The Brainiac is BACK!!! Yes! Okay, a break I really needed. Caught up on some sleep, played with the kids, and got some needed work done, both business and personal. Taxes. Yuk. Can’t complain too much though. I help out a friend of mine that’s an accountant, and every year I help him prepare his client’s tax returns. Good experience for me, since I still haven’t decided what I want to be when I grow up…. I enjoy accounting (I know, it’s sad….), and for some reason, I especially like tax accounting. Don’t ask me why. Maybe it’s all the rules and regs that you have to keep track of, and how it all works. Maybe. Either that, or I’m just a sadist.
So I’ve been preparing other peoples’ returns. Nice to see that other people pay more than me in taxes, or get less refund amounts. I guess I can’t complain all that much. So far, I’ve gotten a nice refund every year. How do I manage that? I’ll tell you…
First off, it helps if you talk to your accountant on a regular basis. Yes, I’m talking about more than once a year, at the 11th hour, while attempting to do your own taxes and avoid the costs of having them professionally done. I personally talk to my accountant once a month, about where I am financially, ideas that I have, etc.
Yes, I talk to my accountant about financial ideas. If I’m looking into purchasing equipment for my business, and it’s not the first half of the year, I talk to him about it. Believe it or not, that has a bearing on the Schedule C for self-employed people. If I purchase software or equipment after the halfway mark, it’s harder for me to deduct, as I can’t claim as much of it. Unless I attempt to claim it all in one year. Software I can do that with, hardware – not so much. Uncle IRS tends to frown on that.
But more importantly, the investments that I want to go in on can have major consequences. Certain bonds are taxable at some times, while others are non-taxable until they’re redeemed. A very tricky world. So, that being the case, I talk to my accountant.
Yes, it helps that I’m on very friendly terms with him. And we have a tradition that we do every year. On April 15th, I cook a very large, wonderful dinner of steaks for him, his wife, my kids, and myself. This is a GREAT way to wind down after a season of stress.
From one tax preparer to client, let me ask all of you to do something. Please don’t wait until the weekend before D-Day. Be sure to give your accountant plenty of time to review things, and be sure that you have everything there that they’ll need. It’s truly a miracle if a client remembers every, single, little thing that goes on a 1040.
For example, my accountant has a client that he has an annual bet with. This client has a cushy job (meaning very well-paid). His wife does nothing but research investments and spend her time investing his hard-earned money. And she does a pretty damn good job too. She could certainly give those boys on Wall Street a run for their money. Well, every year, this client tries to bring over practically the whole file cabinet in an attempt to outwit the accountant. In the 30 years, he has never sucessfully been able to do so. Every single year, the accountant finds something that the client forgets to bring. Even when the client has a checklist that he prints out every year to remind him of what documents he needs to bring. LOL Needless to say, it’s always interesting to see who will be buying the steaks… And a lot of ribbing that goes on with it.
So be sure to say a big thank you to your accountant this year, and don’t complain about how much it costs to get your taxes done. After all, they went to school for this stuff. And no, I’m not talking about going to H&R Blockhead or Jack-Up Hewitt. Those people really don’t know what they’re doing. Sorry, but you can’t take a 6 week class part time and expect to know what the rules and regs are. You can get a good idea, but it’s not enough to be able to know who can take what deductions.
And especially, don’t fall for this RAL crap. Refund Anticipation Loan. All it does is take a bite out of your refund check (if you get one) and finance these sleazy H&R Blockhead types.
Speaking of loan sharks, here’s today’s tidbit of useless information. Did you know that every year, these H&R Blockhead types get hit with penalties from the United States Government for unlawful APR’s? If you do the math, with the amount of refund checks to turnaround time, they equal to approximately an average of 85% interest rates. 85%!!!! Hello?!?! Does anyone else see how unfair that is? And consumers out there think that 8% is too much to pay for a mortgage! Wake up people! So don’t fall for the line to get a RAL. You’re just wasting your money and time, and at a time when every American needs to tighten up their belts and stop wasting money on unnecessary things!
Okay, enough for one day. More to come!