The Best Tax Advice I Never Took
Logo of the Internal Revenue Service (Photo credit: Wikipedia)
The count-down to Tax Day is on and that can make people shake just looking at their calendars. I went around the country to talk to people about taxes and found that a lot of people have made some serious blunders in the past. Here’s a list of some of the best tax advice people from around the country never took and why they should have.
1. Hire a professional
“I took accounting in business school and felt that I could handle doing my own taxes. Who wants to pay $200 for someone else to do what I could, right? What I forgot about was the grade I got in that class. I ended up filing for exemptions incorrectly and also missing a few big ones. It was a debacle. Never making that mistake again.” – Brian, Minnesota
2. Keep a record of your company’s reimbursement policy
“I kept all of my receipts and thought that was really all I needed. In past years I had no problems. That was until I was audited and because I hadn’t read my company’s policy in years it turned out that the IRS didn’t recognize a large number of my expenses. It was a big blow.” – Nick, Missouri
3. File as a couple
“My husband and I thought that we could get more deductions if we filed separately. We were very, very wrong. In our instance we ended up not qualifying for the deductions we had expected and ended up owing the IRS more money. We’ll never make that mistake again.” – Jessica, New York
4. Amend your past returns
“My wife and I have a lot of stress during tax season so our motto was “what in the past is in the past.” We just didn’t want to bring more stress on ourselves. That was just stupid. We were looking at our IRA and realized that for a few years we hadn’t been contributing the full amounts to our IRA. Had we seen that within the three year window we had to amend it we’d be in a much better place now and our taxes would have been lower in the years after.” – Curt, Arizona
5. Understand real estate tax before you file
“I recently got married and instead of selling my condo [that was currently underwater] I kept it and going to attempt to rent it out after we settled into our new home together. What I didn’t know was that I we made too much money to deduct losses on my condo. I also found out that I don’t get any money back until I sell the place. I was expecting a refund – not at $15,000 bill. I would have gone about a lot of things differently – not just how I filed.” – Vince, California
You don’t have to be a rocket scientist to see what went wrong for a lot of these people. Bottom line: Take, and use, the tax advice you get from a reputable source, such as someone who has a degree in accounting. We don’t want to highlight your mistakes in next year’s edition
Category: Taxes
