TAX EDUCATION

Whether you prepare your own taxes or pay a tax professional, you are ultimately responsible for the information in your tax return. Make sure you understand this information before you sign the tax return. I have talked with many taxpayers (YOU) who were unaware of the information in their return. If your tax preparer is not taking the time to explain to you what is or “isn’t” in your return they are not serving your best interest. GET EDUCATED, ask questions. I would strongly recommend that you keep your tax advisor’s phone number on speed dial. Effective tax reduction requirers planing and review through out the year. Tax filing season January through April 15 is “report card” time. This is when you get to see how effective you tax planning was, this is not the time to try to lower your tax liability.

The IRS website (www.irs.gov) has many links to various tax topics which will assist you in paying the least amount of tax that you are legally obligated to pay. One of my personal favorites is the IRS Daily Tax Tip. You can subscribe to this newsletter and each day you will receive a bit of useful tax information that may help to lower your taxes. You can then discuss this information with your tax advisor (by the way his fees are deductible). They are short (3 – 4 paragraghs) and easy to read. Below is a recent posting:

Six Facts about IRS Publication 17
Starting with “What’s New for 2010” IRS Publication 17, Your Federal Income Tax, takes you step by step through each part of your individual Federal Income tax return. This comprehensive booklet explains the tax law in a way that will help you better understand your taxes so that you pay only as much as you owe and no more.
Here are the top six things the IRS wants you to know about Publication 17.
1. Publication 17, Your Federal Income Tax, is available on the IRS website at http://www.irs.gov and contains a wealth of information for individual taxpayers.
2. The online version of Publication 17 contains electronic links that make finding your answer simple. Both the downloadable PDF and online 2010 Publication 17 have thousands of helpful hyperlinks.
3. Publication 17 is packed with basic tax-filing information and tips on what income to report and how to report it.
4. Publication 17 also includes information on figuring capital gains and losses, claiming dependents, choosing the standard deduction versus itemizing deductions, and how to claim valuable tax credits.
5. Publication 17(SP) El Impuestos Federal sobre los Ingresos is available in Spanish.
6. You can get a hard copy of Publication 17 for free. To get a copy, visit http://www.irs.gov or call 800-TAX-FORM (800-829-3676).

Links:
• Publication 17, Your Federal Income Tax
• Publication 17, Your Federal Income Tax (PDF 2085K)