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Is Your Tax Professional Really The Problem?

by

Tom Ajava

What happens every year around tax filing time? The level of complaining in the United States goes through the roof! The problem? Nobody likes paying taxes. This leads to complaints about the government, IRS and tax prepares in some cases. The question is often whether a bigger problem can be found in the mirror?

How do most people handle their taxes? Common, admit it. If you are in the majority, you start thinking about the problem somewhere around the middle of March or perhaps even later! There is usually a panicked effort to get documents together. Then, you just drop by your tax preparers office and leave them there in an envelope. I even know someone who takes a shoe box of receipts!

While there is nothing illegal or wrong per se with this approach, it is foolhardy. Anyone who takes this approach has no right to complain about taxes. Why? Theyve made no effort to minimize their tax bill by doing some planning. Lets look at a classic example of how this might happen.

You work for the man! Its okay, you enjoy working at the company. Even better, the business offers a host of benefits and a 401(k) is one on the docket. Youve put $5,000 in this year and know you should put in more. The holidays hit, however, and you dont put anymore in even though you have a bunch of money set aside. You could have put in $16,500 in 2009, which means you left $11,500 on the table. This is going to be reported to the IRS as taxable income, which means you have to pay tax on that amount instead of sticking it in your 401(k). Now who is to blame?

This is an obvious example, but it happens all the time. Those who say write-offs are dead are simply wrong. They are not dead they have simply changed. The area where you can really save on your tax bill these days is not tax deductions, but tax credits. There are a ton of them and they reduce your taxes dollar for dollar. Make sure to sit down with your tax professional and map out a plan to take advantage of everything the tax code will give you. Only then can you really complain about taxes.

Thomas Ajava writes for

PersonalIncomeTaxLawyer.com

– where you find a personal income tax lawyer to handle any tax problems you might be facing.

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Is Your Tax Professional Really The Problem?}