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4 Bulletproof Strategies that Let Real Estate Professionals Cut Their Federal Taxes
Never Invest a Cent Without Considering the Likely Tax Impact on Yourself
Realtors® and others in the real estate field see first-hand the steady increase in property values. Everyday, you assist both buyers and sellers to profit from it. You...
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Wouldn't you rather go to Tahiti?
Are you a landlord with rental property whose value has
significantly appreciated?
Are you ready to cash in those profits and take that trip...
Debunking the FAFSA Myth
With the plethora of big-business entities jockeying for the money of students on the path to becoming well-to-do responsible consumers with a house, car, and 1.5 children, it's often missed that the US Government is the first place to start...
Love The Thrill of Risk? Invest in an Annuity!
With the stock market in steep decline, people are looking for safe places to invest their savings. Many banks and investment companies are pushing annuities. Annuities offer a higher interest rate than CD's, but are they safe? You could view an...
The 8 Biggest Mistakes When Designing Portfolios - and How To Avoid Them
Are you as good an investor as you think? Do you consider yourself a well-informed investor able to anticipate and avoid nearly all pitfalls associated with investing? Chances are, you are making one of the common errors that could cost you...
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Do your own Taxes!
So, it’s the second week in February - have you done your taxes yet? What, you don’t do your own taxes? You pay someone else to do it for you? Well, I’m one of those people who can’t stand paying anyone for something I can do myself. Am I a glutton for punishment? Maybe. Cheap? Definitely. And I’m a Jack of all trades and master of none. I’ve dabbled in auto mechanics, small electronics repair, ceramic floor/wall tile, drywall, carpentry, and the list goes on. I’ve even been going by Webmaster as of late. But, getting back to the subject at hand, I’ll put on my Tax Accountant hat for a moment.
I’m writing this to encourage everyone to do your own personal income tax return. Aside from the fact that misery loves company, there are several legitimate reasons I feel you should join me in performing this annual ritual:
1. It’s fun! (okay, I didn’t think you’d buy that…)
2. It’s easy! (no?)
3. It’ll change your life! (?)
Alright, so the above statements are a little exaggerated - there are elements of truth in each statement. First, while not necessarily fun, doing your own taxes will definitely provide a feeling of accomplishment and perhaps even a boost of confidence. Having tackled this task that is perceived by most to be difficult and daunting at best, you may raise your fist victoriously and cry “Ha!” in the face of the bureaucrats responsible for the current tax code. After trudging through the overly complex and horrendously long and confusing forms, instructions and IRS supplementary documentation, you will emerge brimming with the confidence that having successfully completed your own return, there is not anything you can’t conquer – well, at least anything that comes on 8-1/2 x 11 forms. And hey, what’s more “fun” than staying up until all hours of the morning, fueled by chasing caffeine pills with coffee, with Jay Leno pontificating in the background while you stare at the computer screen and fine print until your eyes throb from the strain?
Now – about it being easy. Maybe that is oversimplifying the process a bit. Still, with the tax return software available, it’s certainly much easier than paper and pen. This is a must – go get a copy of Taxcut or TurboTax, it doesn’t matter which. But, since it doesn’t matter, I’ll tell you that I prefer Taxcut. Not because it’s superior or cheaper than TurboTax (it’s the same price and as for it’s superiority, I’m making an educated guess as I’ve never used Turbotax), it just happens to be the one I’ve always used. I’ve done my returns with Taxcut since 1996. It hasn’t let me down and I’m familiar with their processes, so I’ve stuck with them. Another reason might be that they are typically offered each year with Microsoft Money’s latest version free after rebate. As I have always used MS Money, this allows me to stay current by upgrading to the latest version for free after the rebate included with my Taxcut purchase. Similarly, Turbotax is paired with Quicken, so if you prefer Quicken to Money, go with Turbotax.
Both titles use a process of questions and answers to guide you through filling out your return. Depending on the answers you give, you be taken to different sections as required and you’ll skip over the irrelevant stuff. There’s plenty of help along the way. If your unsure of whether a deduction applies to you or if you should include a certain form in your return, the help files offer great direction and provide several examples where you will find your situation described. If all else fails, there are links to the IRS website where you can access the bulletins that they provide for additional directions to each form in the return.
Taxcut will check your return for all types of errors, both typographical and comprehensive. For instance, if you mis-enter your SSN or forget to enter a value, it will prompt you to go back and correct this. It will also show you any items that are typical “flags” to the IRS. For example, Taxcut might say something like “Your total for charitable deductions is $5,000 – the average donations reported by people in your income range in 2003 was $3,000.” Not necessarily an error, but good to know so that you can make sure you have all the proper documentation to back up something that might raise an eyebrow at the IRS.
While you could probably still not refer to doing your returns as “easy”, these software packages have certainly streamlined the process.
