The important work of moving the world forward does not wait to be done by perfect men.
– George Eliot
This week after the Super Bowl is leaving football fans at a bit of a loss. But an interesting fact about our winning Green Bay Packers: They’re the only professional sports team operating as a non-profit organization. There are exactly 112,015 owners of the club. That’s why it was the team “President” receiving the trophy the other night, rather than the usual team owner.
Now for the awkward segue into what I want to tell you about — and warn you about: The Green Bay Packers ownership isn’t a “lonely” enterprise, but you know what is? Trying to prepare your taxes correctly on your own.
[Sorry for that. Sometimes I have to stretch events to fit the narrative:). But stay with me, as this is important — especially for your friends & family who may choose to go this route.]
You see, I don’t like to crow about other people’s mistakes.
In fact, in our line of work, much of what we get to do is to *fix* or alleviate those mistakes, at least when it comes to their tax implications.
And many of the mistakes we see, every year, are when taxpayers decide to tame the tax code on their own, or with the “help” of off-the-shelf software. Do you remember last year when even the Treasury Secretary, Tim Geithner, testified about tax irregularities in his personal returns? Do you remember where he placed the blame?
And he’s not alone. But there’s a good way to fix that problem…
“Real World” Personal Strategy
Don’t File Your Taxes By Yourself
The “Free” Online Options
Did you know that we accountants like to joke to one another about how good these online software programs (TaxCut, TurboTax, etc.) are for our business? Firstly, they are not as “easy to use” as claimed, and secondly…they cost you an arm and a leg.
You might think they’re cheap. And on the surface, you might be right (though, last year, a $1 Billion class action lawsuit was filed in the federal court in Philadelphia alleging gross misstatement of fees and deceptive standards of the federal “FreeFile” program … so even on the surface, it wasn’t always cheap). But I’m not even talking about the money for the service itself.
Using those programs can end up leaving hundreds, or even thousands of your dollars in the coffers of Uncle Sam … even if you follow all of their instructions to a tee. I see it all the time–frustrated clients bringing in their prior year’s tax return, astonished at all the “hidden money” my team and I are able to find for them!
Choosing the wrong method, or forms, in filing your taxes can place you directly in the crosshairs for an audit.
Even if I don’t owe a ton of back taxes, I still don’t want my record to show some IRS agent that there has been some discrepancy in the past so that red flags start to fly, and more bureaucratic people begin looking through all my past tax filings and current income holdings … basically taking my social security number and poking around in my private life.
(If you think they won’t do this, read a little online about the increased “enforcement” measures the IRS is taking this year.)
They can do a lot of things you won’t want them to do. However, if you keep a clean slate (no IRS correspondence with you related to filing your taxes correctly), the opportunities for them to mess with your personal stuff will be limited.
Here’s another reason why this is so important … now more than ever. New government regulations in 2010, delays in Congressional action, and issues with refund “loans” from the big chains are creating a mess in the tax industry… and the “Big Brand Names” (you know who I’m talking about) do NOT want you to know about it. In fact, they’re doing all they can this year to hold on to their business, and trust me — it is not good for you.
Yes, it can be seductive to “go it alone”…to trust a piece of software to point out possible deductions. To trust your work to poorly-trained preparers in a big box office.
But it can be a big trap.
Just ask Tim Geithner.
To your family’s financial and emotional peace!