from those accounts, which could push more of your Social Security into taxable territory in future years. Might be worth considering some Roth conversions now if you're in a lower tax bracket.

Just a heads-up on PA taxes - while PA doesn't tax Social Security, they DO tax distributions from IRAs, 401ks and other retirement accounts (except military). Even if you paid PA tax on the money when you contributed, they tax it again when you withdraw. One of the few states that does this. Roth withdrawals are the exception since they're federally tax-free. So your strategy of using Roth money is smart from a PA perspective too!

Look, I'm just gonna say what everyone's thinking - these "miracle" tax preparers are committing fraud and getting their clients bigger refunds by lying on their tax returns. My sister went to one of these "magic" preparers three years ago and just got hit with a $11,000 bill for back taxes, penalties and interest after an audit. The preparer claimed a bunch of business expenses for a "side business" my sister didn't actually have, took deductions she wasn't eligible for, and even claimed her roommate as a dependent. The refund was amazing that year, but now she's on a payment plan with the IRS and it's a nightmare. The preparer? Nowhere to be found, of course.

Has anyone tried just asking this tax lady straight up how she gets such big refunds? I mean, there are legitimate tax strategies that many people miss. Before assuming fraud, maybe find out what she's actually doing?

Speaking as someone with background in corporate finance, there's another issue nobody's mentioned yet. Selling new stock isn't a tax-free event for the company the way you're describing. When a company issues new shares at above par value (which is typically pennies per share), the excess amount received is recorded as "additional paid-in capital," but it's not tax-free income. Companies don't pay income tax on true equity investments because those aren't considered revenue - they're capital contributions. But if the IRS determines you're artificially inflating the stock price to disguise what's basically product revenue, they'll reclassify it. Also, regular buybacks of stock from customers at below the issue price creates a whole host of securities problems around market manipulation. The SEC wouldn't look kindly on a system designed to issue overpriced shares with the expectation customers will take a loss selling them back.

I'm not a tax expert but I think everyone's missing the critical flaw here - who would actually buy stock at $195 that's publicly known to be worth $30? Even with a "free" product, customers would recognize they're effectively paying $165 for the product and taking on the hassle of owning and then selling stock. Most customers would simply prefer to pay directly for the product rather than jumping through these hoops, especially when they realize they're effectively paying the same amount either way. Plus, if you're publicly acknowledging the stock is worth $30 in your marketing materials (which you'd need to do for securities compliance), the whole scheme becomes transparent and pointless.

Tax strategy vs fraud also depends a lot on which software you use to file. Some tax programs actually warn you when something might cross the line or create audit risk. I use TurboTax and it flagged when I was getting too aggressive with home office deductions and explained why it might be considered fraudulent.

The distinction I've always used: Strategy is what you discuss openly with your tax preparer and would be willing to explain to an IRS agent. Fraud is what you hide or would be embarrassed to admit to during an audit. If you're worried about whether something crosses the line, that gut feeling is usually worth listening to. The tax code has plenty of legitimate ways to minimize taxes without venturing into shady territory.

Your roommate should look into the Annual Filing Season Program which is voluntary but gives limited representation rights. Also, tell her to join a professional organization like the National Association of Tax Professionals (NATP) or the National Association of Enrolled Agents (NAEA) - the networking and continuing education is invaluable. I've been in tax prep for 7 years and these organizations have been essential for staying current with tax law changes.

If your roommate is serious, she should also get professional liability insurance before taking on any clients! I know someone who started preparing taxes with minimal qualifications and made a mistake that cost their client thousands. The client sued, and without insurance, it was financially devastating. Even with all the proper certifications, mistakes happen.