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Taxes, Taxes, Taxes...They get me every time!!
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Posted by marci4tony Tue Oct 16, 2007 14:44:39 MDT
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0 responses 0 comments Did you get a nice windfall this past Spring?  Or did you get taken to the cleaners?  Did the Internal Revenue Service send you a nice little refund check and then have to mortgage your house for the State Tax Commission?

If you did anything but spend a refund, it's time to re-visit this topic - INCOME TAXES!

You need to ask yourself - "What is happening this year (2007) that was different than last year (2006)?"  If nothing significant has changed in your life, then you shouldn't have any of the surprises (that caused 14 undocumented cases of heart failure last April 17th!)  But, if you do, I suggest you to make yourself a checklist.  There are 3 main areas to look at.
DEPENDENTS
INCOME
EXPENSES

1.  Something changed in my dependents - New baby, 17yr old child, divorce - any number of things that can change that dependent number.

2.  Something changed in my income - New job, salary increase, extra job - Just remember, that SALARY INCOME is NOT the only income...there is interest income, sub-contractor income, gambling income, retirement income...

3.  Something changed in my expenses - Bought a house, sold a house, serious medical bills, donations (get those receipts, people, for your household goods...)

If you can identify very little change, than you shouldn't have any surprises.  But if something has changed, I urge you to get in touch with a tax professional (CPA) for a "tax planning" session.  They can take your paystubs, your earning statements, your lease statements, etc. and crunch the numbers into something that will help you avoid having that 5 figure surprise.  Sometimes, you have to spend money to save money - Ask any farmer; they could tell you the concept of that one in relation to taxes. 

A tax professional can identify problems that can be fixed prior to the end of the year; they can help you come up with a solution to offset any surprises.  AND, a tax professional can help you understand what that IRS notice you received in the mail means. 

And I'd bet you'd be surprised at the cost of the tax professional for processing taxes.  There is a town full of qualified CPA's that would be more than happy to sit with you for a while and discuss your Income Tax situation.  Big, Medium, Small - it makes no difference.  Sure, those "insta-tax" places are convenient, but if you cared enough to look closely to the "bang-for-your-buck", a tax professional is the most cost effective.  After all, wouldn't you like to have a CPA on your side when you get one of those special IRS notices?

Check your paystubs - check your withholding.  If you had to pay last year, you may want to change something with your withholding before the end of the year, or its "you-have-got to-be-kidding-me-I-owe-what?" syndrome Chapter 2 coming soon - April, 2008!

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