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In over 30 years of exit surveys conducted by our Chief Education Office and Former IRS Trainer, Sandy Botkin, the #1 reason that self-employed people overpay their taxes can be summarized in this statement, “My accountant takes care of my taxes.” Those 7 words cause more people to miss out on deductions more than any other phrase in the English language.
Let me explain. There is a very big difference between filing your taxes and lowering your taxes. Just because your accountant files your taxes doesn’t mean that he/she is ferociously looking for ways for you to save money.
Let me be clear. We strongly suggest that you use a competent tax professional. But your accountant is only as good as the information you pro-actively provide to him/her. They cannot wave a magic wand and lower your taxes.
More often than not self employed people deliver a shoebox full of receipts, a stack of bank statements, or if you are really good a lack-luster spreadsheet with their expenses in it. Then the tax preparer spends an hour or two just organizing and trying to make heads or tails of what information they have been given.
If you pay your tax professional on an hourly basis then you are over-paying your tax guy to do simple data entry. If your tax professional gives you a flat fee rate then they have spent so much time organizing your stuff that they don’t have time to sit down and look at strategy and suggest things you could be doing different or deductions you may have missed.
Either way you are probably not getting the most out of your tax return.
There are 2 things you need to do to get the most out of your tax return experience and lower your taxes…
- Deliver well organized information to your accountant so that they can analyze the data quickly and then spend their time looking at ways to lower your taxes.
- Educate yourself. Tax reduction is a team sport. In many ways you should be driving the discussion with your tax professional and they will help guide you to strategies. After all you are the one that knows what is going on in your business.
At Taxbot we want to try to help solve both of these problems. Through our blogs, videos, and articles we will provide you with tips and strategies that you can then take to your CPA and talk about them for your situation. This can be some of the most profitable time you spend in your business. Remember its not how much money you make that counts… its how much of that money you can keep!
Did you know that the #1 audited expense, and in our opinion the most underutilized deduction, is the vehicle deduction. But most people don’t understand it and therefore miss out on some big money when talking to their accountant. Check out our Free Report “How to Get The Equivalent of Free Gas For Your Vehicle.”
If you are not a Taxbot subscriber, you should check out our simplified accounting application for self-employed. Taxbot makes IRS compliant mileage and expense tracking so easy that you’ll feel like you are cheating! At the end of the year you can generate our AuditSafe™ Report and deliver the most comprehensive and organized tax information your accountant has ever seen.
If you want to check out Taxbot you can click below and try it free for 2 weeks.