Financial Planner Tucson, Socially Responsible Investing AZ

When Doing Your Own Taxes Makes Sense…And When It Doesn’t

Tax deadline is April 15, so if you haven’t begun gathering your annual tax records it’s time to do so. Every year, however, people’s lives change – they buy and sell houses and move, they take new jobs, have kids, buy and sell stock. Those and dozens more reasons might give you cause to hire a tax preparer.

It’s worth going over the primary reasons why some people should get help with their taxes and others can continue going it alone.

Should you do it by yourself? If you meet the following circumstances, you can probably do your taxes by yourself:
You work for only one employer who gives you a W-2 tax form each year.
You rent your residence and don’t own a home or vacation property.
You don’t have kids or other dependents.
You don’t have any complex investments such as a partnership, a trust or extensive stock holdings.
You really like numbers, are willing to investigate annual changes to the tax code and double-check your work.
You’re comfortable doing computations by calculator or by hand, or by using tax software on your computer or online.

For do-it-yourselfers with computers, the Internal Revenue Service’s free file program is aimed at some 95 million taxpayers with an Adjusted Gross Income (AGI) of $57,000 or less in 2009 to prepare and e-file their federal tax returns for free. E-file, the IRS’s online tax filing service, is available to both tax professionals and individuals with compatible home computer tax software. You can learn more about the e-File program here.

Should you seek help? It generally makes more sense to get help with your taxes if:

You’re buying or selling property.
You own a business or rental property.
You get regular income from a trust or partnership.
You trade investments frequently or have a complex portfolio.
You’ve undergone a major financial impact during the previous tax year, such as a divorce, death of a spouse, an inheritance or a move of more than 50 miles for a new job.
You are supporting a child between the ages of 19 and 24 who is a full-time college student.
You don’t have time to do it yourself.
You are subject to the Alternate Minimum Tax (AMT).
Your income has increased by a considerable amount from the previous year.

1. You’re still legally responsible for your return even though you have professional help, so it’s important to choose a qualified professional to help you. The IRS gives the following suggestions for finding a qualified preparer:
2. Ask how they charge: Avoid preparers who claim they can obtain larger refunds than other preparers. If your returns are prepared correctly, every preparer should derive substantially similar numbers.
3. Don’t believe promises: If a preparer guarantees results or bases fees on a percentage of the amount of the refund, be suspicious. Tax preparers aren’t allowed to charge a contingent fee (percentage of your refund) for preparing an original tax return.
4. Ask what preparers will need: Reputable preparers will expect you to provide receipts and other paperwork if they need it to justify the return they’re preparing for you. You need to keep scrupulous records.
5. Make sure you know exactly who’s preparing your return: It’s OK if your preparer has onsite staff assistance in preparation of your return, but the person you hire needs to be the person who reviews your return and signs off on it.
6. Investigate your preparer’s record: Check with the Better Business Bureau, the state’s board of accountancy for CPAs, the state’s bar association for attorneys or the IRS Office of Professional Responsibility (OPR) for enrolled agents.
7. Check your preparer’s credentials: Find out if the preparer is affiliated with a professional organization that provides or requires its members to pursue continuing education and holds them accountable to a code of ethics.
8. Stay aware of tax scams: Newspaper business sections and news programs focus on abusive tax shelters and scams. So does www.IRS.gov. If you have a preparer encouraging you to get involved in tax avoidance strategies that are overly complex, check them out before you agree to jump in.

March 2010 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by FFA Financial, a local member of FPA.
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Free Portfolio Review We offer a free portfolio review along with a free upfront meeting for prospective clients. If you know of anyone who could benefit from our services, please have them contact us. The highest complement our clients can give is the referral of their friends and family.

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Where do our taxes go?
According to the Congressional Budget Office, 2010

21% Defense and Security
21% Social Security
20% Medicare, Medicaid & CHIP
14% Safety net programs
9% Interest on debt
6% Benefits for federal retirees & veterans
3% Transportation infrastructure
3% Education
2% Scientific & medical research
1% Non-security international

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Second Quarter Meeting
For our full service clients, the Second Quarter of 2011 meeting will include a thorough review of all of the insurances you carry. Please bring the most recent statements from all policies including home owners, vehicle, health, disability, long term care and any others. Please also bring your 2010 tax return.

ADV II forms
If you would like a copy, please contact us.

Our firm is accepting new clients and will always make time for your referrals.
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When you have called us, you may have noticed a different voice on the phone. That’s Wynelle Waters, our new Administrative Assistant. Wynelle is originally from Atlanta ( thus the accent! ), where she began her career as an English teacher. Then she moved into banking, sales, and eventually started her own company: Meeting Makers. She sold her company and moved to California. There she worked as an administrative assistant, office manger, PR coordinator for a circus, and an entertainer. She has been a runner for 33 years, and loves the Tucson weather and landscape. She’s glad to call Tucson home, and we are glad to have her.

We are delighted to have Wynelle on board and know this will add quality to the service we provide.

Sylvia

CFP certified financial planner tucson invest

Financial Freedom Associates

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When Doing Your Own Taxes Makes Sense…And When It Doesn’t