Monthly Archives: January 2009

5 Reasons to File Past Year Tax Returns – Today!

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As important as April 15th is, it’s equally important to remember that if you miss the deadline, it’s still possible to file past year tax returns. In fact, doing so can often being extremely beneficial. Here are a few reasons why filing those old taxes is so important:

* It can get you a refund Did you know you were eligible for a tac refund up to three years after the deadline? It’s true. In fact, studies have found that most people who need to file past year tax returns are actually owed money. So instead of putting it off because of your fear of being fined, think of it as a way to get money that’s been waiting for you!
* Your fines stop the minute you file. Even if you’re one of the unlucky few who do owe money, by filing you past year tax returns you stop those fines and fees in their tracks! From the second you file, your fees are put on hold–and then the IRS or an online tax service can help you figure out the best way to start paying those back taxes down.
* You can pay your taxes down monthly. If you do owe money, don’t panic! You don’t have to owe it all at once. The IRS understands that you might not have a few thousands just sitting around somewhere. The important thing is that you do start paying them, because it reduces your penalties. There’s no reason to wait to file past year tax returns until you have the penalty amount saved up–start now! The more you delay, the more you hurt yourself.
* You can do it online. That’s right, you don’t have to go into the IRS, cap in hand, and beg for their forgiveness. You can use their e-file service (or, even better, an online company who are experts in back taxes) to file. No fuss, no muss, no having to face someone and feel guilty. You can file past tax returns with the click of a button.
* You get piece of mind. Let’s face it–being in debt is never fun. It hangs over your head and makes future financial necessities harder. And that’s especially true with back taxes. The truth is, most people feel a weight lifted off them the minute they file past tax returns. They lose an extra burden and can start to move on from the ghost of their financial past and into bigger and better things.

The IRS has made it so you can file past tax returns easily, simply, and with no extra penalties. They may be bureaucrats, but here you’re working together. You want to move on from those back taxes and they want your money. So enlist some professional help and file any past tax returns you have.

Why wait!? File past tax returns today and start the process of getting on with your life. Don’t put it off another day.

Tax Returns – Should You Prepare Your Own?

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Should you complete your own tax return? Is completing your own tax return an essential component of tax planning? No and no.

Completing your own tax return is only for those who have the very simplest of returns. For example, if you are an employee and tax has been deducted at source, and you have no entrepreneurial income, no rental income, no investment income, etc. then you may as well complete your own tax return because there are no exciting deductions available to you and your return will be extremely simple and straight-forward.

In all other cases, with any business income, any rental income, any investment income, you must seek professional guidance. Learn from the legal profession which has an interesting saying: “He who represents himself has a fool for a client.”

If I can borrow loosely from that wisdom: “He who completes his own complicated tax return is a fool.”

If you have a complicated return, then ask yourself some questions:

· Was math my best subject in school?
· Have I ever studied accounting or bookkeeping?
· Have I ever taken courses in creative but legal and allowable deductions?
· Have I updated my knowledge of legislation related to tax for this tax year?

If you are noticing that you getting a rather repetitive no, no, no, no to the questions above then why are you doing your own returns. You know nothing and you are wading into an arena in which professionals study tax for years to get into the profession and then update their knowledge every single year to keep current. How can you hope to do as good a job as an accountant or a reputable tax preparation service can do?

Stated another way, would I personally retain you to do my own tax return? If you replied ‘no’, then why would you retain you to do your tax return?

I cannot possibly do my own tax planning. My job is to maximize my income and minimize my expenses and serve my clients. My tax planners job is to advice me how to legally and honourably lower my income tax. I meet regularly with my tax planner and get his advice. I follow his advice. I do not have his wisdom; I use his wisdom. And, I do not wish to attempt to gain his wisdom to do my own tax planning because it is not my interest. I want to do what I love doing and I want to have a powerful tax planning professional and a dedicated tax return professional serving me.