If you couldn't tell by the utter onslaught of tax preparation service ads and the sudden presence of temporary cubicles in that once abandoned retail space at the corner of your favorite strip mall, let us be the first to remind you that it's tax season.
We take interest in this time of year because tax returns can mean one of two things to our readers: more debt or more money. Since we are all about helping you figure out what to do with your debt, we hope this post will educate you regarding what tax season can mean for your financial well-being.
There are number of tax deductions out there that get ignored by a lot of families. Worse yet, they are not even addressed by many of the "come-and-go" tax return preparation services out there. On that note, we encourage you to take caution when deciding who to work with if you are not someone who handles returns on your own. We should also point out that there is good reason to hire someone to help with your tax returns, primarily to alleviate stress and ensure they get done correctly.
That being said, make sure that the person you hire is an actual financial professional, not someone who was just trained to punch data into a computer program. Ask friends or co-workers if they can recommend a reliable Certified Public Accountant that has a tax service. Yes, it will cost you more money, but not that much more.
If you have no choice but to use a temporary tax shop, ask for the most senior member of the team. Many of these operations do have supervisors on staff with actual accounting and tax experience. Remind them that there are countless shops just like theirs that would prefer your business to encourage the top person to give you appropriate attention.
To further ensure you are getting the service you deserve, remind your tax preparer about the most often missed tax deductions. An article on MSNBC.com highlighted seven of them, which do require you to itemize:
- Home ownership deductions can include mortgage interest, property taxes, fees involving the sale of your home and agent commissions.
- In North Carolina, the personal property tax you pay on your car each year can also be a deduction.
- Always hang on to your receipts for charitable donations, even the bags of clothes you gave to Goodwill. When any charity asks you if you want a receipt, say yes.
- Did you know you can deduct mileage expenses if you use your own car in a charitable effort? You can. Go back and write down when you did and even keep receipts for bus trips to the location of your volunteering. Parking fees and other tolls count, too.
- If you had to travel for work, keep track of any dry cleaning and laundering receipts for clothes you needed on behalf of the company. This only counts if you are required to look the part and don't try it with the torn jeans you wear on the flight.
- Also related to business travel are the costs of shipping materials or paying for your baggage, which many airlines now require. So hang on to those receipts as well.
- Other miscellaneous deductions related to work include costs for faxes, Internet access or hotel phone calls. You may also be able to deduct moving expenses. Make sure you provide good proof that the costs you incurred are directly related to the available deduction category.
We would hate to see your tax bills become the reason you have to file bankruptcy. However, if you have been stuck with a large tax bill from the past, or if you anticipate owing taxes that you can't pay all at once, you should consider bankruptcy as an option to either discharge taxes eligible for discharge or pay certain taxes that can't be discharged over a period of several years through a Chapter 13 plan. If you have any questions about how tax bills are handled in Chapter 7 or Chapter 13 bankruptcy, give us a call, we'll be glad to help. Call +1-919-646-2654 to schedule a FREE consultation with an experienced bankruptcy attorney at the Law Offices of John T. Orcutt.