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How to Make Taxes Less Taxing
Reprint Instructions: This article may be reprinted freely with
bylines and URL. Please email me to let me know where the article
will be placed. Thank you!
How to Make Taxes Less Taxing
by Donna Schwartz Mills
http://socalmom.typepad.com
Some folks have already filed their taxes and have moved on
to this year's issues. The rest of us -- unfortunately --
are just getting started.
In my case, it's not the part about paying taxes that I
find so painful (although that part is bad enough!) It's
the bookkeeping. Although I start out every year with
the intention of keeping thorough and accurate daily
records, this usually breaks down by the time school
lets out in June... and I spend several weeks leading up
to April 15th reconstructing the previous six months.
A good accounting program would make this easier. Tax pros
like Eva Rosenberg ( http://www.TaxMama.com ) and Jeff
Parrack swear by QuickBooks, easily the most popular small
business bookkeeping package on the market. At $199, it's
not cheap -- but if you purchase from Amazon now, you'll
get a $50 rebate... and it becomes a deductible expense on
your tax return next year.
If your enterprise is too small to warrant the benefits of
QuickBooks, you might try tracking your business-related
expenses and revenue in Quicken Home and Business.
Those of you in network marketing, with inventory and
personal sales needs as well as multi-tier commissions
should take a look at MLMTaxHelper, which was specifically
designed to help networkers track their revenue and
expenses:
http://www.mlmtaxhelper.com/g.o/donna1001
But keeping good records is only half your battle. By
January 31st you should have had everything together so you
could start filing your tax forms. If you have ever tried
to do this yourself, you know how unfathomable the 1040 can
be. It's really tempting to just take the standard deduction
and be done with it, as do millions of Americans. But if you
fail to itemize legitimate deductions, you could literally
be *throwing away* thousands of dollars you are *entitled*
to keep. And, if you own a home business, you *have* to
claim your profit and losses on Schedule C... the question
is, why wouldn't you want to?
"If you are a serious small business owner and have a
Schedule C on your personal tax return, let me look at it
and in 15 minutes I can show you at least an additional
$10,000 in income tax deductions that you missed out on that
could have put over $3,000 cash back into your cash
register, your wallet, your purse, or your pocket. And
that's just for one year," says Jeff Parrack.
So, let's say now you've got your record keeping together
and understand what kind of expenses you can deduct. You're
ready to roll, right?
That depends -- filling out those forms can still take you
several hours, and they can be so confusing that you may not
be sure you're doing it right.,
For years, I swore by TurboTax, which does a pretty good job
of taking your through all the forms and schedules you need
to file your taxes. But last year, thanks to a burgeoning of
different business ventures, investments and an inheritance,
I realized that my tax situation had become too complicated
for me to handle myself with confidence. It was time to hire
a tax pro.
Fortunately, I live near the offices of Eva Rosenberg, the Internet's famed TaxMama, whose new book has been published by McGraw-Hill:
Small Business Taxes Made Easy
Eva is an Enrolled Agent who specializes in helping
proprietors of small businesses meet their tax obligations.
Before I turned my paperwork over to her, I'd tried to do
the forms myself using TurboTax. After Eva finished with
them, the total tax owed was a few thousand less than what
I came up with using the software alone. Her services were
well worth her fee -- which, of course, will be deducted
on this year's return. And when you factor in the time I
saved by letting her do it for me, I think I actually made
a profit.
The National Association of Enrolled Agents has a searchable
directory that will enable you to locate a tax pro in your
area:
http://www.naea.org/tax-index.cfm
Do visit Eva Rosenberg's site and subscribe to her ezine,
which will keep you up to date on all the issues and
deadlines you need to be tax compliant:
http://www.taxmama.com
The Internal Revenue Service has one of the most user
friendly websites of any branch of government, and is THE
ultimate resource for all of your tax questions:
http://www.irs.gov
Tax Analysts http://www.tax.org is a nonprofit
organization founded in 1970, advocating worldwide tax
systems that are fair and fiscally sound. They have a
fascinating site with information on international tax
issues. It's where I picked up the following quote:
"Taxes: Of life's two certainties, the only one for which
you can get an automatic extension."
**
Donna Schwartz Mills writes about the specific needs of work at home parents. Read her weblogs: http://socalmom.typepad.com/parentpreneur, http://socalmom.typepad.com. Donna also owns and
operates http://www.Family-Content.com, the web's largest
resource devoted to family-oriented website content.
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