I have a vivid imagination, always have. I could entertain myself for hours, playing pretend and talking to my stuff animals as a child. However, as a grown up, the horror stories I hear about tax preparation, about people overpaying in taxes, the lies about how the IRS came after people without warning, and all those who claim to be able to help negotiate payments and interest; it’s not my imagination and not stories I could even think to make up or desire to tell. Unfortunately, the stories are real. EVERY YEAR, I meet, and help people who have been scammed by friends, given false hope by others, overcharged and under-represented! EVERY YEAR, I hear another story, another person’s account of events and how what should have been simple became a nightmare for them!
I’ve thought about providing advice and tips for tax preparation for years and always talk myself out of it. To me, the things I would share are simple but then again, this is what I do. After hearing the latest story, I’ve decided to provide tips, information and I hope it will some of you make better and more informed decisions about handling your finances and tax preparation.
I received a call from a client, who told me that she had contacted the IRS to negotiate paying off a large balance she owed. Now her balance came as a result of a mistake made but nevertheless, the mistake cost her. As her preparer, I advised her to enter into a monthly payment arrangement. Most people shutter at the thought of owing the IRS but it’s not bad unless u ignore them. When you ignore them for years and I do mean years, that’s when they begin to seize accounts and funds. For the majority of those who find themselves owing “Uncle Sam,” find that if you make the monthly payments, your life will be pretty normal, just another monthly bill. At any rate, advice she received from a trusted friend, who bragged to her about calling up the IRS and negotiating with them to pay a lesser amount than the amount owed. She believed him and decided to give it a try. She said the IRS agent chuckled, as she asked could she pay any amount today and have this debt removed or wiped out? The agent said, “if we allowed people to call us and negotiate the amount of their payment, do you know how much money we would lose?” Immediately, she said that made since to her. Luckily for her, she had followed my sound advice and setup the payment plan but for the next few minutes, that agent educated her for free on the scams and stories people tell about their debt with the IRS.
Having worked with diverse people in diverse situations, I’ve seen it all. I even had my own personal situation with a former employer. So I know all too well that not every run in with the IRS has to result in total loss, at the same time, as I educate clients when doing their tax preparation, it has to make sense, be reasonable and most importantly be documented.
1) If it sounds too good to be true, it probably is – we all quote it but at the same time, we tend to look for the loop hole, the secret and so that hope makes one fall prey to become victims. The IRS would not have authority or power if they made deals all the time with people about paying what they owed!
2) Ask questions – I have the clients who ask questions all the time! LOL I say it in that manner because I meet people who will tell me what their barber, friend or auntie says that doesn’t have my experience, skills or knowledge in tax preparation. Nevertheless, I address each question. I understand that handling tax situations is difficult, confusing and quite intimidating; it is my job to explain it thoroughly as possible and to make sure that my clients understand what they have received upon completion of the their taxes and that they are satisfied and comfortable with their return.
3) It’s YOUR Responsibility – When it comes to tax preparation, just know ignorance isn’t an excuse. You are held accountable for your own return, so ask questions! Get an understanding. In some cases, I copy, email and show clients laws, information to back what I tell them.
4) Don’t take crazy risks! – A few extra dollars that you will waste anyway isn’t enough reason to mess with the IRS! It’s just not! Be wise and instead of waiting until the last minute be better and plan ahead for tax preparation!
5) YOU WANNA BE RICH, THINK RICH! – One thing people do that really have money is that they plan! People who do not have any form of bookkeeping for his or herself personally will always be running and chasing the dollar, they will be a day late and $50 short each time! They do not think in advance but find themselves thinking behind and hoping for big breaks! Being rich isn’t about what you can buy, it’s about how much you can make, how effectively you can distribute what you make and how efficiently you can use what you have to make more and retain it! You can’t do that, thinking and planning at the last minute!
6) INVEST! – Do you know how many people say that they are going to do their bookkeeping personally each year? It’s just like any other profession that people do for a living. Rather than paying a professional for professional results, we would rather spend the money frivolously and try to do something that one isn’t knowledgeable in doing! I even had a friend (she wasn’t really a friend) who would call me to get the answers to do the job; she could pay me to do! Of course that ended after one question but it was quite disrespectful to say the least and she’s no longer a friend. The point? People are paid to handle financial duties and a wise person will employ them, invest into better management so that he or she will reap the rewards later.
7) STOP, REVIEW, LISTEN & GROW – Handling your finances can’t be something you just do on the go. It has to be something you take time to understand, not in the sense of being able to do it yourself but understand how it affects you, your plans, your next level and future. Many people will come to me, get reports and never understand what the reports mean for them or how they can change or improve their situation in the future. Those people will eventually stop using the service. It doesn’t matter who you are or what you do, you must take time to review your financial situation on a consistent basis. Once a week set time aside for questions, answers and understanding. NO ONE can build or grow without those.
