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Win BIG With TAX-TIP$
This article is about Hints and Tips for Tax Reduction
Because I love a big tax refund, I filed my return long ago, received the money, and used it to pay down debt. But like many people, my cousin Jim hasn’t even started. He doesn’t get a refund, so he waits until April to do his taxes. He’s been skulking around the office for the past week muttering, “I need to start my taxes,” and, “You should write an entry reminding people to start their taxes.”
Many of you are probably last-minute filers, too. If you haven’t submitted your tax return yet, here are some tips to make the process less painful:
• Get help from the source. The IRS
web site is surprisingly useful. There’s a library of forms
and publications, an extensive list of frequently
asked questions, and information on how to file for an extension.
• Claim your telephone excise tax refund. If you’ve had phone
service since 2003, you can claim a standard refund of either $30 or $60
(depending on the exemptions you claim). If you saved your phone records,
you may be able to claim even more! The IRS says that 30%
of those filing returns are forgetting to claim this.
• Take advantage of the Free File program. The IRS reports that
70% of all taxpayers qualify for free electronic tax filing. If your 2006
adjusted gross income was $52,000 or less, check
the IRS web site for more information.
• Use tax preparation software. It’s quicker and less prone
to errors. It can even save you money. One of our members recently told
me about an experiment he conducted: he prepared his own taxes with software,
took them to a small-town CPA, and also had them done by a big-name firm.
Though the big-name firm had the best results, the tax software was a
close second.
• Check your work. The IRS doesn’t like a sloppy return. (Accidental
errors are the top reason for tax audits.) Make sure your numbers are
correct. Include your social security number. Attach all retired paperwork.
Sign your return! Note that this is another reason to file an electronic
return — computers help to catch bonehead errors.
• Beware of audit flags. Take deductions you can substantiate, but
don’t stretch the truth. Don’t be tempted to cut corners.
Your best defense against an audit is to be honest.
• If you can’t pay, don’t panic. The worst thing you
can do is nothing at all. The IRS offers
several payment options. What to do if you can’t pay your taxes
will be in our next issue of TAX-TIP$.
Be sure to store a copy of your return and all supporting documents in
a safe place. After you’ve finished, visit SaveorSpend.com, where
sharing your tax story qualifies you for a chance to win an Amazon gift
certificate.
I hope you found this report helpful. As you know, taxes usually are the
biggest expense that will have to pay each year. It is important to become
knowledgeable so you can take advantage of all the allowable expenses
and loop-holes. Having a good accountant is an asset, but gaining the
knowledge yourself saves you money, keeps your accountant honest and empowers
you.
TAX-TIP$ is a continuing education service designed to share information which will empower small business owners and home business owners with the knowledge to give you a competitive edge and put more money in your pocket. The wealthy have always said the single most important thing a business owner should become knowledgeable on is taxes ... they can make you or break you.
"There are two systems of taxation in our country: one for the informed and one for the uninformed - Honorable Learned Hand, US Appeals Court Justice"