| Tax losses are becoming more and more complex. | | | | approach, more proficient he will be. |
| Most of the people think that hiring a tax consultant is | | | | There are some other ways to help your consultant |
| a better option as he will do some magic to reduce | | | | There are some other methods by which you can |
| their taxes. | | | | help your consultant to get better results. If you are |
| Admitting that there are many competent tax | | | | having sale of stock or mutual fund, you should make |
| consultants to take care of your return, check what | | | | the cost basis available to your consultant. This can be |
| you take with you when you go to request him for | | | | done by adding the reinvested dividends and capital |
| preparing your return? Remember he is not a magician. | | | | gains. So you don't pay taxes on them two times. |
| Go to him with organized papers and let him work on | | | | For getting the necessary statements you need to call |
| them to give you real tax saving tips. | | | | your broker soon after January 1. The broker will take |
| The box system | | | | some time to send you the statements but then its |
| To begin with, save all your receipts in one box, as and | | | | well within the deadline of April 15. |
| when you get them. They will put real dollars in your | | | | It is also important to take an early appointment with |
| pocket. You may walk out of a store without small | | | | your tax consultant so that you are not bothering him |
| change but you should never walk out without a | | | | at the last moment. If you wait until April, he is going to |
| receipt. These receipts are very important because | | | | be very busy and may not be able to concentrate fully |
| IRS is demanding documentation for every claim you | | | | on your work. Taking into account the stress and the |
| make. | | | | workload, you get much better results in February or |
| Once you grab the receipts, put them in a box or in a | | | | March. Also if your consultant wants some additional |
| special file. After a couple of months sort them out into | | | | papers, you have sufficient time to get them for him. |
| categories and put the checks and receipts in | | | | You may be having certain questions which you |
| envelopes with the name of category written on them. | | | | wanted to ask your tax consultant. List down those |
| So you will have envelopes for charitable contributions, | | | | questions and take them with you when you approach |
| medical expenses, property taxes, mortgage and so | | | | him. He may not be able to give you instant answers |
| on. If you feel there is no category then keep such | | | | but he can come back to you after looking at your |
| receipts in a separate envelope. Now it's easy for your | | | | papers. He may have certain questions for you. You |
| consultant to translate them into deductible expenses. | | | | may answer them on the spot or after you come |
| You can do all this work while listening to music and | | | | back from the meeting. But then there should be some |
| such light work will save hundreds and thousands of | | | | time for all this activity. |
| dollars for you. | | | | Leave behind the fear of tax audits |
| Never give your consultant a bag full of unsorted | | | | Many people feel that tax audit is worst then death! |
| receipts. It's the most irritating thing. It will waste his time | | | | But with these preparations you have already reduced |
| and your money. Tax preparation is not a fun and your | | | | the chances of tax audit considerably. Actually what is |
| sincerity will make him happy. Try to minimize his pain. | | | | the main purpose of tax audit? Getting supportive |
| Using this "box" method your consultant will be able to | | | | paperwork for the claims you have made in your |
| complete his work faster and with more accuracy. He | | | | return. So for your claim of deduction of charitable |
| can concentrate on tax planning issues instead of | | | | contributions, the tax auditor is going to ask you the |
| concentrating on organizing the vouchers, receipts and | | | | receipts of your contributions. And if you are already |
| checks. What you want from your consultant is the | | | | equipped with all of them, what else you want? You |
| key question. More interest you show in your | | | | have already audited your tax return before IRS does! |