MAKING APRIL 15TH YOUR FAVORITE DAY
lous record-keeper. However, he also kept things that were of no importance. Therefore, upon his father’s death, my client had to wade through the quagmire of paper that his father had kept for years and years. It’s very important to keep good records of your investments and transactions, but that prospectus that’s eight years old? It’s all right to throw that away.
Mathematical Errors These are probably the easiest to fix, but the most difficult to find. Many times the only mistake in a client’s taxes is that two numbers are added incorrectly or aren’t entered correctly. The most common mistake that I see happens when people use spreadsheets they have formulated themselves to help them. If there is an error in the spreadsheet, it will continue into perpetuity as long as you don’t know the error is there. This is why it’s important to have someone else double-check your work. If they find an error that you missed, they may have just saved you some money. However, that’s not to say that all errors result in your paying more taxes. There are times when the errors that are made result in the government’s paying more back to you. But, when the IRS goes over your return and finds an error, if it’s in their favor they’ll let you know. If it’s not, they’ll let it go.
DoingYour Own Taxes If you are a trained tax specialist or a CPA, then doing your own taxes makes sense. Even if your taxes are simple you don’t itemize, and you use the 1040EZ form, then doing your taxes is alright. However, if that’s not the case, then perhaps you should consider hiring a pro- fessional. The advantages of hiring a professional outweigh the potential cost of paying someone to prepare your taxes.
First, whomever you hire will be more objective about your tax situation than you will be. Second, tax professionals are trained in up-to-date tax codes. They know what they’re doing and what the best way to do it is. They also know the best way to save you money on your taxes and whether you should itemize or not. Third, hiring someone will help stem the tendency to procrastinate. Are you one of those people who stand in line at the post office at 11:30 p.m. on