Valdosta Daily Times

Business

January 22, 2012

Don’t let your taxes outsmart you this year!

VALDOSTA — With tax season rearing its ugly head out of your already busy life, there’s no need for you to feel like you’re alone. Taxes could be as simple as . . . well, hiring someone. No, a tax professional is not some extravagant expense that only the bourgeoisie can afford and yes, it will cost you some money but it may be worth it.

“Most people are far better with professional help because of the complexity of the Tax Code,” said Terry Conley, owner and operator of TC Tax Service. “Each and every year, there are many, many changes made to the Tax Code that affect the majority of taxpayers and their return.”

According to Mark Rogers, Certified Public Accountant with Henderson and Godbee, LLP., based on the National Taxpayer Advocate’s annual report recently released to Congress, there were approximately 4,430 changes to the Internal Revenue Code from 2001 through 2010, an average of more than one per day, including an estimated 579 changes in 2010 alone.

“Tax professionals are constantly reading, researching and attending continuing education classes to stay on top of the tax laws,” said Rogers. “Having your taxes prepared by a seasoned professional will ensure your return is prepared accurately and that you are able to take full advantage of the tax laws available to you.”

Though there are computer programs such as Turbo Tax that aid people with filing taxes, those programs aren’t always completely efficient. While a tax preparation program may be useful to a taxpayer who has a relatively simple return with standard deductions, it is not an ideal program for all situations.

“If the taxpayer’s situation is more complex —owns a business, has rental property, has a farm, has investments (such as stocks or real estate), itemizes deductions, is able to take advantage of the many credits offered — it would probably be very beneficial to have a professional prepare your return,” explained Rogers.

Conley recalls clients who initially used a tax preparation program that did not work in their favor.

“We consistently see many clients who did their returns using one of the programs and we have to help them amend the return they filed to correct mistakes and usually get them additional money back,” said Conley.

According to Rogers, some of the more common mistakes that people make when preparing their own returns is failure to properly report income on their returns, not taking  full advantage of tax credits available and not taking full advantage of deductions available.

“Many taxpayers, unfortunately, base their tax research on something a friend has told them, instead of the actual tax law,” said Rogers.

Conley shared a newsletter from Dave Ramsey, the best selling author of “The Total Money Makeover Plan” who also hosts a national radio show on how to handle your finances. In an informal survey of “Dave fans” on Facebook, tax filers using a tax professional receive, on average, receive significantly higher refund amounts than people who prepare and file taxes themselves.

“Based on a survey he did, preparers who do their own return in the early part of the year get an average return of $1,492 and preparers who use a professional get an average of $1,789,” said Conley. “Later in the season, during the month of April, self preparers average $1,824 and professional returns average $2,615.”

However, a refund of large amounts of money should never be promised. If a taxpayer does promise you an outcome of a return, that should be a red flag.

“We never promise a refund of a certain outcome on a return,” said Rogers. “Be very wary of anyone that promises you big refunds or gets you “special” deductions.”

Ultimately, it is the responsibility of the taxpayer to ensure the correctness of the information on their return. However, a tax professional such as Conley or Rogers will be sure to take full advantage of the tax laws and their interpretations to ensure that you get the lowest tax bill available.

Though you cannot be guaranteed a large return or any return for that matter, it is a safe bet that your chances of getting one are significantly better if you utilize the services of a professional. While a tax professional costs money, you may be costing yourself money by depriving yourself of an accurately prepared tax return. In today’s economy, every little bit counts, so let a professional count each and every one of those bits in your favor.



The following are some tax deductions you may not be aware of:

• If you lost your job and you are relocating to start a new job, you might know that these expenses are generally tax deductible (you must meet a few requirements). You might not know that the expense of moving your cat, dog, bird, python, or whatever pet you might have from your current or old home to your new home is treated the same as moving your other personal properties.

• If you have a medical condition that would improve with a swimming pool exercise regimen, your swimming pool expenses might qualify as a deductible medical expense.

• Any business trip viewed as “ordinary and necessary” to the course of doing business by the IRS is eligible for a deduction.

• If your job requires you to wear a uniform (police officer, fast-food chain worker, etc.) the cost an up-keep (drycleaning cost) of your uniforms is tax deductible.

• Charitable contributions your have made are tax deductible.

• If you must travel for your job you may claim your mileage on your tax return if your job has not already fully reimbursed you for it.

• If your place of employment requires you to take furlough days and you do not claim unemployment for those days, you may claim them on your taxes.

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