Oh ***sigh*** well, Darlings, this Diva Must buckle down and focus on putting together her tax information.
What a bore, but it must be done, after all we don’t want to give to the government more than we have to.
I am fortunate in that the best way to stay up-to-date on one’s tax information is to periodically file it at least every two week, but it’s better if you do it once a week. So that means that you have an “In-Box” to file such material. This means that you have to be very focused and organized to make sure that it is taken care of.
It is so important to designate a day to do all that filing and bill paying and balancing the accounts. Of course when you come home from a hard day of earning the “Diva Bucks” it is hard to get into the mood to do this, but in the long run I have found Mondays to be very good, just think of Mondays as “money days” and it will all make sense, and if you do it every Money day it won’t be so hard or difficult.
My dear friend ‘Mean Kitty’ says that she also ties it in with doing laundry, Mondays for all the underwear, Tuesdays of all the nice outerwear, Wednesdays for the rough outerwear like jeans and sweat suits and Thursdays for sheets, pillow cases and towels, with Saturday mornings for the weekly drop off and pick up at the dry cleaners. I like the way she has that organized.
But one thing to remember if your bills are pretty stable in that you have an idea how much the bills will be then you should be able to budget for any grocery shopping or entertainment over the weekend.
Budgeting is always very important.
Now Darlings do you remember all that information that I posted earlier on my Blog, well remember it will come in handy for you.
Now getting back to doing Taxes---Darlings you must do your taxes no matter what. Until someone or some group comes up with a fool proof lawsuit to show that taxes are illegal we have to pay them.
But never pay more than what the law requires, which means you have to see if you have any tax deductions---don’t think that just because you are renting or living with your parents (until you are Diva wealthy-independent) that you don’t have tax deductions and therefore can only 1040 and 540 EZ forms. There maybe deductions that you are not aware of.
Now it’s too late for this year, but for the year to come, write down and keep receipts of all your expenses, especially if it’s for work. Do not be afraid to ask a tax preparer (after the tax season is past and things have calmed down) what you can take deductions on, spend the money on an appointment with a very good tax preparer to learn what you maybe overlooking.
Remember in some profession if you are required to wear a certain type of clothing that you have to buy or a certain type of style is expected of you because of an image to present you may be able to take that as a tax deduction, the use of your personal vehicle for your job may also fit into that category (so do keep a mileage log as well as repair and maintenance log).
You maybe surprised, and instead have a longer form to do, which could result in more money coming back to you
But always, Always have a good tax peparer do your taxes and confirm if what you have is a legitimate deduction or not.
Of course one of the best tax write offs is owning your own home, I know of two girl friends who went in together to buy a duplex and each live in their own part of it, and it worked fine until one of them got married and wanted to sell off her half, so her girl friend bought it and rented it out, using the rent to offset part of the monthly payment, insurance and property taxes as well as any maintenance..
Sorry Darlings, I did drift off the subject here, but what I want to make clear to you is that there are deductions you may not be aware of, even those that those computer tax programs may not show up.
That is why having it done by a live professional tax person is very important. A really good one will ask you questions, guide you through the process, find all those little savings you were not aware of, by keeping your receipts and cancelled checks you then discover all those little things.
That is why it’s important to do that for at least a year it will give you a guide line to watch for.
Now the second reason to have a live professional tax person do it for you is that they also have to sign their name to the tax form, so if there is a mistake they are responsible as well.
Of course if you are honest with your finances you do not have to worry about being audited.
Also it pays to have a tax preparer be one who can go before an IRS investigation person to argue your case as well. Not all of them can do that, so ask that of your tax person if they have that capability to do that.
My tax person has always said to never take a greater tax deduction than what is legally acceptable unless you have proof that you can take it. The reason is that this would send up “Red Flags” to the IRS. If you increase your deduction you MUST have documentation to back it up---receipts, photos, an evaluation from the receiving agency, cancelled checks, anything to back this information.
Also be consistent each year with your deductions, and spread them around to different charities, for example if for the last two years you’ve been donating to Salvation Army change and donate to St. Vicente de Paul.
This would also apply to cash donations, but if possible always write out a check, it is proof of donating; any change that you drop into the bucket or donation box that’s loose cash will be hard to rove if it’s too much. Or you may not be able to take that deduction at all. So if you want to buy Girl Scout Cookies always pay by check.
Always, always check with your tax preparer with what is safe that you can donate or take a deduction on what will keep you “under the radar”. Some years you may be able to donate a lot and some years not quite so much, so always keep it reasonable.
If you go to the same tax preparer every year, they will send you a checkoff form each year to see if you have the same type of deductions, this is a good model to follow as well as a good reminder on what to watch for the upcoming year. Simple things like the tax you pay on your car license plate may be a tax deduction depending on the tax laws in your state.
And there are many, many more hidden ideas, so ask your tax person.
Oh just the thought of all this makes my head spin, Darlings forgive me but this Diva is going to take an aspirin and focus on her paperwork.
Until Anon Darlings, Happy Deduction Hunting.