Finally, will doing your own taxes really change your life? Honestly, I think in some small but positive ways, yes. The satisfaction of having completed this project on your own is somewhat uplifting and should give you a slight boost in self esteem. Add “I do my own taxes!” to enhance your resume. This certainly displays your ability to solve complex problems and shows your go-getter attitude. But seriously, preparing your return will definitely force you to pay attention to certain critical aspects of your own personal finance. It’s wise to be familiar with the tax code or at least the portions that pertain to you and effect your return. Arming yourself with this knowledge will allow you to plan and make future decisions with some idea of how your strategy will impact your tax standing. Knowledge is power and all that…
One parting thought – I cannot imagine going through this task, through all of the pain and suffering, questions and answers, receipt hunting, number crunching, gut wrenching process only to find that your refund calculates in the negative. So, if you are one of those unfortunate, under-withheld individuals who ends up owing Uncle Sam every year, then by all means, hire an accountant!
Brian Neuman
Webmaster
http://www.honeybeadjewelry.com
About the Author
Brian Neuman is a Project Manager for a major construction company in the midwest. His second shift job is being the Webmaster of Honeybeads, Jewelry by Melissa a web site dedicated to promoting his wife's small business selling custom, handmade beaded jewelry.
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| Internal Revenue Service |
| The US government agency responsible for tax collection and tax law enforcement. Includes income tax forms, instructions, and agency publications. |
| www.irs.gov |
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| Tax Information for Individuals |
| Access to useful information, booklets and other tools from the Internal Revenue Service. |
| www.irs.gov |
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| Tax Center - Yahoo! Finance - Tax forms, tips and calculators. |
| Yahoo! Finance: Tax - Find all the resources you need for tax season. Review recent tax law changes, estimate your taxes, find tax tips and expert answers ... |
| tax.yahoo.com |
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| Taxes: Tax Planning, Tools and Advice - MSN Money |
| Microsoft's Tax Preparation site, in association with Tax Server. |
| moneycentral.msn.com |
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| Tax - Wikipedia, the free encyclopedia |
| Governments use different kinds of taxes and vary the tax rates: ... Taxes are most often levied as a percentage, called the tax rate, of a certain value, ... |
| en.wikipedia.org |
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| H&R Block | Taxes, Online Tax Preparation, Tax Software, Filing ... |
| Offers online and in-person tax preparation and tax software, mortgages, brokerage and financial services, consumer tips and tax planning information. |
| www.hrblock.com |
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| TaxCut Online | H&R Block | Online Taxes, File Taxes Online ... |
| File your Taxes online with TaxCut Online. Learn how to file taxes online here. |
| www.hrblock.com |
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| Income Taxes, Tax Returns, Refunds, Deductions and E-File Software ... |
| Popular tax preparation software by Intuit. Integrates with Quicken, spreadsheets and offers state by state electronic filing. |
| turbotax.intuit.com |
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| Taxes & Estates, Tax and Estate Planning Advice - Forbes.com |
| Personal Finance - Get tax and estate planning advice and information from Forbes.com. |
| www.forbes.com |
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| Essential Links to Taxes |
| TurboTax Premier For Federal Returns 2005 Win/Mac, TurboTax Total Tax Solution Deluxe 2005 with State Win/Mac, TurboTax Basic 2005 Win/Mac... ... |
| www.el.com |
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| Government > Taxes in the Yahoo! Directory |
| Yahoo! reviewed these sites and found them related to Government > Taxes. |
| dir.yahoo.com |
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| Taxes - Tax News for Home and Business from CNNMoney |
| The latest in tax law updates, news, forms & advice from CNNMoney.com. Includes a refund savings calculator, and interactive tax lessons. |
| money.cnn.com |
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| The Tax Foundation - Educating Taxpayers Since 1937 |
| Devoted to educating taxpayers about tax policy and the total tax burden borne by Americans at all levels of government. |
| www.taxfoundation.org |
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| Welcome to the Vermont Department of Taxes |
| Welcome to the Vermont Department of Taxes... ... Changes to Property Tax Adjustments in 2007 - updated 10/18. - Tax Expenditures Transition Report on ... |
| www.state.vt.us |
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| Franchise Tax Board Homepage |
| The department that collects state personal income taxes and bank and corporation taxes for the State of California. Access to forms and tax information. |
| www.ftb.ca.gov |
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| HM Revenue & Customs: Home Page |
| News and information on tax and national insurance, including downloadable leaflets and forms and the latest news on filing tax returns on-line. |
| www.hmrc.gov.uk |
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| State and Local Tax |
| Piper Resources; State Tax Rates and Structure ...Federation of Tax Administrators; State Payroll Taxes Information ...Symmetry Software ... |
| www.taxsites.com |
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| Quicken.com |
| www.quicken.com/taxes/ - 3k - Cached - Similar pages |
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| Tax news and advice from Bankrate.com |
| Information on all phases of tax planning and preparation. |
| www.bankrate.com |
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| Online Tax Advice - Tax Preparation Help - Income Tax Tips |
| Income Tax Tips - MarketWatch offers online tax advice and tips. ... IRS inflation adjustments mean tax break on next year's taxes. ... |
| www.marketwatch.com |
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