This was quite a different tax season for my office which I expected due to the economy.  However, I was wrong about anticipating everything from massive depression to panic with some clients.  That did not happen.  Here is a general summary of what we saw in my office:

1. Clients were deeply concerned and aware that their life "plan" was going to have major changes.  The financial downturn affected everyone, but those with more to lose - lost more.  Virtually everyone seemed ready to take more control over their finances.  Most  really want to understand their options and try to make good decisions.  It was interesting that retirement plans and stock portfolios lost anywhere from 10% to 70% - depending upon who was managing the funds.  Those who managed their own funds or really worked closely with their fund managers did much better.

2. I do believe the ecomony is leveling out.  However, there are still a huge number of people who will need to let their homes go back to the bank and will be downsizing or shutting down their businesses.  Many have hung on too long.  They have been using HELOC's (Lines of Credit) to fund their mortgages and live on and now they owe more than their homes are worth.  They hung on to businesses through the winter in hopes that 2009 would be better than 2008.  I don't think that is going to happen.  We will be lucky to match 2008.  Businesses need to budget based on the current circumstances.  We will be lucky if it levels out for the next few years.  We have to survive "as is".   They all want to refinance at today's great rates, but most of them do not qualify for a mortgage that combines both their 1st Mortgage and their HELOC.

3. I have not seen the Mortgage Companies making it easy for anyone to renegotiate their mortgatges.  I don't know if that is coming, but most of the home owners I see would not qualify for a refinance even if their mortgage was re-written for today's values.  They do not have adequate "Earned Income" to qualify.  Earned income is income produced by a business or job situation.  A lot of people may still have Equity or Net Worth - but little or no "Earned Income". 

4. Small Businesses are diversifying and getting creative.  A lot of them will survive.  They need to analyze all expenses are really be aware of where what expenses are really helping them to produce Net Income.  Unfortunately for our newspapers, a lot of small businesses are cutting down on all print advertising and focusing on the Internet marketing opportunities. 

5. There were higher refunds and lower taxes paid by the majority of my clients.  I assume that will the situation throughout the Country.  The States with Income Taxes will receive a lot less.  WA, of course, will receive a lot less in Sales Tax, B&O Tax and real estate Excise Tax through the next few years.  I feel all Municpal Budgets will have to adjusted mid-year for this drop in Income.

6. There was an underlying steady stream of thought leaning toward working toward more self-sufficiency. People were talking about leasing out a portion of their home or property, sharing property as Tenants In Common, starting gardens and repairing and maintaining everything rather than buying new. 

7. As a result of Item 6, my businesses that are in the second hand or repair areas are doing fine or are up for the year.   Also in the good news category, it seems that reservations for the summer of 2009 in everything from lodging to whale watching is up for 2009.  Construction seems to still be the hardest it in this downturn.