April 15 to send in your taxes? Or perhaps, you’ve been so busy that you had to file for an extension? If so, then hiring a CPA is probably a good idea.
Plus, you know that little box on the bottom of the second page of the tax forms, the one that says preparer’s signature? By hiring some- one to prepare your taxes for you, if there is a problem, it becomes their problem, too. If you make a mistake, the IRS hunts you down, right? But if your CPA makes a mistake, it’s his or her problem, too, because it’s the CPA’s job to make sure that things are done correctly. Therefore, the onus of doing the job right falls directly onto the CPA, not you. This may result in fewer sleepless nights for you!
Not Using Qualified Plans We talked about this earlier. Qualified plans are one of the best ways to help lower your taxable income and shelter your money from cur- rent taxes. Not utilizing these types of accounts is one of the surest ways to cost you money, both currently and over time.
Investing in Bonds Needlessly The tax advantages of muni bonds are for those with higher incomes. While I’m not advocating that those in the lower tax brackets stay away from municipal bonds, I am saying that there may be other investments better suited to those investors. Evaluate your tax situation and make your decision based on that. If you want to add some stability to your portfolio by using bonds, there are different types of bonds that exist that may give you higher returns. And, those after-tax returns may be higher than those returns offered by nontaxable muni bonds.
BEYOUR OWN BOSS
For many people who own their own businesses, they have found that working for themselves is far more rewarding than working for others. But, they’ll also probably tell you that it’s a lot more work. There are a number of ways that individuals can own their own business: sole pro- prietorship, partnership, corporation, LLC, etc. The way your busi- nesses is established could mean a lot on tax day. Some forms of