1. Money Magazine used to do a 'contest' every year where they gave 50 different tax professionals the same information to see what they got back.
Guess how many different answers they got?
50.
EVERY. SINGLE. TIME.
And the differences in taxes owed were 10's of thousands of $
Guess how many different answers they got?
50.
EVERY. SINGLE. TIME.
And the differences in taxes owed were 10's of thousands of $
2. The tax owed ranged from $16,219 to $46,564 (!!!!)
Think about that.
You give the same 'professionals' the same information, but the difference between them is over $30,000.
A YEAR
Also, the difference in what they preparers charged was massive too.
Think about that.
You give the same 'professionals' the same information, but the difference between them is over $30,000.
A YEAR
Also, the difference in what they preparers charged was massive too.
3. The fees for the returns ranged from as little as $520 to $4,500.
Many returns were littered with mistakes, even on such basic matters as dependency exemptions, charitable deductions and the child-care credit.
What is the lesson here?
Many returns were littered with mistakes, even on such basic matters as dependency exemptions, charitable deductions and the child-care credit.
What is the lesson here?
4. First off, it's on YOU to make sure your taxes are set up so you pay the LEAST amount legally allowed.
YOU.
Not them.
Second, realize that during tax season, most professionals are BURIED, so mistakes are more likley to happen.
YOU.
Not them.
Second, realize that during tax season, most professionals are BURIED, so mistakes are more likley to happen.
5. File an extension if your situation is complicated, so they have more time.
And finally, realize that taxes are one of THE key 5 areas where you lose money unknowingly AND unneccesarily (God, I hope I spelled those right), so it's worth it to learn at least the basics here.
And finally, realize that taxes are one of THE key 5 areas where you lose money unknowingly AND unneccesarily (God, I hope I spelled those right), so it's worth it to learn at least the basics here.
6. The other 4 areas by the way, are:
-Your mortgage: more dollars will voluntarily pass through here than anywhere else, but most 'common knowledge' about them is wrong.
-Your Qualified Plans: you're not saving taxes, your postponing paying the tax AND calculating the tax.
-Your mortgage: more dollars will voluntarily pass through here than anywhere else, but most 'common knowledge' about them is wrong.
-Your Qualified Plans: you're not saving taxes, your postponing paying the tax AND calculating the tax.
7.
-How you pay for your kid's education;
-How you pay for other major capital purchases like cars, weddings, vacations etc.
-How you pay for your kid's education;
-How you pay for other major capital purchases like cars, weddings, vacations etc.
8. Being efficient in these 5 areas will free up dollars that can go to your future lifestyle (retirement) AND your current lifestyle like fast cars, big steaks or bottles of expensive red wine.
Back to the tax thing: let's assume you overpay your taxes by $1,000 a year.
Back to the tax thing: let's assume you overpay your taxes by $1,000 a year.
9. If you overpay your taxes by $1,000 a year for 40 years, and you invested that money instead (no big steaks for you!)
At a reasonable long term interest rate of 7%,
you would have an extra $199,635 at retirement.
Pay attention to this stuff.
Little hinges swing big doors
At a reasonable long term interest rate of 7%,
you would have an extra $199,635 at retirement.
Pay attention to this stuff.
Little hinges swing big doors
