audit

All posts tagged audit

Tax Time Again

Its that time of year where I really need to file my tax return and get my $2,000 out of the IRS. I really hate doing my taxes and I usually file an extension and postpone it until the very last moment. This year my wife suggested a novel idea. Have my CPA do them! I normally do them myself, but last year I found a competent CPA and had him look over them after I had already done them. He said they were fine and didn’t need any changes, so I had him sign and send them in. According to Perfectly Legal, this reduces your chance of an audit.

I really hadn’t thought of just giving him all the stuff and having him do the taxes. Its probably my deep-rooted belief that no one cares for your money like you do. My CPA’s very competent and probably does several hundred tax returns a year, so his knowledge is better than mine and he’ll probably do them quicker as well.

Incidentally, he set me up with a 401k pension plan combo for my corporation, of which I’m the trustee! So technically I can invest in any damn investment I please and its all tax deferred!

Of course, theres a lot of discussion about investing in 401ks and avoiding the capital gains tax but being stuck with income tax when you withdraw [income tax is higher than capital gains, hence the discussion]. While that true, everytime you realise a gain on an investment, you need to pay tax[unless you defer it using a 1031 or some other method]. This could be as often as every year! This way atleast I don’t have to worry about taxes for 30+ years!

Of course a better way would be to use a self-directed ROTH IRA. I’m currently researching how to set one up and I’ll post my findings soon.

A really good book on tax deductions is 422 Tax Deductions for Businesse. Its a very easy read.

Another good book I read over the weekend is Missed Fortune: Dispel the Money Myth-Conceptions–Isn’t It Time You Became Wealthy?. I only read the half the book on not paying off your home and leveraging it into better investments. I didn’t read the part on insurance but its a pretty interesting book nonetheless.