TAX PRO TRICKS
The deadline looms. Men's Health magazine found a source who spoke to them on deep background about trade secrets:
A chain might not be all that helpful
Yes, the storefront tax-prep franchises do employ some certified public accountants, but those CPA's are typically reserved for their well-off clients (as in, probably not you). That means you could be stuck with a tax-season temp who's been trained but doesn't have an accounting degree and might miss valuable deductions you're entitled to.
You're probably fine with TurboTax
If you're a regular guy with a regular job and straight forward finances, TurboTax is a useful tool. Some CPAs have clients who use the program and then bring in their 1040 for a glance-over. You might not know that the IRS now provides tax-prep service for free. Go to irs.gov/freefile.
You don't need every little receipt
Well, up to $75 a day. Most people don't report an expense if they have no receipt for it. But good records can mean less tax owed, and that's free money. So just keep a journal: Write the date, the amount, the purchase, and the reason for the purchase. If the IRS comes calling, trot out your notes to prove that everything matches.
If you don't donate, you're a dummy
Many people think charity dollars aren't worth reporting. False: They can bring down your taxable income enough to net you a nice break. Donate cash, old clothes, a car, whatever. Did you do charity work that involved travel? Your mileage is deductible. But make sure it's an IRS-approved charity. Find out at apps.irs.gov/app/eos.
Forgetfulness is excusable
If you overlooked a freelance gig or forgot to report your blackjack winning from that weekend in Vegas, you'll need to come clean the onus is on your to provide accurate data. That said, the IRS will probably cut you a break. But there will be extra red tape, and that's where the expertise of a CPA will prove invaluable. He or she can take it from there and send you another bill afterward.
The IRS isn't so tough -- usually
Messed up the math? The Feds aren't going to lock you up. They might charge you the tax owed plus interest. If it's your first transgression, they're likely to waive the penalty if you ask nicely. Now, if you've committed fraud, all bets are off: Time to lawyer up.
The preparer is your fall guy
A tax professional's job is to determine which expenses can legitimately be claimed to give you a lower taxable income. But nobody's perfect all CPAs make mistakes. If it's an error on the part of the preparer, then he or she is responsible and will clean up the mess with the IRS for you.
Facing the IRS alone is a bad idea
Say you're called in for an inquiry or audit. The worst thing you can do is go in without good representation. A professional can help you recognize where the problem lies and come up losing more money than you have to. You need someone who has experience dealing with the IRS or your state revenue department.
A chain might not be all that helpful
Yes, the storefront tax-prep franchises do employ some certified public accountants, but those CPA's are typically reserved for their well-off clients (as in, probably not you). That means you could be stuck with a tax-season temp who's been trained but doesn't have an accounting degree and might miss valuable deductions you're entitled to.
You're probably fine with TurboTax
If you're a regular guy with a regular job and straight forward finances, TurboTax is a useful tool. Some CPAs have clients who use the program and then bring in their 1040 for a glance-over. You might not know that the IRS now provides tax-prep service for free. Go to irs.gov/freefile.
You don't need every little receipt
Well, up to $75 a day. Most people don't report an expense if they have no receipt for it. But good records can mean less tax owed, and that's free money. So just keep a journal: Write the date, the amount, the purchase, and the reason for the purchase. If the IRS comes calling, trot out your notes to prove that everything matches.
If you don't donate, you're a dummy
Many people think charity dollars aren't worth reporting. False: They can bring down your taxable income enough to net you a nice break. Donate cash, old clothes, a car, whatever. Did you do charity work that involved travel? Your mileage is deductible. But make sure it's an IRS-approved charity. Find out at apps.irs.gov/app/eos.
Forgetfulness is excusable
If you overlooked a freelance gig or forgot to report your blackjack winning from that weekend in Vegas, you'll need to come clean the onus is on your to provide accurate data. That said, the IRS will probably cut you a break. But there will be extra red tape, and that's where the expertise of a CPA will prove invaluable. He or she can take it from there and send you another bill afterward.
The IRS isn't so tough -- usually
Messed up the math? The Feds aren't going to lock you up. They might charge you the tax owed plus interest. If it's your first transgression, they're likely to waive the penalty if you ask nicely. Now, if you've committed fraud, all bets are off: Time to lawyer up.
The preparer is your fall guy
A tax professional's job is to determine which expenses can legitimately be claimed to give you a lower taxable income. But nobody's perfect all CPAs make mistakes. If it's an error on the part of the preparer, then he or she is responsible and will clean up the mess with the IRS for you.
Facing the IRS alone is a bad idea
Say you're called in for an inquiry or audit. The worst thing you can do is go in without good representation. A professional can help you recognize where the problem lies and come up losing more money than you have to. You need someone who has experience dealing with the IRS or your state revenue department.
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