Comments on: The #1 Tax Tip for 2008

By: Danielle

Danielle — Fri, 02 Jan 2009 02:19:17 +0000

My husband hates claiming some of the smaller deductions like goodwill donations, and < $100 donations to non-profits etc.

In order to make him more comfortable I had to get advice from friends who often donate to goodwill and I got this tip.

The easiest way to prove goodwill donations is to take a photo of the pile of donated items each time (in addition to getting a receipt from the store you drop off your donation at). We have not donated yet since getting this advice, but it seems to be good in the event of an audit and not too hard to remember to do.

By: Craig

Craig — Tue, 30 Dec 2008 15:19:06 +0000

@Eric Thanks for the tips. I’m going to make sure that I ask questions and learn more about what’s going on. There is a trusted professional who has been doing my family’s taxes for years and will most likely end of going through them, but this time on my own.

By: Nick

Nick — Tue, 30 Dec 2008 08:45:19 +0000

Rich,

You know they will never do that…….it would be nice, but it’ll never come about.

Nick

By: Rich

Rich — Tue, 30 Dec 2008 04:11:42 +0000

Imagine how much money the government could save if it simply implemented a flat tax system and closed all of the loopholes. It wouldn’t have to employ so many IRS agents, and the simplified tax system should help people to pay the correct amount of taxes.

By: Eric J. Nisall

Eric J. Nisall — Mon, 29 Dec 2008 23:58:29 +0000

@Craig:

Accuracy when talking about a tax return is really subjective. The best way to ensure that it is accurate is to be completely honest and reveal all pertinent information regardless of how inconsequential it may be (ie: interest income of $15). Unfortunately, there are some “professionals” who will stretch the limits of the truth in order to get their clients a larger than deserved refund. Talk to friends or colleagues to find out who they use and always ask if they get back a refund that is much larger than they anticipated, and if the preparer asked a lot of questions/requested documentation to substantiate any information given. Usually a trustworthy preparer will always want to cover themselves by having everything included in the return documented in some manner, and will ask for explanations on any point which they are uncertain about to ensure the most accurate return possible.

By: Craig

Craig — Mon, 29 Dec 2008 21:38:14 +0000

Any ways to check if the return is accurate? I am new to doing taxes, probably will send it out to a professional to make sure everything is squared.

By: Studenomics

Studenomics — Mon, 29 Dec 2008 17:40:07 +0000

Believe me the last thing you want is to get caught for tax evasion, especially if you run a small business. I personally always fill everything out because due to my tuition I get a tax return usually. I have had friends who either run a small business or make some extra money and feel that the government does not need to know. Let me assure you they need to know everything.

By: Eric J. Nisall

Eric J. Nisall — Mon, 29 Dec 2008 14:34:09 +0000

Aside from advising everyone to actually file their income tax returns, that advice has to be the most accurate and beneficial tip I have read to date. People do not understand that the government only wants the people to pay their fair share, no more and no less. And, like you stated nickel, if you are accurately and honestly filling out the return, then an audit will be a breeze. They will simply ask you some questions to substantiate any claimed deductions and if they are legitimate, no further action is required.

What you are referring to is the difference between tax avoidance and tax evasion. The difference is that tax avoidance is a legal method of minimizing tax liabilities by timing and structuring activities and spending so that they will have the least tax consequence. The problem lies with the Pete Rose’s Wesley Snipes’, etc. who fail to even report certain income or don’t even file a return, which is tax evasion.