MAKING APRIL 15TH YOUR FAVORITE DAY
A good rule of thumb when it comes to protecting yourself against fraudulent schemes is that if it sounds too good to be true, it probably is. Another thing to look out for are books that propose that you don’t have to pay taxes. They base their claims on outrageous statements like the IRS has no jurisdiction outside Washington D.C. and Puerto Rico. Or they will say that we don’t have to pay taxes because we are sovereign citizens. No matter what they claim, it’s all false. But more importantly, people have used these claims to defend themselves against paying taxes in court, and have lost. They then are subject to the back payment of tax, as well as fines and interest. P.T. Barnum once said, “There’s a sucker born every minute.” Don’t let that be you.
There are many different ways to save on your taxes. After all, no one wants to pay taxes. We’ve really only touched the tip of the ice- berg. There are more, complex strategies that can help you save on your taxes that your CPA can help you implement if they are right for you. But what’s also important is that you don’t find yourself doing things solely to save on your taxes. Reduced taxes are an added bonus, not your ultimate goal. It’s vital to look at your tax situation and bracket to determine what your best course of action is. Everyday life changes all the time, right? So does your tax situation, especially now that the federal government has decided to revise the tax laws and lower everyone’s bracket each year until the year 2006. (See Table 10.1 for the new tax brackets.) Therefore, what was the right strategy for you last year may not be the right thing to do this year. Make sure that what you are doing is the right move for you, not just for your taxes. If you are unsure how to proceed, check with your CPA.
The more money you make and the wealthier you become, the more important your CPA becomes. The more your CPA knows about your situation now, the more he or she will be able to help you in the future. Don’t be afraid to ask questions, either. No one wants to pay more than their fair share, and you may find that by asking questions, you uncover a new way to save yourself some money!